In case of an emergency, which brings about a sudden requirement of funds, there is always an option to apply for loan against property. This loan is received by placing the property as collateral with a lender. Since this is a secured loan, the loan amount is much higher as compared to an unsecured loan. Also, there are many financial institutions that offer competitive interest rates for these loans.
Now, before applying for this loan, there are certain documents that need to be submitted to the lender.
A list of the various documents needed for a loan against property:
- Documents for property
- Copy of the latest electricity bills paid
- Copy of the registered sales deed/lease deed or the conveyance papers
- Latest maintenance bills
- Previous sales deed chain since the first buyer
- Share certificate
Do keep in mind that the above documents are required for business owners, salaried, and self-employed professionals.
- Documents for income
These documents would differ for those who are business owners/self-employed, and those who are salaried professionals.
- Business owners/self-employed professionals
- Audited balance sheet by a certified chartered accountant
- Copy of ITR which has been filed for both business and self for the past 3 years
- Copy of bank statement of both business and self for the past 12 months
- Profit and loss statement of the past 3 years
- Copy of tax registration
- Copy of company registration license
- Salaried professionals
- Copy of salary slips of the past 3 months
- Copy of bank statement of the past 6 months
- Copy of ITR (form 16) for the past 3 years
- Additional documents
- Duly filled KYC form
- Loan application form signed by the borrower and co-borrower (if applicable)
- Passport-sized photographs of the applicant(s)
- Identity proof such as passport, PAN card, driving license, voter ID, Aadhaar card, or ration card
- Proof of any existing loan such as the EMI payment receipts or sanction letter
Apart from the loan against property documents, it is also important to be aware of the eligibility criteria for getting this loan.
- Eligibility criteria for salaried professionals
- Must be an Indian resident
- Should be between the age bracket of 18 to 60 years
- Should be earning a minimum monthly income of Rs 40,000 or more
- In case of employment with a partnership firm or private limited company, must have a graduate degree
- Eligibility criteria for self-employed professionals
- Business should be operational for the past 3 years
- Business must show consistent profit returns for the past 2 years
- Must be at least 21 years of age while applying for the loan and maximum age of 65 years when the loan matures
- Must earn a minimum annual income of Rs 1.80 lakh or more
Now that you are aware of the documentation and eligibility criteria, make use of a loan against property EMI calculator to get an idea of the monthly instalments of the loan. Doing so will help in understanding which loan plan is most suitable for the budget.