Loans against property or property loans offer many benefits. To start with, loans against property are one of the few financing tools that give borrowers access to sizable funds to tackle any financial emergency related to housing or business. Further, the long tenor and the low rate of interest associated with these loans make loans against property easy to repay. Further, with the help of loans against property tax benefits, borrowers can also reduce their tax liability each year. More importantly, lenders offer the loan against a property balance transfer facility, which borrowers can opt for. Using this facility, borrowers can transfer their remaining loan amount to another lender to secure better terms and conditions. 

These important factors have been contributing to the increasing demand for property loans. Lenders have certain pre-determined eligibility criteria for property loans that the borrowers need to meet. Individuals applying for a property loan must familiarize themselves with the loan against property eligibility criteria to increase the chances of loan approval as well as the ability to negotiate for a beneficial interest rate. 

Loan Against Property Eligibility Criteria for Salaried and Self-Employed Individuals 

Eligibility Criteria for Property Loans for Salaried Individuals 

Salaried individuals who meet the following eligibility requirements are considered eligible for a property loan:

1. The applicant must be a citizen of India.

2. They must be between 25 and 75 years of age. Age requirements vary from lender to lender and the maximum age is always the age of the applicant at the time of applying for the loan and not at the time of loan maturity. 

3. The applicant must have a credit score of 750 or above. Some lenders also agree to lend money to borrowers with a credit score of 700. 

4. Lastly, the loan applicant must have a stable job and source of income. 

5. The loan applicant must be the rightful owner of the property they plan to pledge as security for the loan.

Loan Against Property Criteria for Self-Employed Individuals 

1. The loan applicant must be a residing citizen of India.

2. They must be between 25 and 85 years of age. Age requirements vary from lender to lender. So, it is always a good idea to check with your lender if you qualify for their age requirements.

3. The loan applicant must have a credit score of at least 700 and must have all the property papers in their name.

4. Finally, the loan applicant must have a stable business and must be able to show at least 5 years of business vintage. 

Salaried and self-employed individuals who meet these qualifying criteria can apply for a loan against property.

Here’s What You Must Keep in Mind When Availing Yourself of a Property Loan 

If you are planning to apply for a property loan, here are a few things you must keep in mind to experience a hassle-free loan application and repayment journey. 

1. Property loans are secured by the property bought with the loan money and failing to pay one’s loan EMIs for more than six months can lead to one’s property getting seized and sold for loan recovery. Loan applicants must therefore use a loan against property EMI calculator and borrow a loan amount they know they will be able to comfortably repay.

2. If you use the funds availed of under loans against property to buy another property, you can claim property loan tax benefits on payments made towards the interest component repayment of one’s loan under Section 24b of the ITA. If you use the funds to meet business requirements, you can avail yourself of tax benefits under Section 37(b) of the Income Tax Act. 

3. Almost all lenders offer the loan against the property balance transfer facility these days. So, if you find another lender offering you a property loan on better loan terms and conditions, you can balance transfer your loan to them after performing a cost-benefit analysis. A loan against property eligibility calculator will help in this regard.

4. Loan borrowers must also try their best to avail of their property loan at the lowest interest rate possible. Having an excellent credit score and pledging high-quality collateral will prove helpful.