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What is Loan Against Property Eligibility?

When it comes to availing a loan against property, eligibility is an important factor. It affects not only the affordability but also how seamlessly you get the loan. Lenders have these criteria to ensure that you are a creditworthy borrower and will repay the loan on time. 

 

Different lenders have different eligibility criteria for loan against property (LAP), but the categories assessed are usually common across lenders. The common eligibility criteria for LAP revolve around your age, income, nature of employment, and property valuation. To get more insight about LAP eligibility, how it is calculated, and more, read on.

How is Loan Against Property Eligibility Calculated?

In simple terms, how you fare against the terms set gives the lender an idea about your repayment ability. So, the calculation of eligibility criteria for a loan against property is also based on assessing your financial stability and earnings. 

 

 

For this, the lenders check your age, income, debt, credit score, and nature of employment. Your age is an important factor because it reveals the number of years ahead of you in your career. Based on this, lenders can estimate the length of your stable earning years in order to repay without default. 

 

This is because LAP is generally a loan with a longer tenure, and if you earn for a longer period, you are more likely to pay all your installments on time. Similarly, your income and obligations give the lender an idea about the repayment amount you can manage.

 

For example, say you have a monthly income of ₹50,000 and your monthly existing EMIs are ₹20,000. Here your disposable income for a loan becomes ₹30,000. If you apply for a loan whose repayment instalment comes close to ₹30,000, approval may become difficult. 

 

With a low disposable income, lenders may not have faith in your repayment ability. 

 

Similarly, lenders consider your credit score as it gives them an overview of your borrowing history, enabling them to assess your behaviour with credit.  

 

In calculating your eligibility for a loan against property, lenders also consider the value of your property. This is to ensure that the property is worth the loan amount you are applying for. 

 

You can even use a LAP eligibility calculator, an online tool, to check what you qualify for before applying. Doing this can enable you to apply for a loan that you are eligible for and thus increase the chances of approval. 

 

Simply fill in the required details – age, income, expenses, residential city and the tool will give you an estimate of the loan amount you are eligible for. 

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Loan Against Property Eligibility Criteria

Given below is a tabular overview of the common loan against property eligibility criteria that you should know of before applying: 

Parameters

Minimum Requirements for Salaried Individuals

Minimum Requirements for Self-employed Individuals

Age

Above 21 and under 68 years

Above 23 and under 70 years

Status of Residence

Permanent resident of India

Should be residing in any of the lender’s approved cities

Employment status

Employed at a PSU, a private company or an MNC

Self-employed with a steady income

Maximum loan tenure available

Flexible repayment tenure of up to 25 years

Flexible repayment tenure of up to 25 years

Maximum loan amount

Up to ₹15 Crores

Up to ₹15 Crores

Disclaimer: The above LAP eligibility criteria are general and may vary across lenders

Loan Against Property Eligibility Criteria of Various Lenders

Lender

Eligibility Criteria

Bajaj Housing Finance Limited LAP

  • Maximum LAP value: Up to ₹5 Crores
  • Age limit: 23-60 years
  • Minimum monthly income: Subject to lender discretion

HFFC LAP

  • Maximum LAP value: Up to ₹40 Lakhs
  • Age limit: 18-65 years
  • Minimum monthly income: ₹10,000

ICICI Bank LAP

  • Maximum LAP value: Up to ₹5 Cr
  • Age limit: 23-65 years
  • Minimum monthly income: ₹25,000

India Shelter

  • Maximum LAP value: Up to ₹15% p.a.
  • Age limit: N/A
  • Minimum monthly income: N/A

LIC Housing Finance LAP

  • Maximum LAP value: Up to ₹15 Cr
  • Age limit: 21-65 years
  • Minimum monthly income: ₹20,000

PNB Housing Finance Limited LAP

  • Maximum LAP value: Up to ₹15 Cr
  • Age limit: Under 65 years
  • Minimum monthly income: ₹18,000

Shriram Housing Finance LAP

  • Maximum LAP value: Up to ₹10 Cr
  • Age limit: 24-70 years
  • Minimum monthly income: ₹30,000

Shubham Housing LAP

  • Maximum LAP value: Up to ₹15 Lakhs
  • Age limit: 21-65 years
  • Minimum monthly income: Subject to lender discretion

Disclaimer: The above amount and criteria are subject to change at the lender’s discretion.

How to Improve Eligibility for Loan against Property?

  • Pay off existing debt: Reducing your current EMIs helps you qualify for a larger loan. This is because lenders assess your disposable income to calculate your LAP eligibility.

  • Apply jointly: Having a co-applicant who has a strong income profile and credit score improves your loan against property eligibility.

  • Boost your financial profile: Disclosing secondary sources of income, like rental income, and bolstering your credit score are sure ways of availing more financing.

  • Approach a familiar lender: Borrowing from a lender you already have a relationship with helps boost your profile. It can help you secure the funds you need more easily.

  • Keep the LTV reasonable: Maintaining a high loan-to-value ratio increases the lending risk. Apply within limits to increase your loan against property eligibility.

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LAP Eligibility Calculator FAQs

What is the maximum loan against property amount I can avail?

You can avail up to ₹15 Crores as a Loan Against Property. However, this may vary depending on the lender. For a better estimate of how much you should apply for based on your financial profile, use a loan against property eligibility calculator.

How long can the repayment tenure for a loan against property be?

The repayment tenure over which you are required to pay off your loan against property can range up to 25 years. The actual tenure depends on factors such as your age, borrower type and the loan against property amount. You can learn more about this on Bajaj Markets.

What can be kept as security for a mortgage loan?

A mortgage loan, also known as a loan against property, is only approved by a lender when you pledge a residential or a commercial property. This security needs to be in your name.

Who can be a co-applicant for a loan against property?

Only those who are directly related to the property owner by blood can be co-applicants. The owner’s daughter, however, can only be a co-applicant if she is single.

 

What is the minimum income required to avail a LAP?

The income criterion for loan against property eligibility varies for each lender and depends on whether you are applying as a salaried or as a self-employed individual. It can go as low as ₹10,000. 

 

What is the minimum and maximum age criteria for a loan against property?

Although this LAP eligibility criterion differs for each lender, it generally ranges between 21 and 70 years.

Can an NRI avail LAP?

This depends on the lender. Generally, you can avail a LAP if the property you are mortgaging is in India. 

 

Does a Loan Against Property Offer Tax Benefits?

Yes, you can enjoy tax benefits on your loan against property. The tax benefits available are in accordance with section 37 (1) if used towards business expenses, and section 24 (b) if used to buy a new property.

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