A Comprehensive Guide on Documents Required to Apply for a Loan Against Property
A Loan Against Property (LAP) is a popular type of secured loan where individuals can pledge their property and access funds to meet various financial needs. The key advantage of a loan against property is the lower interest rate compared to personal loans due to the additional security offered by the property. In case of LAP, the property continues to remain in the name of the borrower, and he can still continue using it while servicing the loan. However, to proceed with a loan against property application, various documents are required.
This article aims to provide borrowers a clear picture regarding the list of documents required for loan against property application to ease the process.
Proof of Identity
Primarily, lenders look for valid documents such as Aadhaar Card, PAN Card, Voter’s ID Card, Passport or Driving License, which can serve as identification proof. It’s essential to submit any one of these documents while applying for a loan against property.
Address Proof
It is also crucial to provide an address proof. Documents like the electricity bill, water bill, telephone bill, or ration card can serve this purpose. If the applicant is not residing at the owned property, he/she should submit proof of the owned property’s location.
Income Proof
Since repayment ability is vital for sanctioning a loan, lenders require a proof of income. For salaried individuals, this can be in the form of salary slips or IT returns. For self-employed, the profit and loss (P&L) statement, balance sheet, and income tax returns of the past 2-3 years are generally considered as income proof.
Property Documents
Potential lenders will need documents related to the property to be mortgaged. These include the sale deed, agreement of sale with the builder (if applicable), the property’s title deeds and reports, approved building plan or layout, property tax receipts, and any other documents establishing the property ownership. The latest property market valuation report may also be requested by the lender.
Photographs
Borrowers must also submit recent passport-sized photos. Usually, two photographs are needed in most cases.
Bank Statements
Bank statements are another critical set of documents required for loan against property. They reflect the financial stability and credit behaviour of the borrower. Usually, the lenders request bank statements of the past 6 months or more.
Other Documents (If any)
In some cases, lenders may ask for additional documents, like a statement of all loans and credit facilities availed by the borrower. Also, in case of any existing loans, borrowers should provide the sanction letter, loan schedule, and repayment track. Depending upon the lender and the borrower’s profile, the document requirements may vary.
Bajaj Finserv App
Securing a mortgage loan is now hassle-free with the Bajaj Finserv app. Its easy-to-use interface facilitates swifter funds, eligibility checks, and transparent repayment options. Users benefit from instant updates and guidance, empowering them to maximize property assets efficiently and make informed financial decisions.
Conclusion
Securing a loan against property is an effective way to meet substantial fund requirements at lower interest rates. However, the key to a smooth application process is being prepared with all necessary documentation. The list of documents required for loan against property primarily consists of identity proof, address proof, income proof, property documents, photographs, and bank statements. Remember, the more organized and clear your documentation, the smoother will be the loan approval process. Therefore, it’s essential to keep all these documents ready and updated to avoid any hassle during the loan application process. Ultimately, careful planning and organization can lead to a successful and quick loan approval.
