Here’s Everything You Need to Know About the Documentation Process While Getting a Loan Against Property!

You never know when you might face a situation where there is an urgent need for funds. In such a situation, if you do not have a good amount of savings to fall back on, one effective solution to take care of the problem is to apply for loan against property. A loan against property is a secured loan where a property is pledged to the lender as collateral for a loan amount. Now, as this is a secured loan, the lender’s risk is low, which is why the loan amount is often higher than that of an unsecured loan.

Before applying for this loan, it is very important to keep in mind the documents required for loan against property. Many borrowers have unnecessarily faced complications while completing the documentation process simply because they were not aware of the lender’s requirements. However, this can be easily avoided by simply making a note of the general documents needed for a loan against property.

Documentation process for getting a loan against property

Apart from the application form, the lender will also require ownership documents for the property that is being pledged as collateral. Along with this, you will also need to submit a property evaluation report. Now, make sure that all the details mentioned in these documents are accurate.

For borrowers who are salaried professionals, the documents required for mortgage loan are:

1. Proof of current residency
2. Proof of property ownership
3. Application form along with a photograph
4. Form 16
5. Valid photo identity
6. Cheque for processing fee
7. Bank statements (6 months)

For borrowers who are self-employed professionals, the documents required for mortgage loan are:

1. Proof of current residency
2. Proof of property ownership
3. Application form along with a photograph
4. Valid photo identity
5. IT returns of the past 3 years
6. Balance sheets along with profit and loss statements of the past 3 years
7. Bank statements (6 months)
8. Proof of existing business

Once you have submitted all the loan against property documents, the lender will then verify them. They will also verify your repayment capacity and once they are satisfied, your loan application will be processed. Do keep in mind that many lenders conduct field visits of the property that is pledged as collateral for the loan. You should know that the lender might also charge a processing fee and stamp duty. Once all the legal formalities are completed, the loan against property is sanctioned. The loan amount will then be disbursed, either in one transaction or in 2 to 3 instalments.

It is also important to know that the documents required to get a loan against property can differ from lender to lender. Not all financial institutions have the same terms and conditions, which is why it is considered best to inquire with the lender about their documentation requirements before applying for the loan.