Transcend Limits: Decoding Loan Against Property Eligibility Criteria

Loans against property or property loans are loans availed of against residential or commercial properties or land. These loans stand to be approved only when the borrower is the rightful owner of the pledged property and the loan application is signed by all the co-owners. Under property loans or loans against property, a loan applicant can borrow up to 75% of their property's current value as a loan. The borrower must repay the loan amount along with interest over a period of 15 to 20 years. The inability to repay loan EMIs for an extended period can lead to the lender seizing your property and selling it for loan recovery. 

If you are planning to apply for a property loan, you must familiarize yourself with the loan against property eligibility criteria. Read on to know more about it. 

Loan Against Property Eligibility Criteria for Salaried and Self-Employed Individuals

• Any salaried individual employed with a reputed private or public sector company can apply for a loan against property. 

• Self-employed individuals who pay income tax and whose income from business is high enough to support their loan against property EMIs are also eligible for a property loan. 

• While the age requirements vary from lender to lender, the minimum age requirement for these loans is generally 21 years and the maximum age requirement is 70 to 75 years. Please keep in mind that the maximum age is always the age of the borrower at the time of applying for the loan and not at the time the loan matured. 

• Most lenders also have the minimum income criteria for these loans. If your minimum income is below Rs.3 Lakh per annum, you will find it quite difficult to get approved for a loan. 

• If you are a salaried individual, lenders will generally ask you to show a work experience of at least 3 to 5 years. If you are a self-employed professional, lenders will ask you to show a business vintage of at least 5 years. 

• You must also have a CIBIL score of at least 750. Such a CIBIL score is reflective of a reliable and trustworthy loan borrower, one who is unlikely to default on loan repayment. If your CIBIL score is below 750, improve your credit rating first and then apply for a property loan to increase your chances of loan approval. 

These are the loan against property eligibility criteria that most lenders put forth. Please keep in mind that meeting these eligibility requirements may not be enough. Your lender may have additional requirements. So, before you apply for a property loan, visit your lender's office and have them explain to you their loan against property eligibility criteria in detail. Also keep in mind that your lender will decide the loan amount to be sanctioned as well as the loan against property interest rate to be extended to you based on factors, such as your total monthly income, your current debt-to-income ratio, age, etc. Individuals with a low debt-to-income ratio having a stable income and a good CIBIL score are always the people who get the best loan offers from their lenders. So, work not just on your loan against property eligibility but also on your overall credit profile if you wish to avail yourself of the best loan against property offer.