Tips for Availing a Loan Against Property

Tips for Availing a Loan Against Property Without Income Proof

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A loan against property is a secured form of loan in which you can get in return for pledging your property as security to the loan provider. This is a great tool to meet unprecedented and immediate emergencies. While applying for a loan against property, you must consider some factors like the loan against property rates before making an application. Similarly, while verifying your application, the loan providers ask for income proof to ascertain your loan repayment capacity. The lender needs to make sure that you have a stable income source, making it an important parameter for any kind of loan. Thereby, people can also check the loan against property eligibility which will be very viable.

If you fail to provide income proof, you might not get the loan amount you were hoping for and might even have to fulfil some additional criteria to compensate for the lack of such an important parameter in your portfolio. 

How to get a loan against property without income proof

Below provided is a list of tips that you can turn to if you don’t have an income proof but yet need a loan against property. 

Apply for the loan with a Co-applicant

If you have a family member or a trusted friend with a salaried job, add them as co-applicants to your application for the loan against property. Their income proof will be used as the credibility and repayment capacity that the loan provider will be looking for. If the co-applicant has a healthy repayment history, it will be even better because you will be eligible for a higher loan amount.

Explain your income to the representative

An onsite inspection is likely to be carried out where a bank officer will be sent to your property to ascertain the market value of your property. Seize this opportunity to explain to your officer about the income that you have. You might be a business person or thinking of pledging a property for commerce. Let your officer know every detail so that it can be taken into consideration while sanctioning your loan. 

Opt for a lower loan to value 

The loan to value or LTV is the certain percentage of the value of the property, the bank offers. For instance, if the loan to value is 85% then the rest 15% will be paid for you. If the loan provider has to pay a large sum for the LTV then they might insist on the income proof. Therefore opt for a lower loan to value. If you simply lack income proof but have a stable income the funding the rest of the LTV should not be much of a hassle. 

Monitor your banking habits

Remember that the loan provider is sure to have a look at your baking habits before approving the loan. So make sure you have enough funds in your savings account before you apply for the loan against property. If you can calculate the EMIs beforehand using an EMI calculator, make sure the funds in your savings account exceeds the EMI mounts by a significant margin. 

Justify why you don’t have an income proof

There must be a genuine reason behind why you don’t have income proof. Maybe you failed to file for an Income Tax Return (ITR) due to unprecedented circumstances. Whatever it is, explain it to the loan provider. They can have a look at your previous income tax return and assess a repayment capacity accordingly. 

Consider crowdfunding

Although this medium of acquiring loans is getting quite popular these days, it has some cons such as a high rate of interest. In a crowdfunding platform or a peer-to-peer (P2P) platform, the funds are raised through crowdfunding and are granted to the eligible candidates. Use this platform only as a last resort. 

Try and talk with your relationship manager

A relationship manager is a linkage between you and the bank. They cater to any number of queries and concerns you might have. Every savings account holder is assigned a relationship manager. Take up your issue with this person and explain to them that you need a loan against property but lack income proof. See if they can help you process and sanction the loan without income proof.  

Any loan provider wants to assess the repayment capacity of the person taking the loan. To do that, having a look at the income proof is quite important. Consider these tips and hopefully, you will get your loan. Remember to go for the lower loan against property rates to lessen your burden to some extent.

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