How to Determine Your Property Loan Eligibility: A Complete Guide

Property loans or loans against property are a special type of credit offering. If you own a home -- residential or commercial or even a piece of land -- you can pledge it as collateral or security and avail of a loan against it. These loans that are availed by pledging a property already in one's name or property that one owns are known as a loan against property, property loan, or mortgage loan. 

Mortgage loan interest rates tend to be highly affordable, which makes loan EMIs economical or easy to repay. The low interest rates can primarily be attributed to the presence of the collateral, which significantly reduces the risk for the financial institutions. The loan repayment period can extend up to 20 years or even longer, depending on the loan applicant's repayment capacity and the financial institution they are doing business with, and the LTV ratio can go as high as 60 to 70%. The funds can be used to meet business requirements as well as take care of business-related expenses. Loan approval depends on property loan eligibility, which takes into consideration a variety of factors, including the loan applicant's CIBIL score, age, income, income stability, etc. 

Loan Against Property Eligibility Requirements

Those planning to secure a property loan must meet the following property loan eligibility criteria:

1. The loan applicant must be a residing citizen of India.

2. They must be 21 and 65 years of age. The maximum age is the age that one cannot exceed at the time of loan maturity. 

3. You must have a CIBIL score in the range of 750 to 900. Such a CIBIL score indicates excellent creditworthiness and will help you secure a loan easily and at the best possible loan terms and conditions. 

4. Make sure to have a stable income and job. This will also help improve your property loan eligibility. 

These are generic loans against property or mortgage loan requirements that form the property loan eligibility criteria for most lenders. However, your lender may expect you to meet certain additional eligibility requirements as well. So, it is best to speak to your lender and request them to explain to you their property loan eligibility requirements in detail. Knowing the qualifying criteria will help you navigate the loan easily and also secure the loan quickly. 

But, what if your property loan eligibility is low? Should you then give up on the idea of availing of a mortgage loan or look for other sources to arrange funds? Or are there things that you can do to increase your property loan eligibility? One can easily improve their property loan eligibility and secure a loan easily and on more beneficial loan terms and conditions by making use of the following hacks or tricks.

Simple Hacks to Improve Your Property Loan Eligibility 

1. Consider Adding a Co-Borrower: If you have low property loan eligibility and you think it may be difficult for you to get approved for a property loan or a mortgage loan, you should consider adding a co-borrower. A co-borrower is someone who shares the responsibility of loan repayment with the primary borrower. When the responsibility of loan repayment falls on two individuals, the chances of loan default automatically decrease. If the co-borrower is someone with excellent repayment capacity, loan repayment becomes easier. Make sure the person who you add as a co-borrower has a stable income, is not excessively dependent on credit, and is responsible for debt repayment. 

2. Add All Additional Income Sources: Many salaried and self-employed individuals only include income from their job or salary in their mortgage loan application. If your mortgage loan eligibility is low, you should consider adding income from different sources to your mortgage loan application. This will increase your debt-to-income ratio or FOIR and ability to pay loans, not only leading to you being approved for a mortgage loan quickly but also being able to secure higher loan sanctions at more beneficial loan terms and conditions. 

3. Pledge a High-Quality Collateral: Lastly, if you want to improve your mortgage loan eligibility, consider adding high-quality collateral. High-quality collaterals are properties with high resale value. Such properties minimize the risk for the lender and therefore, high-quality collaterals help borrowers secure mortgage loans quickly.