Eligibility for Loan against Property in India

Eligibility for Loan against Property in India
Eligibility for Loan against Property in India
August 13, 2016

Most of the banks or lending institutions in India sanction loans upon the goodwill or reputation, assets or any other condition that suits their policy. If you have a property at your disposal, it is a great asset for you in dire need of cash for business or any other purpose. There are different types of loan structures you can think of to meet your need and the most remarkable of them is loan against property.

Loan against property is very flexible

Your property here, be it a residential or commercial, will serve as your collateral for qualifying for a loan. Loan against property gives the financial institution a kind of confidence that you will pay back which will make them not chase you around like a common criminal that they normally do.

Read also: Merits and Demerits of Purchase Money and Non-purchase Money Loans in Short Sales

There are features of interest in loan against property

When you take loan against your property, there are various features of interest that come with your loan and one of them is a low interest rate. You will also be getting a doorstep service and loan for the purchase of a commercial property.

Eligibility for loan against property is broad

Those who are eligible to take loan against property are broad and the first category is individuals on a salary structure or payroll. The individual should be working with the Government or a company with a high reputation. Also, the individual should be at least 24 years of age as at the time of the commencement of the loan.

Read also: A Cash Business Loan might Just be Perfect for a Working Capital

Professionals can apply for loan against property

Those regarded as professionals and are eligible to apply for loan against property include doctors, engineers, architects, dentists, chartered accountants, company secretaries and management consultants. The applicant needs to be at least 24 years of age as of the time the application is made and less than or up to sixty five years of age when the loan is matured.

Individuals who are self-employed can apply

Any individual who is self-employed but fills Income Tax returns regularly can apply. The age structure that the individual would be required to attain is the same with the aforementioned categories above.

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Using a loan against property gives you loyalty points

There is a point that can be earned when you use loan against property and this point ranges from 750 to 2500 depending on the size of your loan. These points open you up to be rewarded in the customer loyalty program of the financial institution.

Take a loan only when it is absolutely necessary

A loan can be used to finance any of our need, and the idea of loan against property is very tempting because of its simplicity. However, it is advised that loan should be taken only when it is very necessary. A loan acquired without a plan will soon become a steaming pot of disaster.

Make plans to pay back every loan

Before attempting to take any loan, always make a plan to pay back in the shortest possible time and be strict with this time. The best time to acquire loan is when you have to put it into another investment that would yield you more money. Loans acquired for fulfilling leisure purposes are usually the most difficult to pay back.

Read also: Looking for Ways to Finance Your Company: Try Asset Based Lending

Article highlights

  • Your property can serve as collateral for your intended loan.
  • Financial institutions are more comfortable with loan against property because they have something to hold on.
  • Loans against property have interesting interest rate.
  • Professionals cutting across many fields are eligible for loan against property.
  • The minimum age to apply for a loan against property is 24 years.
  • Applicant would need to be up to 65 years or less at the time of loan maturation.
  • Using loan against property can earn you reward points.
  • Loans should only be taken when it is almost impossible to avoid going for it.
  • Self-employed individuals that are filling Income Tax returns are also eligible for loan against property.
  • It is better to make a plan before applying for a loan against property.

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