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Friday, April 19, 2024

How to get a loan against property without ITR?

Most financial institutions require the Income Tax Return (ITR) document to disburse a loan against property. However, individuals can also avail of a loan without income proof in some instances. For this, prospective borrowers have to follow a few essential tips to avail a loan by mortgaging a property registered against their name. 

Tips to avail a loan against property without income proof 

A few necessary tips to avail a loan against property without income proof are – 

Tip 1: Apply with a co-applicant  

Most lenders advise applying with a co-applicant if the borrower cannot provide income proof. Applying with a co-applicant offers multiple benefits for a borrower, such as faster loan approval, higher loan amount and others. However, one must ensure that the co-borrower possesses a good CIBIL score and stable income to avail a loan successfully. 

Tip 2: Make higher downpayment 

An LTV ratio is the amount a lender provides against the mortgaged property’s value. However, leading financial institutions in India provides an LTV ratio of around 70%, which means that a borrower can avail 70% of the property’s current market value. But, the rest of the amount a borrower has to pay as a downpayment. As lending a higher amount increases a lender’s risk, a borrower can choose to make a higher downpayment to abate the chances of loan application rejection. 

Tip 3: Keep a healthy bank activity 

Before disbursing a loan against property, lenders often check the activity of the savings account of a prospective borrower. So, it is essential to keep a healthy track record of savings account to increase the chances of approval. Also, make sure to keep a minimum balance or sufficient funds to increase an individual’s trustworthiness. 

Tip 4: Explain the reason behind the unavailability of income proof 

As income proof is one of the primary pointers for a loan against property eligibility criteria, its unavailability might hamper the application significantly. Hence, it is essential to talk with the concerned person about the reason for its absence. This might let the lender reconsider an applicant, which can increase the chances of loan request approval. 

Tip 5: Speak with the relationship manager 

As the absence of income proof is a negative point while applying for a loan against property, it is crucial to speak with the relationship manager before knowing how to apply for a loan against property. Every financial institution has a particular relationship manager, and individuals can ask them for a possible solution for this. 

As mentioned above, having income proof is one of the minimum requirements for availing a LAP.  Besides, there are other pointers one must take note of.  These prerequisites are not the same for every type of loan against property and vary with lenders.  

Loan against property eligibility criteria

The eligibility criteria for a loan against property are – 

  • Applicants must be between 25 to 70 years. 
  • Salaried applicants must work in a multinational, private or government organisation.  
  • Self-employed applicants must have a steady source of income from their business. 
  • The property must be located under the operation of a lending institution.  

Documents required for a loan against property 

The documents required to avail of a LAP are – 

  • KYC documents
  • Voter ID
  • PAN card
  • Aadhaar card 
  • Driving license 
  • Passport 
  • Income proofs 
  • IT returns
  • Bank statements 
  • Property documents 
  • Title documents 

For the ease of financial calculations, lenders often advise using a loan against property EMI calculator to compute monthly payables beforehand. Besides, this calculator also gives the amortisation schedule that contains details of financial breakup, giving an idea about the progress of the payment throughout the tenor. 

In India, selected financial institutions extend pre-approved offers that simplify and expedite loan processing. Such offers are available on various financial products like loans against property, home loans, etc. You can enter your name and contact number to check your pre-approved loan offer. 

Hence, if an individual lacks income proof, he/she can follow the tips provided above for a hassle-free loan against property. This also decreases the chances of application rejection and assists in faster loan disbursal.   

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