A Secured Loan is a Loan where you need to pledge an asset as collateral. It enables you to draw a significant Loan amount based on the asset value and your eligibility. However, if you fail to repay the Loan, the bank has the right to confiscate the collateral. So, be cautious with it.
Different types of Secured Loans are: Loan Against Property (LAP), Loan Against Fixed Deposit (LAFD), and Loan Against Securities (LAS). Each product name gives you an idea of the type of asset you need to pledge to obtain the Loan.
This blog focuses on the Loan Against Property, also known as the Mortgage Loan. It mentions its most important eligibility and documentation requirements. Read on for all the details.
Mortgage Loan eligibility requirement:
The following individuals can apply for a Mortgage Loan:
Salaried individuals:
● A permanent employee at a public/private company or government.
● The applicant needs to be at least 24 years of age at the time of the Loan application and not older than the superannuation age during the Loan maturity.
Self-employed individuals:
● Any individual filing Income Tax Returns can apply for a Mortgage Loan.
● The individual should have a minimum age of 24 years on the Loan application and a maximum age of 65 years during Loan maturity.
Self-employed professionals:
● A self-employed professional, like a doctor, CA, etc., can apply for a Mortgage Loan.
● The applicant must be 24 years of age or more at the time of the Loan application and up to 65 years of age at the time of maturity.
Lease Rental Discounting:
● An Indian Resident holding a lease can apply for the Loan. However, the lease should be defined under the Companies Act of 1956.
● Only commercial properties are eligible to be pledged as collateral.
Note:
There is a general mention of the Mortgage Loan eligibility criteria. Almost all banks have specific eligibility criteria. Hence, always refer to the bank’s official website or mobile app to know their exact eligibility criteria.
Furthermore, different eligibility criteria are followed for NRIs. Check the bank’s official portals or reach out to their customer centre for details.
Mortgage Loan documentation requirement:
Personal documents required for a Mortgage Loan:
● Loan application form
● Pan Card
● Identity proof – Aadhar Card, Voter ID, Driver’s License, Government Employee ID or a Passport
● Address proof – Aadhar Card, Voter ID, Driving License, Utility bills,or the Property tax receipt
● Birth date proof – Aadhar Card, Driver’s License, Passport, Birth certificate, SSC marksheet
● Signature proof – Passport, Pan Card, Banker’s verification
Income documents required for Mortgage Loan:
Document requirements for Salaried applicants:
● 3 months’ pay slip
● 6 months’ slip / 2-year bonus proof (in case of variable pay)
● 6 months’ bank statement showing salary credit
● Last 2 years form 16
Document requirements for Self-employed applicants:
● 2 years ITR, Computation of income, Profit & Loss, Balance Sheet with CA sign & seal
● Tax Audit Report (Only if the Gross Turnover exceeds Rs 1 Crore or Gross Receipts exceed Rs 25 Lakhs)
● 6 months’ bank statements of personal and business accounts
● Business continuity proof of 5 years
Document required for Lease rental discounting:
● 6 months of bank statements showing rent credits
● Registered and valid lease agreement
● 2 years ITR, Computation of income, Profit & Loss, and Balance Sheet
● 1 year 26 AS
Property documents required for Mortgage Loan:
● You need to submit a set of property documents depending on the type of property you hold and the kind of Loan you have applied for. Consult the bank for all details.
Note:
This is a generic document list for a Mortgage Loan. The document requirements may vary between banks and individual applicants. Hence, rely only on the bank for specific information.
You need to provide original copies of some documents, while others may be photocopies. Request the bank for clarification of this to ensure everything is as required.
Summing It Up
Besides being an incredible addition to your investment portfolio, your assets can also serve as a gateway to Credit.
You can apply for Secured Loans: Loan Against Property, Loan Against Fixed Deposit, and Loan Against Securities.
This allows you to borrow a significant amount at a competitive interest rate while keeping your investment intact.
You need to meet simple eligibility criteria and submit a set of documents to apply for the Loan. The processing will be complete in a hassle-free manner in a reasonable time frame.
