A Loan Against Property helps you get the funds you need to address big-ticket expenses, be it home improvement, overseas education, medical treatment or more. All you do is pledge your residential or commercial property to avail financing.
However, lenders who offer a loan against property (LAP) often require certain documents to assess your eligibility, income and other parameters. Some lenders even offer a loan against property without income proof, and these instruments are often easier to avail. In fact, you can get a LAP without income proof or your income tax return with a little planning.
Be it banks, non-banking financial companies or housing finance companies, every lender will require some proof of income regardless of your property documents being in order. This is why getting approval for an affordable loan against property without income proof can be difficult.
While you may assume that having a property of your own makes you automatically eligible for a loan against property, lenders check your creditworthiness to ensure you have the ability to make the repayment on time.
For any reason, if you are unable to provide income proof, be it with bank statements or the ITR, you can do so by using the tips below. Before you get started, ensure that you:
Check your eligibility using the LAP eligibility calculator available on Bajaj Markets
Have your other documents required for a loan against property ready to submit
Here is the paperwork you can keep at hand to apply for a (mortgage) loan against property without income proof:
Correctly filled loan against property application form
Proof of identity such as your Aadhaar, passport, voter ID, driving licence, and more
Address proof such as your utility bill, ration card, passport or Aadhaar card
Discuss your plan with your existing lender: If you are an existing customer with a lender such as a bank or NBFC, contact your relationship manager. Usually, this individual has access to your financial profile and can help you understand if you can get a loan against property without any income proof or ITR.
If you have enough savings in your account or investments that can help assure the lender of repayment, talking to your relationship manager can get your approval on your application.
Get a co-applicant on board: One of the best ways to get a loan against property without ITR is to apply for a joint loan. You can do this with your spouse, parent or sibling but only if they have a good credit score and stable income.
This way, you can submit their ITR and income proof to assure lenders of timely repayment.
Clarify your sources of income: Most lenders approve a LAP application only after the property is checked by an evaluator or certified valuer. This helps them understand the property value and accordingly offer you financing.
During the valuer’s visit, you can explain your sources of income, be it through a business in the informal sector or other means such as rental income. The officer can then take into account your repayment capability on the basis of your conversation. This can help you get approval for a LAP without income proof.
Monitor and top up your savings account balance: Keep in mind that when you apply for a mortgage loan against property without income proof, lenders will review your banking habits closely. So, ensure there are sufficient funds in your account.
With healthy banking habits, you can boost the likelihood of your loan application being seen in a positive light even without these important documents.
Account for the lack of income documents: You can also try and explain why you do not have your income tax return or income proof to the relevant representatives of the lender. By giving a valid reason, your application for a LAP without income proof may be considered.
Do be proactive about talking to a tax consultant and file your returns for the current financial year if you are eligible to do so. This way, you showcase reliability and increase your chances of approval.
Consider accepting a decreased LTV: LTV stands for Loan to Value ratio, which is the loan amount against the value of the property you aim to mortgage. Usually, lenders offer 75% to 95% of the property value as a loan.
Since you are applying for a loan against property without any income proof, you can reduce your ask and choose a lower principal. This will help boost your eligibility as the lender’s risk is reduced.
Loan Against Property (LAP) is a loan you get by pledging a property you own. This is a secured loan, which means it requires collateral. This collateral may be either a residential or commercial property registered under your name.
Lenders can offer you up to 90% of the property value as a loan, and you will be required to repay it in EMIs over a tenure of your choosing. The repayment timeline may go from 15 to 30 years.
A secured loan like a loan taken against a property often comes with a more competitive interest rate as compared to an unsecured loan like a personal loan. You can take this loan to finance a range of goals, be it to expand your business, fund your child’s marriage or studies and more.
Yes, it is possible for you to avail a Loan Against Property (LAP) without an income tax return. However, you will need to prove your ability to pay EMIs on time and in full to receive approval on your loan application.
You can get a home loan without your pay slip or income tax return by choosing any of the options below:
Apply for a joint home loan with a co-applicant who has the right documents in place
File your income tax returns for the current year immediately
Apply for a home loan based on lenders’ affordable housing schemes that reduce the eligibility terms that you need to meet
Ensure you showcase all your sources of income and explain your creditworthiness to the lender’s representatives
Make sure you have a high balance in your savings account to prove your repayment ability
It is mandatory to file your income tax return in India. If you haven’t filed your ITR for any reason other than if your income is below the taxable limit, you will have to pay the late fees, interest and penalty.
Additionally, you may face imprisonment for a term of up to two years. So, it is best for you to consult a chartered accountant and understand the process to file your ITR at once.
This depends on the lender you choose to apply for a loan against property with. Generally, lenders take a week to approve such loan applications since the property collateral has to be evaluated.
However, if you are submitting your application for a loan against property without ITR, you may submit a co-applicant’s documents or use other means. This may elongate the process.
All loans in general require proof of income as all loans need to be repaid. Lenders only approve loans after they evaluate your ability to repay and your creditworthiness. It is precisely for this reason that your credit score, bank statements, pay slips or salary slips and income tax returns are required during your loan application.
Even when it comes to a loan against property, no income proof can pose a hassle. However, you can get approval by applying for a joint loan with a co-applicant who has proof of income documents or by explaining your repayment plan.