Tips for Availing a Loan Against Property Without Income Proof:

A loan against property (LAP) is a loan that is taken against the mortgage of a residential or commercial property, or plot. The property’s market value is assessed before sanctioning the loan, and if the title deeds are found to be clear and free of any legal encumbrances, the loan is given as a certain percentage of the property's current market value.

Pre-requisites to avail a loan against property: The major requirement is that there should be no legal encumbrances to the property and the title should be in your name.

End Use: The end use of a loan against property is not restricted and could be used for any legitimate purpose. Applying for a loan against property can be a great way to get a loan to meet your financial needs without selling off your asset to raise funds.

Loan Amount: Depending on the lender, and the market price of the property, the loan amount could typically range from 40 per cent to 60 per cent of the assessed market value.

Interest Rate: Since LAP is a secured loan, i.e., the loan is secured against your property, the interest rates are relatively low, as compared to a personal loan, for example.

Tips for Availing a Loan Against Property Without Income Proof:

Here is the bad news: Any lender will ask for income proof when you apply for a loan, even if you offer collateral, so that they are assured that you will have enough income to repay the loan on time and in full. However, if you are in a situation that calls for funds and you have no income proof, here are some tips that might help you.

  • Talk to the relationship manager. Discuss with your bank/manager if there is any other reassurance that you can give which will make it clear that you will make your repayments on time.

  • Add a co-applicant: Having a co-applicant who has a valid credit history and steady income might tip the scales in your favor.

  • Try peer-to-peer lenders: You could approach online peer-to-peer lenders and see whether they accept applications without income proofs.

Maintain a good credit history: Always be vigilant regarding your credit health. Make sure you pay all your due on time and keep tracking your credit reports at least twice in a year. An excellent prior credit history will be a positive factor in your favour, any time you apply for credit.

It could be an uphill task getting a loan against property without income proof.  The best you can hope for is to visit potential lenders for advice on whether you qualify, the documentation required, and for help in the application process.