Have you ever felt the need for a large corpus but realised your cash was locked in immovable assets? Read on to learn how to easily solve this problem with a Loan Against Property or LAP.
A Loan Against Property allows individuals to unlock their property value and access large sums, as high as Rs 8 crore, for varied financial needs. A loan can be granted against residential property, rented residential property, commercial property, or a piece of land.
Lending institutions have well-defined eligibility criteria that borrowers should meet to qualify for a Loan Against Property. Therefore, boosting your Loan Against Property eligibility is crucial. Reverse mortgage loans in India with simple eligibility criteria are also getting popular among retirees looking for regular income.
Tips to Boost Your Eligibility for a Loan Against Property
Here are effective steps to enhance your chances of getting approved for a Loan Against Property:
- Improve Your Credit Score
The borrower’s credit score is one of the most crucial factors for a Loan Against Property. Lenders determine if you can make timely loan EMIs based on your credit score. You should limit your credit utilisation ratio to 30% to improve your credit score. Another way to improve your credit score is to apply for new credit cards with higher limits or increase the credit limits on your existing card. A longer history also helps to improve the credit score. Ensure you make every EMI on time to maintain a high score.
- Have a Stable Income and Employment History
Lenders can approve a Loan Against A Property application if you show a stable income source. Additionally, disclosing the secondary sources of income, like rent, can also help to boost your financial profile and, thus, strengthen your credit score.
- Consider a Co-applicant
Making the loan application with a co-applicant can improve your eligibility for a Loan Against Property, provided the co-applicant has a high credit score and sound income profile.
- Preparation for Documents
You should pay attention to the documents related to the property that needs to be mortgaged. Ensure all the property documents, like title deeds, building plans, registration, etc., are in order before applying for a Loan Against Property or a reverse mortgage loan in India.
- Approach a Familiar Lender
Considering a lender you already have a relationship with can boost your chances of getting approved for the loan. Ensure you pay previous loans or credit card bills timely to maintain a good relationship with the lender.
- Clear Existing Debt
Lowering the current EMIs (equated monthly instalments) can help you to qualify for a Loan Against Property. As lending institutions assess borrowers’ disposable income to determine the Loan Against Property eligibility, it is best to have income not tied to other obligations.
- Choose a Suitable Loan Tenure
A long tenure increases your chances of getting approved for a Loan Against Property as longer terms ease the stress of loan repayment. The increased probability of loan repayment makes lenders approve a loan application.
This way, property owners can easily access the funds they need. A Loan Against Property is beneficial to meet financial requirements, especially if the funds required are substantial. Boost your loan eligibility to get approved for a Loan Against Property and access significant loan amounts with reputed lending institutions.
