For sanctioning a mortgage loan, your repayment capability is the first criterion that lending organisations check. This is why salaried individuals often enjoy hassle-free loan approval and disbursal owing to their repayment assurance.

However, self-employed people do not enjoy such easy disbursal benefits unless they ensure their repayment capabilities with the fin ancial institution. So, there are certain points a SENP (self-employed non-professionals) should keep in mind before availing a Loan Against Property for Unsalaried individuals from lenders. Since, the Interest Rates on Loan Against Property are lower as compared to other loan options, it is a better way for applying and getting an instant approval.

7 Things to Look for Before Availing Loan Against Property India:

> Your Business Vintage –

Self-employed prospects show at least 3 years of business vintage, as a proof of their professional credibility to the lending institution. Standard vintage proof includes IT tax returns for the previous year.

In addition to this, lenders also require past 6 months’ bank A/C statements, last 2 years’ balance sheet as well as audited profit and loss statements.

> Tracking your Repayments –

You may have other loans running simultaneously. Make sure their EMI repayments are up to date. Defaulting on existing EMI payments will degrade your credit score which, in turn, will make it difficult to avail a mortgage loan.

Additionally, timely instalment repayments also help in improving an individual’s FOIR (Fixed-Income-to-Obligation-Ratio) rating. It simplifies the process of availing financing.

Note: Availing a loan against property for unsalaried can help one consolidate all existing debts.

> Assurance of Annual Turnovers –

Compared to a loan against property for salaried, business owners must present a minimum yearly turnover for qualifying as a considerable prospect. Annual turnovers indirectly reflect one’s taxable income which assures a lender.

A steady taxable income for at least 2 years establishes trust in a business owner’s repayment capability. It, therefore, aids in a faster loan sanctioning and disbursal.

Additional Read: Tips to Boost Your Loan Against Property Eligibility

> Tenure of Repayment –

Most NBFCs provide a loan against property tenure of up to 18 months to business owners. This flexible repayment facility allows a borrower to repay the loan without any hassle.

> Flexi Hybrid Feature

Lenders offer Flexi Hybrid feature on their loan against property for unsalaried. Here, one can borrow any amount as and when required from a pre-decided limit and pay interest only on the amount utilised. Moreover, they can repay only the interest amount as EMI and the principal at the end of the loan tenure.

> Loan-to-Value Ratio

The loan to value ratio set by any organisation defines the percentage of your property’s current market value which will be forwarded as your loan amount. Most NBFCs set their loan-to-value ratio at 75-80% which may change accordingly.

In addition to the above information, one must consider the loan against property eligibility criteria which go as follows.

• The applicant must age between 25 and 70 years.
• He should be a resident of India and hold a domicile in the subcontinent.
• He must assure his regular source of income.

Moreover, the applicant should belong to any of the Tier A or Tier B cities of the nation. These include Kolkata, Hyderabad, Delhi, Mumbai, Ahmedabad, Pune, Bangalore or Chennai.

> Documents Required –

Basic and minimal Loan Against Property Documents Required includes domicile proof of the applicant, property papers of the real estate to be pledged and identity proof.