A loan against property helps you get quick access to some money as per the value of your residential or commercial property. Thus, if you have an urgent requirement for money, you can always keep your property as collateral and get cash.
What’s more, since a loan against property is a secured loan with your property being the security, lenders process the loan much faster, and your needs are fulfilled.
However, even though a loan against property is a helpful financial product to offer you quick disbursal of money, your loan against property could still be rejected. The rejection of a loan against property may be due to many factors.
Let’s provide you some of those important reasons that can lead to the rejection of your loan against property application.
Loan applicants are always in a hurry to avail a loan as soon as possible. Hence, many of them fail to provide their complete information in the loan against property application. You may find many lenders offering you a loan against property, but if you don’t provide them with enough information in the application form, there are higher chances that they may reject it straight away.
If the property that you want to keep as mortgage or collateral to grab a loan against property is under dispute, lenders will directly reject your application. Yes, it is vital to keep the property as security that’s free from all disputes for your loan against property application to get a green signal from lenders.
Do you have too many debts against your name and you still want to avail another one in the form of a loan against property? Well, there are higher chances for lenders to reject your loan against property application. Why? It’s because lenders always see your repaying limit and how much you already have. Hence, you need to keep all your expenditure within the limit until the LAP gets approved by the lender. Thus, if you want to avail a loan against property, you need to take care of your existing debts and then only apply.
If you want to avail a loan against property, you should keep in mind that the property that you want to keep as collateral must have high property value than the loan expected. If you want to apply for a higher amount than what your property can fetch, your loan against property application may be rejected. Additionally, you would also need to provide authentic documents to the lender which proves your repayment capability and ownership of the property.
A good CIBIL Score is another vital thing that your lender will always look up to while processing your application for any loan and loan against property is not an exception. If you have a good Credit Score, it exhibits your healthy repayment capacity. If you don’t have a good CIBIL Score, your loan against property application won’t be approved. Hence, if you have a poor CIBIL Score, first improve it by paying all existing EMIs on time and apply for a LAP after 6 months or so.
The Bottom Line
A loan against property can give you quick access to money if you have the required eligibility and fulfil the terms and conditions of the lenders. Now that you know the factors that can derail your loan against property application take care of them and be loan ready!