If you are an individual who owns commercial or residential property then using a loan against property is the easiest way to raise finance, provided you meet the loan against property eligibility criteria. The collateral instils a sense of security amongst lenders and gives you access to a high amount money at a lower rate of interest. In addition, the repayment window is long, making it a stress-free way to avail credit. By pledging commercial or residential property, you can use the amount for a business start-up, for a medical expense or to fund your children’s education at a college overseas.
But, in order to get the high-value instant mortgage loan that you seek, there are certain things you must do as a self-employed professional.
Pledge a Property from a Reputed Builder
A registered property from a trusted name usually carries a higher resale value. Factors such as connectivity, construction quality, location, necessary certifications and amenities contribute to the property’s value, and this helps boost you’re the amount you can borrow. So, if you have the choice between an ancestral property and one in the IT district of the city from a reputed builder, ample amenities and good connectivity, choose the latter. This betters your chances of getting a high amount loan against property.
Maintain a High Credit Score
A good credit score shows that you’re responsible with handling credit, and as a result gives you access to a high loan amount relatively easily. A score above 700 is ideal as it shows lenders you are financially responsible. Even if you have a lower score, you may get the loan but at a higher rate of interest. So, if your score is low work on repaying existing debt and lowering your credit utilisation ratio first and apply after your score shows some improvement.
Showcase Repayment Ability
One way to increase the amount you can borrow for is by including all your sources of income with documents that prove this. When a lender is convinced that you have smooth cash flow be it income from your primary occupation or interest from investments, you will be able to access a higher loan amount. This is especially important if your primary source of income is low or infrequent. You can even consult with a financial advisor about all your sources of income and see if they can be included.
Additional Read: Tax benefits associated with taking a loan against property
Be within the Approved Age Bracket
Each lender has their own loan against property eligibility criteria and age plays a large factor when it comes to determining the loan amount you can borrow. Lenders do not give out high amount loans to people below the age of 24 and above the age of 70. If you are a young individual, a lender may view you as financially inexperienced and hold off on extending a high amount. On the other hand, if you are closer to 70, you earning capacity is likely to be minimal or nil, which is why lenders may be reluctant to give you a high-value loan.
When you take a Loan Against Property from Bajaj Finserv, for example, as a self-employed professional you must be between 25 and 70 years of age to get a loan of up to Rs.3.5 crore. Once you have the loan against property documents required in order to prove your eligibility, you can get access to the loan within 72 hours.
By following these tips, you can avail a high loan amount as a self-employed professional to meet professional and personal needs.