Loan against property helps you in getting instant funds. You can then invest these funds wherever you want. But to get the loan, you need to submit a few documents with the lender. You should know about them so that you can plan.
Whether you need funds for a new house or business expansion, a loan against property is a great option. It helps you put your property as collateral and get a specific percentage of its current market value. But the processing of the loan isn’t as convenient as you may think. Along with your ownership, the lender also cross checks the value of the property. They analyze everything and then only approve of your application. There are some loan against property documents required by the lender. You can keep these handy to let the processing go quicker.
#1 Address Proof
The first and most crucial document for a loan against property is proof that you own it. You can show this through the documents that contain your primary address, such as:
- Ration Card
- Recognized Public Authority Letters
- Utility Bill (Electricity, Water, and Gas)
- Voter ID
- Bank Account Statements
You only need to remember that these documents must contain the primary address as the address of the property you are taking a loan against. In case you have multiple properties, you must use a loan against the property calculator to see which one you want to set up for the loan. The address proof will also change with the change in the property.
#2 Identity Proof
This is the essential requirement for any official work, ranging from loan applications to opening an account. Your Aadhar card, PAN card, Voter ID, and Passport can serve as identity proof documents. However, you must check with the lender for any specific requirements. Some of the lenders have strict rules for what type of documents they consider under a particular category. So they may not accept your Passport or other documents as proof of identity.
#3 Ownership Proof
The address proof you submitted earlier isn’t enough to prove that you own a property. Therefore, you need to submit a valid proof of ownership on the property you are borrowing loan against. This generally includes the official documents of the property. However, you should check with the lender for the documents they accept as proof of ownership. It may include utility bills like electricity, water, telephone, gas, etc. If you want a loan against business property, you will have to provide the lender with evidence that the business exists.
#4 Income Proof
The primary concern of the lender is how and when you will repay the loan. That is why they go through so many documents and check how to gain their money if you aren’t able to pay it back. Your income proof ensures them that you are capable of repaying the regular EMIs. There can be two types of documents here:
- Salaried Person: If you have a regular salary from an employer, you will need to submit your salary slips with bank statements of the previous three months.
- Self-Employed: If you have a business of your own, your bank statements alone will show your regular income.
These documents will also help the lender in checking how much you earn and how much you spend. So they will know the amount you can repay every month. You need to check out a loan against property calculator to see how much amount you can borrow. You will get an idea of the loan by this only.
#5 Income Tax Proof
There is no better way to prove your income than your tax return documents. Therefore, most lenders will require you to submit your IT return copies of three or more financial years. This again ensures that you have enough income to repay the amount you are borrowing. The importance of these documents increases if you are a regular salaried person. You can make your loan processing smooth by keeping all these loans against property documents required by the lender handy. Are you looking for vat registration uae then read more how to apply for VAT registration in UAE.