To Factors That Affect Your Loan Against Property Eligibility

Taking a major step in one’s life involves a great deal of money, and acquiring a source for it is always challenging. The dream steps may involve availing capital for higher education, marriage, medical emergency, home construction, or business requirements. There are many ways to fulfill your adequate financial need, and one such common practice is to take a loan against your property. Property loans have comparatively lower interest rates than personal loans and offer a variety of benefits like easy processing procedures. The Loan Against Property (LAP) or mortgage loan is the loan sanctioned by a financial institution against a property owned by the prospective borrower. However, the owner should qualify all the necessary eligibility criteria proposed by the bank in order to obtain the loan amount. 

The various factors which affect your loan against property eligibility:

Age of the Candidate:

The candidate’s age plays a significant role in determining the ability to the repayment of the debt. If the borrower has retired or will shortly reach the retirement age, there are high chances for the loan application to get rejected. Thus, getting a shorter-duration loan or including a co-applicant on board the loan application will increase your chances for quick loan approval. 

Present Employment Status:

The financial institute ensures that the applicant has a regular source of income or salary to ascertain the borrower’s capabilities of consistently paying the monthly installments. Another critical criterion affecting the candidate’s creditability is how long they have worked for the same organization, as frequent job switching can give the impression of a relatively unstable financial situation.

Solid Property Documents:

The candidate can obtain the loan only if the property documents are genuine and validated by the appropriate authority. Any irregularities or variations regarding the document’s registration, permissions, building plans, clearance, and other common factors will significantly reduce your chance to obtain the desired amount from the lender. The financial institutes might likely reject the loan application of those properties associated with ongoing legal battles.

Insurance policy of the property:

The insurance policy of the mortgaged property can add benefit to the candidate’s loan application as it is a sense of security against the property. An insured property will provide the lender confidence and guarantee that the building will not become a non-performing asset in the future years.

Improper Income Tax Returns (ITRs):

The financial institute may reject the borrower’s loan application even though they have a regular job or income source due to improper or irregular ITRs. Filing your ITRs for a steady 3-4 years would give an impression of a stable financial situation and increase your chance of availing of the loan.

Insufficient Tenure:

The lender might reject the candidate’s loan application if the expected tenure they are looking to repay the loan is too low or too high regarding your average monthly income. The candidate can increase their chances of getting a loan by increasing the loan duration so that they have to pay lower EMIs with their low-income earnings.


The significant factor affecting a candidate’s loan application is mentioned above, but it can vary across different financial institutes and lenders with only a few additional elements. The other factors might include rejection of a previous loan application, bad credit history, and insufficient income sources that can reduce your chance of receiving your loan. So, before filing for a loan application, ensure that all the necessary documents and certificates are in order and valid to increase your chances of a successful outcome.         

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