Top Factors Which Affect Loan Against Land Property Eligibility
When you think about applying for a loan, the first thing that comes to your mind is the eligibility criteria.
A loan against property, also known as a loan against land property, is one of those with relatively relaxed eligibility criteria.
Hence, any Indian citizen between the age of 21 and 60 can apply for a loan against land property at attractive interest rates.
Moreover, you need to possess the ownership rights of a residential or commercial property. The property might be self-occupied, rented, or vacant.
However, since a loan against land is a long-term liability, lenders often evaluate the borrower’s financial profile and status carefully before approving the loan.
Read on to know about the top-5 factors that affect loan against property eligibility and approval.
1. Credit Score
The borrower’s credit score is the first parameter that lenders evaluate before going any further. The credit score is considered an accurate indicator of your financial health.
If you consistently pay your EMIs on time and keep a low debt to income profile, your credit score will most likely be high. And when your score is high, the lender will be happy to provide you with the best loan against property interest rate.
2. Age
Your age also has a significant impact on the loan against land property eligibility.
For instance, when you are near the lowest age of entry, which is 21, you can get many years to repay the loan. Hence, lenders perceive the loan as less risky.
In contrast, when you approach the maximum age of entry, your eligibility keeps decreasing. In such cases, your lender may increase the interest rate or offer you a shorter term to minimise the risks.
3. Income Stability
While calculating the loan against land property eligibility, lenders check the stability of the borrower’s income.
Hence, you might need to prove to the lender that your job or business is stable and your income is sufficient to tackle the loan repayment.
You may need to submit your income proof, including salary slips, appointment letter, or business profile and Profit and Loss Statement.
4. Property Status
Your property location and status impact the loan against land property eligibility and interest rate. If your property is freehold and in a prime location, its resale value will be high, and hence your lender might be willing to offer you a faster approval.
Moreover, if your property is insured, the lender’s risk is minimal. Therefore, they will never mind offering you the best rates.
5. Income Tax Returns
Your lender may scrutinise your Income Tax Returns carefully to analyse your eligibility and repayment capability. Nothing can be better than providing a returns file of at least 4 years.
Lenders generally seek Income Tax Returns for 2 years from salaried professionals and 3 years from self-employed professionals.
Hence, try to give at least three years ITR file for ensuring speedy approval of a loan against land property.
Conclusion
Now that you know the factors that affect loan against land property eligibility and interest rate, it is time you should take steps to increase the eligibility.
Choosing the right lender also impacts eligibility. PNB Housing offers relaxed eligibility criteria for loan against land property applicants and provides industry-best interest rates.
