As a secured financing option, a loan against property or mortgage loan helps individuals fund various personal and business expenses. Various advantageous features of loans against property have made it a popular funding option among borrowers.
That being said, individuals must be aware of certain important factors in case they fail to meet the eligibility requirements and try to enhance them to avail the mortgage loan without any hassle.
Below are listed 5 important factors that help individuals manage the eligibility criteria for loan against property.
- Check essential documents
The chances of fulfilling the loan against property eligibility increase when individuals own both the legal property documents and all the required personal documents and have also insured their assets. The property document list includes title deeds, approval from relevant authorities, plan copy of the property, OC/CC details.
All the property details must be up-to-date and in perfect order. Also, the property needs to be clear in the name of the owner. Further, individuals must submit KYC details, along with a bank statement, salary slip or income proof.
If individuals ensure that the required documents are legal and free of error, they can easily fulfil the loan against property eligibility and application.
- Maintain income stability
While checking the eligibility parameters of loan against property, individuals must have noticed the work experience or steady source of income criteria. Lenders set this particular criteria to assess the repayment capacity of an individual.
If a salaried person has changed several jobs or a self-employed individual has faced losses within a short span, he/she becomes a high-risk borrower to lenders. Therefore, if individuals can maintain income stability, they can easily manage loan against property eligibility requirements.
- Clear outstanding debts
One of the effective ways to manage eligibility requirements for a loan on land property is to clear multiple loan obligations. However, having multiple debts may create a negative impact as financial institutions might become sceptical regarding the borrower’s repayment capacity.
Therefore, to increase the chances of loan approval and fulfil the eligibility parameters efficiently, individuals must clear their liabilities before applying for the same.
- Resolve land disputes
Managing a loan against property eligibility becomes much easier when individuals apply for the loan with a property that has no legal disputes. While approving the loan against property, financial institutions thoroughly check the property eligibility and personal eligibility to avoid any future discrepancies.
Therefore, if individuals are willing to avail loan against industrial property or residential property and pass the initial eligibility criteria efficiently, they must resolve land disputes, if any.
- Improve credit score
Credit score helps lenders determine the creditworthiness of an individual. A credit score is based on one’s credit history, which depends upon several factors such as repayment history, total debt, and total open accounts.
Individuals can enhance the chances of loan against property approval by improving their credit score. There are several ways to improve one’s credit score. These include maintaining older credit cards to lengthen credit history, opting for mixed credits, checking CIBIL report mistakes and rectifying them, lowering credit utilisation ratio and many other factors. If individuals have a credit score of 750 or above, they can fulfil the loan against property eligibility without any hassle.
Reputed housing finance companies offer loan against property at improved terms and competitive rates to individuals with higher credit scores.
These HFCs also extend pre-approved offers to simplify the loan application process. These offers are available on other financial products such as home loans. Individuals can check their pre-approved offers by entering their name and contact details.
Therefore, if individuals maintain a decent credit history and a high credit score, they can meet the eligibility requirements for a loan against property without hassle.