Loan against property without income proof is considered as an unsecured loans. As per the reserve bank of India guidelines there is restriction on un-secured loans to be provided to the applicant. While the applicant can secure up-to 60%-70% of the loan against the property valuation as loan against property.
Following are the points for loan against property:
Almost many people have faced financial crisis sometimes or the other in their lives. Always there is a crisis of money that where do we generate income from ?
As there are continuous fluctuations in the markets due to recession, demonetization, the corona virus pandemic.etc. The corona virus pandemic has led to massive correction in property prices as the demand for real estate has slide down, thus impacting the real estate sector. Even during the demonetization the real estate sales had heavily impacted thus affecting the home loans market as well.
Hence when the sale of properties becomes difficult the loan against property becomes a viable option. While as due to pandemic when huge job losses happened the individuals staying in rental properties can opt for loan against property even when not having sufficient monthly income by mortgaging the property.
What does loan against property means?
Loan against property is not a complicated term. It is a self-explanatory term. It is the type of loan which is secured on the basis of ownership of alternate property. A property can be a residential building, commercial property, or a plot. If the applicant has registered the property in his/her name, the applicant can ask for a loan against the property. The lender can approve the property only when the property/land titles are clear. The lender will approve a certain percentage of the market value as a loan percentage.
Procedure to avail loan against property without income proof:
Most of the banks in India ask for income proofs without which the banks/finance companies do not approve loans to the customers. However if an individual is a freelancer or an unemployed person cannot submit proof what-so-ever, these tips may help you out. The applicant can check for home eligibility on the EMI calculator provided to check the credit eligibility.
Documents required for the loan eligibility:
- Application form
- Identity proof
- Address proof
- Passport size
- Last 6 months ban statement
- Processing fee cheque
- Property documents with clear titles
7 tips for loan against property without income proof:
Talk to the relationship manager:
If you have a savings bank account with any bank, a relationship manager gets assigned. The relationship manager is a first point of contact for any concerns you might have. If the relationship officer is not assigned walk to the nearest branch. Once the concerned person is met try assuring that payment should be done promptly.
Add a co-applicant:
If there is a family member from applicants house with proper income consider as co-applicant. Adding the co-applicant with stable income can be useful to obtain the loan.
Disclose proper income to the bank/financial institution:
Before approving or rejecting your loan, bank officer does the actual verification of the property. In case of the business or planning to pledge a commercial property proper disclosure of property to the financial institution. Also the correct income proof as well as income tax returns. The financial institution officer will inspect the property and then decide based on that how much credit limit can be extended to the applicant by the bank.
Check on savings account:
While approving the loan the lender will keep a check on the routine banking activity. If the individual is maintaining sufficient balance into the bank account the chances of getting loan approved is higher. Make sure that the average bank balance should be twice of the EMI.
Choose lower loan value:
Loan to value is the percentage of value the bank will lend. If the applicant is not having proof for ITR returns lower value loan be obtained.
The peer-to-peer lending is increasingly popular these days. In a P2P, funds are raised to crowd funding which will be disbursed to eligible borrowers with an interest rate. The applicant may have to pay higher interest rate on P2P lending. If the applicant does not have valid income proof, this option should be suitable.
Getting loan against property without any income proof or ITR statement is a difficult task. The financial industry is booming day-by-day and loans are available for all types of customers. The competitive rate of interest can be available on interest to get the best deal.
Thus, to summarize that the loan against property is a better option to opt for as it creates a confidence to a borrower as well as lender for repayment. Also during the pandemic time where the market conditions are slack and people are reeling under job losses and salary cuts opting for loan against property is a better option as the applicant can opt for loans even in lower income or nil salary.
Applicants should have clear titles & documents for applying for the loan against property wherein the applicant becomes eligible for loan against property even in case of lower income higher credits can be obtained.