If you are applying for a loan against property, it is important to know what documents you're supposed to submit. Read on to find out if original documents are required for a Loan against Property.
A loan against property is a loan where the borrower gets a secured interest in his/her property. This means that the lender can take over possession of the property and sell it if he or she so desires. It is also known as mortgage, hypothecation, pledge or encumbrance.
The terms of such loans are usually very long-term (one to five years), with monthly payments being made for this period. The amount borrowed may be higher than what you would borrow on your own; however, there is no risk involved because you will not have to pay back more than you have borrowed from the bank.
What is Loan Against Property?
A loan Against Property is a secured loan. The loan is approved once you mortgage your residential or commercial property. The bank approves the loan amount corresponding to the current market value of the property. As a loan , you can mortgage your home, rental property, or any land you own. However, you must ensure that the ownership of the property is clear.
Why is Loan Against Property Suitable for you?
Home loans are a popular financial product that allows people to use their property to get a loan. This loan can be used for personal purposes or to cover larger expenses. Banks and lenders provide this loan with ownership of residential buildings or commercial facilities or land. Property must be mortgaged to the bank. The market value of the property decides the loan amount.
When you provide property you own (whether residential or commercial) as collateral for a loan, it’s called a property loan. This is a popular type of loan because it is cheaper than a personal loan and offers larger loan amounts over a longer repayment period.
It is similar to a personal loan in that you can use the loan amount for any purpose – such as debt consolidation, business expansion, educational expenses, family ly or medical emergencies.
A key advantage of getting a home loan is that you can benefit from loan-interest rates So you can borrow large sums of money and pay off your mortgage cheaply without worrying about costs. Affordable rates can also help you manage cash flow effectively throughout your tenure.
Documents Required For Loan Against Property
The eligibility criteria for a loan against property vary from one bank to another. Certain documents are required to go through the loan application process.
The applicant needs to submit these documents:
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Identification Documents
The applicant has to submit a proof of identification. It can be a PAN Card, Adhaar Card, Driving License, Passport, Employee ID, Ration Card etc. The identification documents are required to be eligible for further processing of the loan application.
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Address Proof
The address proof is needed by the bank so that they are aware of their permanent residence. Utility bills (not older than 2 months) , address verification by proper authorities, Voter ID , Bank passbook or Bank Statement can be submitted as a proof of address. A passport is also accepted.
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Residence Ownership Proof
Residence ownership proof refers to the proof of ownership of the property where the applicant lives. It can be property documents, maintenance bills or electricity bills. These documents make the bank aware of the ownership of the property where the applicant lives. This is one of the most important documents required for the application process.
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Income Proof
Another document required for the loan application is Income Proof. You can submit the Payslip (of the last 2 months), Increment letter, Promotion letter, IT returns or Form16. All these documents qualify as proof of income. Besides these, you can also submit a certified letter from the Employer as a proof of income.
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Job Continuity Proof
A job appointment letter or Employment Certificate is accepted as job continuity proof and even an experience certificate is suitable to be submitted as proof of job continuity.
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Bank Statements
Bank statements of salary of last 6 months if you’re a salaried person or The bank statements of last 1 year if you own a business are to be submitted to the bank for the loan application process.
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Loan Records
If you have taken any type of loan, you need to inform the bank about it for verification purposes. Whether or not you have a loan already affects your current loan application procedure and it is very important that you submit a sanction letter of existing loans and their payment track record.
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Investment Proof
You need to inform the bank about any investments you’ve made. If you have a fixed deposit or shares, you need to provide proper documents to verify that.
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Property Documents
You have to submit copies of documents of the property to move further with your loan application process. You have to provide the bank with the copies of the sale deed, Copy of agreement , maintenance bill etc.
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Processing Cheque
A processing cheque is required so that the documents for the loan can be processed. Do not forget to submit this else your application might not move further in the process.
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Business Existence Proof
If the applicant owns a business, they need to submit appropriate documents to prove the existence of their business. Documents accepted as proof of business include a sales deed, copy of tax registration company registration license.
It is very important that you provide the proper documentation to go on with the loan process. Vakilsearch can help you with that. You can contact vakilsearch if you want help with your loan application process. The experts at vakilseach will help you prepare the proper documents and make the process simple for you.
Conclusion
A real estate loan provides you with the maximum value of your property. It unlocks the real potential of the property. In addition to the general use of the property Verification, it can also help you get a loan at a lower interest rate. The borrower can retain title to the property while making a loan against the same property.
You can contact vakilsearch if you want to know more about the process. Vakilsearch has an amazing team of experts who guide you through the complete end to end process of taking a loan against property. You can ask your questions about your loan application and they will help you and make the process hassle free for you.
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