Almost every one of us has had a financial crisis in our life at one point or another. As in such crucial times, we often think about where to finance or borrow the required amount of money on an urgent basis. During such times, your property can help you fulfil your needs and aspirations.
People take a loan against property for many reasons like to expand their business, education, study abroad, take a vacation, or for medical treatments.
Suppose you have a property registered under your name, then you can approach the lender asking for a loan against your property. The lender will assess the market value of your asset and will sanction the loan if the title is clear.
But the most crucial thing is that even if you submit your property documents as collateral still most of the leading banks in India will ask you for income proof as it determines the repayment capacity of the borrower.
However, if you do not have a formal income proof needed by banks, there is no need to worry. As now there are few housing finance companies such as Shubham housing finance, Aadhar housing finance, Awas housing finance which provides loans to the individuals who earn in cash income.
Generally, banks will not provide you with a loan if you are getting salary by cash, you are in a business where sufficient income proof is not available like small shopkeepers, suppliers, or any other profession.
Here in this article, we will discuss everything you need to know of availing a loan against property without income proof.
Keep the following factors in mind to avail loan against property without income proof. Read on to know more.
#Clear all your dues on time:
If you own a credit card and pay all your dues on time, then you are likely to get an approval for the loan instantly without submitting any income proof. Clearing off debts not only helps in lowering the interest rates but also reduces the debt burden.
#Maintain a good credit score:
A good credit score gives the lender a sense of assurance regarding timely payment of EMIs from your end.
Remember, a low credit score can lead to loan rejection or approval at a high-interest rate. On the other hand, having a good credit score makes you eligible for affordable loan interest rates and other beneficial terms with the lender.
# Keep a Check on your Savings:
Maintaining an excellent monthly balance along with regular savings improves the chances of getting a loan against property approved.
#Justify your income to your representative:
In case of lack of income proof or ITR, you must specify your income source and why you do not have the necessary documents. Always make sure to provide the information in detail because the final decision is likely to depend on the information you provide.
#Apply with a Co-Applicant:
Assigning co-applicant increases the chances of your loan approval quickly. If your mother, father, brother, son, spouse, or unmarried daughter is an earning member with valid income proof, you can avail home improvement loan with the co-applicant. In such a case, lenders will consider the repayment capability of your co-applicant while determining loan interest rates and the loan amount.
#Opt for a Lower Loan to Value:
A loan to value is the percentage of the property’s market value offered as a loan by the lender. It is less of a risk for the lender, and for the borrower since less is being borrowed. Making higher down payments and availing a lower LTV improves your chances of getting the loan approved without income proof, and it posits positive borrower credibility.
#Provide income proof from other sources:
If you have an informal source of income such as rental income, fixed deposit interest income or income proof of any family member, then you too can stand a chance to get your loan approved.
Consider these pointers to avail the Loan Against Property at an affordable interest rate from Housing Finance companies like Shubham Housing Finance who are there to help people with informal income streams.
