Loan against property is one of the common mortgage loans due to its features like low rate of interest, faster approval, longer tenure and maximum loan quantum. Nowadays, more and more people are opting for this loan as many leading financial institutions are offering exciting and flexible loan terms. It is extremely easy to apply for "Loan against Property" as one can take it for commercial as well as residential property. However, it is easy to secure but still your application can get rejected. So get prepared with such reasons to which your application get rejected and what you can do to avoid it.
Review your Documents: It is very important to have a right set of documents to get your loan passed. One has to submit their KYC details along with the bank statements, income proof etc. for the loan. The property to be pledged should be clearly in your name and you should also have a plan copy of your property. If any of these documents are illegal then your application will be rejected immediately.
Professional Stability: One should have a stable income whether you are self-employed or salaried to repay your loan against property. If you have switched too many jobs or faced losses in your business, your loan application gets rejected. Therefore, make sure that you have been in your current position for at least two years or gained a measurable profit in your business.
Poor Credit Score: Every lender is very specific when it comes to credit score. One needs to have a strong credit score to approve your loan application but if you have a poor score due to default on existing loans or credit card bill payments, your loan application will get rejected. Therefore, build a good credit score and then "Apply For Loan against Property".
Multiple Debts: Having existing loans and outstanding payments can burden your monthly financial budget. If you have multiple debts then financial institutions get a perception that you are under lot of financial debt and lending you additionally may lead you to land up in a defaulter’s list. It is advisable to consolidate your debts first, and then apply for another loan.
Loan Default: If you have taken a loan before and haven’t paid it back then it can have a bad impression on your financial history. This gives a sense to the lender that borrower is not trust-worthy and won’t be able to pay back the loan. You can avoid this by paying off your debt on time and plan your finances to avoid any late payment.
Property with Legal Disputes: Every lender check the property’s eligibility along with applicant’s eligibility. If your property is going through any legal dispute, your loan application might get rejected. Moreover, if your property has been declared as illegal by local administrative body, it reflects negatively on your loan application. So we suggest every potential borrower to clear their property from any legal dispute to avoid any rejection in loan against property.
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