How Much Loan Can I Get Against Property?

How Much Loan Can I Get Against Property?

According to a market research platform, India’s loan against property market is forecasted to grow at a CAGR of more than 14% in value terms to touch a valuation of USD857.87 billion by FY2026. The demand for this loan type is pretty evident from this statistic. And, given the way this credit instrument helps a borrower, the figures are quite obvious.

However, how much loan can one acquire against a property remains a common query among potential applicants. Individuals with this query who want to apply for loan against property must first understand the concept of LTV. 

Concept of LTV and its effect on loan amount

Loan to value ratio refers to the loan amount that an individual can borrow in comparison to the current market value of the concerned mortgage. Every lending institution has a different LTV for sanctioning a LAP. Therefore, this varies across lenders, and one can calculate it from the below-mentioned formula:

  • LTV ratio = Amount of loan/Appraised value of property

There are certain factors that affect this ratio. These include:

  • Age of property
  • Location of property
  • Size off a property

Individuals must note that, besides LTV, one’s eligibility criteria also play a major role in determining the loan amount.

Eligibility criteria for a loan against property

The minimum eligibility criteria for this loan type are given as follows:

  1. Borrowers must be residing Indian citizens
  2. Age should be between 25 years to 70 years
  3. One should be able to prove a stable income source. Salaried individuals must be working professionals at MNCs, private or public companies having at least three years of work experience.

Potential loan applicants can use a loan against property eligibility calculator offered by a reputed financial institution to check the maximum property loan amount that can be acquired. 

While the eligibility criteria definitely ease the loan application process, one must also be mindful of the various documents required for a LAP. Individuals must ensure to sort and keep all the required documents handy before applying. This would streamline the loan processing. This list includes –

  • Proof of income
  • Property documents
  • Proof of identity and address
  • Proof of employment

Potential LAP applicants must note that they should always choose the lender wisely. They must go through multiple lending financial institutions and draw a comparison of the property loan interest rates offered by them. They must then choose the one best for them.

Selecting a reputed lending institution for a loan against property will prove beneficial for them in many ways. For instance, they can enjoy a loan procedure consisting of minimal paperwork. Furthermore, they can reap the benefits of several offers.

These include the pre-approved offers extended by the financial institutions that ensure a quick and hassle-free lending process. These offers are provided on multiple financial products like home loans and more. Individuals willing to apply for a loan against a property can check their pre-approved offer by providing a few details, such as their name and contact number.

With the documents and eligibility section sorted, the next vital thing that potential loan applicants must note is the process to apply for this financing instrument.

Process to apply for LAP

Illustrated below are the various steps to apply for a loan against property online:

Step 1: Navigate to the online application form and enter all necessary personal details like name, contact details, address, and date of birth.

Step 2: Input all income details to choose the best deals according to your financial standing.

Step 3: Proceed towards submitting the application form.

After the LAP application is completed, a representative from the concerned lending institution will contact the individual to process the loan application further. Applicants must provide the required documents and coordinate well for property and identity verification so that the loan gets processed in a hassle-free manner.

Availing a loan against property comes with a set of borrower-friendly benefits, and some of these features include:

  1. Individuals get access to a substantial loan amount
  2. A LAP comes with a flexible tenor, and borrowers can select one as per their convenience
  3. The interest rate applicable on this financial product is comparatively lower
  4. A loan against property offers zero end-usage restriction

Potential loan against property borrowers must therefore ensure that they fulfil all the eligibility requirements so that the loan gets approved without any hiccups and they can acquire the maximum amount.

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