A loan against property allows individuals to use their property effectively and fund several financial requirements. The growing popularity of the credit option can be attributed to the availability of high-value loan amounts at competitive interest rates. Moreover, it comes with flexible end-use.
However, to receive quick approval and avoid rejection of loan applications, individuals must abide by the loan against property eligibility criteria set by lenders. The eligibility criteria determine a borrower’s repayment capacity. Hence, it is imperative for borrowers to be aware of all the means to enhance it.
Top 5 things to consider improving loan against property eligibility criteria
Loan applicants must be aware of the following pointers to help them qualify for a loan against property:
- Maintain a healthy credit score
The most effective way to improve loan against property eligibility criteria is to maintain a decent credit score of 750 and above. A credit score reflects a borrower’s creditworthiness and financial behaviour. Hence keeping a healthy CIBIL score will project a borrower to have high repayment capacity and enable quick loan approval. It will also help borrowers fetch a lower property loan interest rate.
On the other hand, individuals with substandard CIBIL scores are considered high credit-risk applicants, which will either lead to rejection of loan applications or else they will be charged higher interest rates.
- Know borrower’s profile
Another significant parameter that affects loans against property eligibility criteria is the profile of the applicant. The borrower’s age, income, and occupational stability influence the borrower’s repayment capacity.
Individuals with stable income status will have higher repayment capability. Hence lenders are likely to approve the loan application. Individuals will get easy approval for a considerable loan amount if they have a high income. This is the reason why salaried applicants are more likely to receive loan approval at competitive interest rates than self-employed individuals. Their regular income will enable them to pay the stipulated EMIs easily.
- Choose the right loan tenor
Opting for a longer repayment term will help individuals receive quick loan approvals. An extended loan tenor reduces the EMI burden, facilitating on-time EMI pay-outs. Individuals opting for long loan tenor have lower chances to default on EMI payments; hence lenders will readily approve the loan amount.
To choose an optimum loan tenor, one must use a loan against property EMI calculator. Prior computation of the EMI amount will help one choose a suitable loan tenor.
- Add co-applicant
Another means to boost property loan eligibility is to add a co-applicant. Adding a co-applicant with stable income status and decent credit score will increase the EMI affordability. Hence, one can easily borrow a lump sum loan amount. Moreover, as the repayment burden falls on both applicants, lenders will have less risk.
- Mention additional source of income
Applicants can enhance their loan against property eligibility criteria by mentioning additional income sources like rental earnings, freelancing jobs etc. An extra source of earnings indicates a borrower’s strong repayment capacity, assuring lenders of timely repayments.
Furthermore, individuals should also be aware of their existing debt obligation before applying for a loan against property. High debt liabilities will lower one’s eligibility to avail of loan amounts. It also affects one credit score. Hence, one must pay off their existing debt obligations to receive quick approval and qualify for considerable loan amounts. One must also be aware of the proper documentation. Any discrepancy in the documents will lead to the rejection of loan application.
Individuals can make the most of the credit option by meeting the eligibility criteria and submitting necessary documents. They can also reap the advantages of the pre-approved offers extended by leading financial institutions in various financial products like loans against property, home loans, etc. The offers help expedite the loan application process and reduce the hassles of tedious documentation. Intending individuals can check their pre-approved offers by submitting their names and contact details.
 To sum up, a loan against property is a multipurpose credit option that helps individuals sail through any financial exigencies without straining their finances. However, the entire borrowing might prove counterproductive if applicants are not meeting loan against property eligibility criteria and are unaware of the ins and outs of the credit option.
