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Are you looking to get a loan to fund your first small business or take that trip you have always dreamt of? While living everyday life and adulting, we lose track of our budgets and often feel lost and confused. We get it, expenses can be daunting,g and amidst this, we forget to live life. But we can’t choose to give up on our dreams. What do you do then? Loan Against Property (LAP) is thus a smart choice for individuals who need some extra cash. They can do this by leveraging their property.

Need help with how this works? We are here to help you out. Let’s discuss what a Loan Against Property (LAP) is and how you can benefit from it without even having income proof!

What is LAP?

A loan against property is a type of loan where you use your property as security. To get this loan, you pledge your property as collateral, it can be your home, commercial property, or land, as long as it's in your name. The lender will identify the current value of your property, and you can usually borrow about 50-80% of that value. Once approved, you can use the loan for various purposes like education, medical expenses, running your business, or even a vacation.

Benefits of Choosing a Loan Against Property

With multiple loan options available in the market, Loan against Property provides benefits and flexibility like no other.

It is a secured form of personal loan that allows you to cater to various personal and professional needs without any restrictions or having to disclose the reason. You can choose to use the funds for your child’s education, renovating your house, starting a small business, or even clearing your debts. Unlike various specific purpose loans ( Home loans, Car loans, student education loans, etc) LAP provides greater flexibility in letting you decide where the money goes.

Not just this, but LAP also allows you to borrow larger sums of money and a lower interest rate. So, when compared to other personal loans, this provides double the benefit.

Who can avail Loan against property?

Any salaried or self-employed individual can avail and take benefit of LAP by leveraging their residential or commercial properties.

Saying this, there are multiple factors lenders look at while approving the loan, as well as deciding the interest rate,s like employment type, location of the property, credit score, work

History, income proof, etc.

No,w what if you have no proof of income to show?

This can be the case in certain employment types, like freelancers. Because of the income fluctuation, these professions may not have income proof. In that case, banks will decide on loan applications as on the applicant's property value and other factors. Let's read about it in detail ahead.

LOAN AGAINST PROPERTY WITHOUT INCOME PROOF

Banks typically make it mandatory for you to submit income proof if you are looking to take a loan against property, just as security that you are capable of repaying the loan. This makes the process quick and hassle-free. But if you don’t have income proof and want to avail the benefits of LAP, getting the loan approved can be a tedious process.

You might have to fulfil extra conditions, and the whole process can take a while. In this case, borrowing less money can improve your chances of loan acceptance.

If you don't have proof of income, you might have to meet some other requirements to borrow against your home. Here are a few strategies that can help you:

1. Team up with a co-applicant:

Getting a friend or family member to join your loan application as a co-borrower can be a big help. Not only can you possibly borrow more money, but it also makes the lenders feel more secure about your ability to pay back

2. Benefit from your bank activity:

Look at your bank account activity before you apply for a loan. Lenders like to see responsible banking habits, like keeping a good balance or having a steady flow of income. This will help you boost your chances of getting approved for a loan.

3. Explain your lack of Income proof:

Explain to your loan relationship manager why you don't have income proof and have not filed a tax return. Having an honest conversation can help the lenders guide you through the process properly.

4. Choose a manageable Loan-to-Value (LTV) Ratio:

The Loan-to-Value Ratio shows how much money a bank can lend you based on your home's value. Let's say it's 80%, meaning they'd cover 80% and you'd pay the rest (20%). By choosing a lower LTV (borrowing a smaller percentage), you're more likely to get approved even without income proof.

Documents required for Loan Against Property without Income Proof

If you are looking to apply for a loan against property without income proof, here are certain mandatory documents:

-Proof of Identity ( Can be Aadhar card, PAN card, Voter's ID, Passport, or Driving License)

-Proof of address ( Can be Aadhar card, PAN card, Utility Bills, Passport, or Ration card)

-Bank Statements of the last 3 months

-Co-borrower information: If you are taking a loan with a co-guarantor, you will need to provide their personal and financial information, including proof of identity and income.

-Passport-size photographs

-Processing Fee Cheque

Conclusion

Availing a loan against property without income proof can be challenging and a long process, but we are here to make this easier for you. Aadhar Housing Finance helps you make better and more informed decisions, so whatever your approach toward the loan is, we are here to guide you along the way.

FAQs

Who can be co-applicants for my loan?

Any or all co-owners of the property can be a co-applicant for the loan. A person who is not a co-owner can also be a co-applicant for the loan.

What is the rate of interest?

The rate of interest on your loan depends on various factors like the value and location of the property, your income, market conditions, etc.

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