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Things That Affect Your Eligibility for a Loan Against Property

Submitted by admin on October 19th, 2024

Introduction:
LAP is a secured loan that avails unlocking the value in a property to meet your financial requirement. LAP may be a very sizeable amount loan, but very flexible as regards its repayment. Again, one may ask whether for personal or business purposes, the eligibility criteria for this loan depend on various factors that the lenders are inclined to consider before approving a loan.

Understanding these factors can help you maximize your chances of getting a favorable loan:

1. Property Valuation

The market value of your property is essential. Lenders provide 60-70% of the current market value of your property as a loan.

2. Stable Income

Your income and job stability ensure you will repay the loan. Typically, the salaried employees with stable sources of income or business people with stable incomes will qualify.

3. Credit Score

A sound credit score above 750 increases your chances of approval. The high scores show you have a good habit of handling your finances.

4. Existing Liabilities

If you have other loans or liabilities, it can damage your eligibility. Lenders analyze your potential to handle additional debt without having a strain in your accounts.

5. Ownership of Property

You must fully own the property with all valid legal documents. Outstanding legal cases or disputes also minimize your possibilities.

6. Age of the Applicant

Younger applicants have a longer tenure with loans, but age may also determine the repayment period. The loan tenure and amount for older applicants may be lesser.

7. Loan Tenure

The longer the tenure, the lower the monthly EMIs, but the loan amount will also be lower. Lenders assess your repayment ability based on the tenure.

8. Occupation

Lenders will judge your profession. The chances are more likely for salaried employees compared to others who are self-employed, as the latter’s incomes are relatively unstable.

These determine your chances of availing a Loan Against Property.

Conclusion:
This loan against property is primarily suitable for raising substantial amounts of funds since the value of property is considered. However, credit scores, stable income, and above all, the ownership of the property generally determine one’s eligibility. So, to increase the chances of availing the loan on favorable terms, one must first work on improving his financial profile and getting all documents in their proper place.