Top Factors That Affect Loan Against Property Eligibility - Loan Trivia


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Wednesday 10 August 2022

Top Factors That Affect Loan Against Property Eligibility

loan against property eligibility

As the name suggests, a loan against property is a secured financing option extended by a leading financial institution where the borrower has to mortgage a high-value asset to avail of funds. However, owning a property is not the only parameter, as there are certainly other factors that can significantly impact a
loan against property eligibility.

Read on to learn about the factors affecting Loan Against Property eligibility.

Factors impacting loan against property eligibility

  • Loan amount

A borrower’s borrowed amount significantly impacts the loan's term. Ideally, if the loan term is longer, the loan amount is greater. Choosing an extended term makes it convenient to repay loans because EMIs are affordable as it is spread out over a longer period, thereby easing the repayment.

  • Applicant’s income

Another significant factor that impacts eligibility for a loan against property is the income source. Lenders consider the applicant’s overall income before offering LAP. Therefore, before knowing how to apply for loan against property, borrowers need to show higher income to the lender to improve their chances of loan approval.

Moreover, with a stable flow of income, borrowers can negotiate with lender for an affordable loan against a property interest rate.

  • Documentation of the mortgaged property

When offering a loan against property, a lender checks necessary documents related to the leveraged property. Any discrepancy relating to the documents or legal hassles can significantly reduce or negate the chances of getting the preferred loan amount.

Therefore, a loan against property is the most effective financing option to meet necessary financial requirements without exhausting savings. However, borrowers must ensure meeting eligibility criteria and learn about the factors impacting a loan against property eligibility to ensure a hassle-free application process.

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