Increase Your LAP Loan Eligibility By Following the Given Tips

 Loan against property (LAP) is a secured type of loan in which a borrower uses his/her property as collateral. LAP is one of the most preferred financial products when it comes to large funds due to its lower interest rate than personal loans. However, not everyone is able to get the desired loan amount or the loan against property eligibility they seek. In this article, we will discuss some tips that can help you increase your eligibility by using the given LAP eligibility calculator.

1. Maintaining a Good Credit Score

A credit score is a critical factor in determining loan against property eligibility. A high credit score means that an individual has been efficient in repaying their loans and credit card dues on time. A high score also indicates that the borrower has a consistent source of income. If you have a good credit score, it increases your eligibility for LAP, and sometimes the lender might reduce the interest rate on the loan amount as well.

2. Property Valuation

The loan amount sanctioned by the lender depends primarily on the value of the property you mortgage. It is essential to ensure that the value of the property is equal to or higher than the loan amount you seek. You can consult a few property valuers to evaluate the property’s market value. Choosing a reputed valuer will help you get a fair value for the property, which can then be used to increase your loan against property eligibility.

3. Steady Income

Steady income plays a crucial role in determining the eligibility for LAP. A regular and steady income assures the lender that the borrower has the capability to repay the loan. Hence, it is important to have a stable job or a regular source of income to be eligible for LAP. Additionally, if the borrower has a higher income, the loan amount sanctioned by the lender will also be higher.

4. Lower the Existing Debt

If you have taken other loans or have a high credit card bill outstanding, it may decrease your LAP eligibility. It is suggested to pay off your existing debts before applying for LAP, as it will increase your repayment capacity. The lower your ongoing debt, the higher your eligibility will be. This will also help reduce your debt-to-income ratio, which lenders usually consider when determining LAP eligibility.

5. Include Spouse as Co-Applicant

If the property is jointly owned by you and your spouse, consider including your spouse as a co-applicant for loan against property. Including the spouse as a co-applicant for LAP can increase the loan eligibility as the lender can consider the spouse's income as well. However, it is important to note that the co-applicant should also have a good credit score and a steady source of income to improve the loan against property eligibility.

6. Age of the Borrower

The borrower's age is a crucial factor that affects loan against property eligibility. Lenders generally have an upper age limit for borrowers, and the age limit may vary depending on the lending institution's policies. In most cases, the age limit is set at the age of retirement (58-60 years). Hence, it is important to apply for LAP before approaching that age bracket to improve the eligibility.

7. Paperwork

The paperwork involved in LAP can be quite extensive. To ensure a quick loan disbursement process, ensure that you have all the required documents in place. The documents required generally include identity proof, address proof, property documents, bank statements, etc. Submitting accurate documents reduces the possibility of the loan application getting rejected, hence improving the loan against property eligibility.

In conclusion, increasing your loan against property eligibility is not an overnight process. It requires good financial planning, ensuring that the property is valued correctly, and maintaining a good credit score along with steady income. To ensure the maximum benefit from LAP, it is important to research thoroughly and understand the terms and conditions of the loan before applying. With these tips, you can significantly increase your LAP eligibility, making it easier for you to get the desired loan amount.