A loan against property is available when you mortgage your property. Though the loan is easily available, in some instances the loan application is rejected. If you are thinking of applying for a loan against property and want to escape a possible rejection of your application, you can take the following steps to avoid rejections –
- Check the eligibility criteria thoroughly
The first thing which you should ensure before applying for a loan against property is to check that you meet with the prescribed eligibility criteria. So, before applying for the loan, check all the eligibility requirements and make sure that your loan application is not rejected simply because of a lack of eligibility qualifications. Some of the common criteria include the following :
- Your age should be 18-70 years
- Your monthly salary should be a minimum of INR 40, 000. In case you have a business, the minimum annual income should be INR 3 lakhs
- You should be employed for a continuous period of 3 years. In case of a business, the business vintage should be at least 5 years
- Make sure you have all the required documents
A list of documents is also required when applying for the loan. These documents include the borrower’s documents as well as the property’s documents. You should have all the required documents because the absence of any document would result in loan against property rejection.
- The property should be free from any legal issues
The loan is granted against the value of the property which is being mortgaged. As such, the lender investigates the property to find out whether it is entangled in any legal disputes or not. If there are ownership disputes or any other legal dispute with regards to the property which is being mortgaged, the loan application would be rejected.
- Reduce existing debts
If you already have a lot of loans to your name, your net disposable income reduces. As such, the lender feels that the EMI of the loan that you are seeking would not be possible for you to repay. In such cases, the loan is rejected. So, reduce your existing debts before applying for a loan against property.
- Make sure your credit score is good
The minimum credit score required for a loan against property is 650. This score represents your credit history and tells the lender how likely you are to default on the repayment of the loan. If you have defaulted on past loans, your credit score would be low. In case the score is low, the loan application would be rejected. So, find out your credit score before applying for the loan and ensure that it is good. If the score is low delay the loan. Build up your score first and then apply to avoid loan against property rejection.
- Avoid changing occupations
Whether you are salaried or self-employed, stability in occupation is a major requirement when availing loan against property. If you change jobs or businesses frequently, this stability is disrupted and the loan is rejected.
So, these are the common reasons for a loan against property rejection and also ways to avoid such rejections. Follow these ways and ensure the sanction of your loan.