Loan against property has emerged as a popular credit option which substantially helps borrowers meet their financial crises and credit shortages by offering their assets as collateral. Apart from being a secured credit, this loan features no end-usage restrictions, high loan amount, reasonable interest rate, etc. However, before availing this credit facility, applicants should choose their tenure diligently. Keep reading to know how you can select the ideal tenure while availing your LAP.
Factors to Consider While Choosing Tenure for Loan Against Property
While availing a property loan you need to remember several factors so that it becomes easier to choose an ideal tenure for the loan. Mentioned below are some of those key factors to keep in mind.
- Age of Applicant
Loan against property provides a tenure of up to 20 years. In general, longer tenure for a property loan is offered to young borrowers of age between 25 years and 35 years since there is sufficient time left before their retirement. However, this tenure of the loan will be shortened if the applicant is going to retire soon.
- Income
Another factor you should be cautious about is your income since it helps to determine the expected amount of repayment which will be paid in EMIs. In other words, this amount helps in determining how fast you can clear the EMI payments each month. If you find any difficulty to figure out the exact EMI amount, make sure that you use the online EMI calculator available on the websites of lending institutions to get prompt and accurate results.
- Loan Amount
Another factor you should remember while choosing the right tenure for your loan against property is the loan amount. Higher the amount of credit, higher will be the amount of EMIs per month. Furthermore, having a large loan amount can extend the repayment period alongside the loan tenure. Although a longer tenure generally reduces the amount of EMI, it tends to increase the rate of interest, thereby making your loan slightly expensive.
- EMIs and Interest Rate
If you are planning to lessenyour EMI amount, you have to extend the tenure of the loan. In the same way, if you wish to decrease the loan against property interest rate, you have to select the shorter tenure for LAP. This should be planned beforehand so that it becomes easier to manage the EMIs in the future.
Now that you know about the factors to consider while choosing the right tenure for LAP, check out the eligibility criteria to apply for this loan.
Eligibility Criteria to Avail Loan against Property
The eligibility parameters of mortgage loans differ from one financial institution to another as stated below:
For salaried persons
- Applicant must have Indian citizenship
- Age of the applicant should be between 28 years and 58 years
- The borrower should have a working experience of at least 5 years in any public, private, organisation or MNCs
For self-employed persons
- Applicant must be an Indian citizen
- Age of the borrower should be between 25 years and 70 years
- The borrower must have a stable flow of income alongside business experience of at least 5 years.
Once you meet the eligibility criteria, complete the documentation required while availing loan against property in order to continue with the application procedure.
Documents Required for Loan Against Property
Following are the important documents which a salaried person needs to furnish at the time of availing a loan against property:
- ID Proof (PAN card, Aadhaar card, voter ID card, driving licence, passport)
- Address Proof (Aadhaar card, voter ID card, electricity bill, utility bill, rental agreement)
- Form 16
- Current salary slips of up to 3 months
- Bank account statements for last 3 months
- Income Tax Returns of last 6 months
- Papers of the property to be mortgaged
On the other hand, if you are a self-employed person, you have to submit these documents as stated below:
- ID proof (PAN card, Aadhaar card, passport)
- Address proof (Aadhaar card, electricity bill, ration card)
- Bank account statements for last 6 months
- Papers of property you want to mortgage
- Current Income Tax Returns
After you fulfil the eligibility criteria and collect the necessary documents, you can easily proceed with the process of application.
How to Apply for Loan Against Property?
You can apply for a loan against property by following this easy step-by-step process as discussed below:
Step 1: Visit the official website of your preferred financial institution
Step 2: Navigate to the ‘Loans’ section, locate ‘Loan against Property’, and click on ‘Apply Now’ option.
Step 3: Fill out the application form online with your personal details, income details, and property information
Step 4: Compare the loan offers and choose the best one for you
Step 5: Input the amount of loan you want to borrow and the tenure
Step 6: Upload the necessary documents for verification
Step 7: Crosscheck the application form and click on ‘Submit’
With the completion of all these steps, your loan against property application process will be submitted successfully, and the amount will be reimbursed after approval.
Knowing the ways to choose the ideal tenure for a loan against property may help you avail this credit facility with greater convenience. However, before applying, remember that the terms and conditions of LAP differ from lender to lender. Hence, conduct thorough research beforehand and make prudent decisions.
