It doesn’t matter what your financial situation is, money needs could knock on your door at any time. One of the best options to meet your needs here is lending from a bank, of which, a loan against property is one of the most chosen.
If you are in need of money, and are planning to avail a loan against property, the first and most important milestone is getting the loan request approved by the lender. Below are a few tips that can help you improve your loan eligibility.
- Credit score
A good credit score is important when you are applying for a loan against property. Your credit score reflects your lending habits. A good credit score means that you have been regularly paying back your debts. This can increase the lender’s confidence that you can pay back the loan and hence, it will enhance your loan against property eligibility.
- Proper documentation
For you to be eligible for a home loan, you should be able to present certain documents that prove your identity and eligibility. Loan against property documents may include your Aadhar and PAN card. For employment verification, lenders might also ask for a copy of your salary slip and bank statements.
The tenure you request can also affect your eligibility. Requesting for a longer tenure may seem as risky for some lenders, especially if you are nearing retirement. A very short tenure could also hurt your eligibility as the EMIs will be higher and your ability to repay them might be questioned.
- Your age
As mentioned above, your age also plays a role in your eligibility. If you are young and have plenty of years of employment left, lenders may see less risk in giving you a loan. At the same time, if you are nearing your retirement age, lenders may see a higher risk in your loan application and could offer you a shorter tenure to pay back the loan.
- Your income
You should have an income with which you can comfortably repay the EMIs of your loan. In addition, lenders will also consider the other EMIs you are paying back currently. There are chances for your loan rejection, if they feel like your income, with the current EMIs you pay, is not enough to comfortably pay back the loan every month.
- Previous loan applications
A previous loan application that was rejected may also negatively affect your chances for approval. Lenders may see that you have a habit of getting into more debts and that increases the risk. Not only that, but a rejected loan application can hamper your credit score as well.
Keeping your documents ready will make the whole process easier for you. Understanding the math of it all will also help you and hence, you should use a loan against property EMI calculator to compute your loan EMIs. Follow the above pointers to make sure you have a higher chance of loan approval.