A loan against property is a secured loan where a residential or business property is used as collateral. The lender evaluates your application based on your repayment capacity, property information, and documentation. Therefore, having the documents in possession is an important step that can make the application process smooth. In this article, we will look into the documents needed for a loan against property and how they help support your loan application.
Why are Documents Necessary?
Lenders check different parameters prior to approving a loan. Your identity, income, property ownership, and credit report are examined to determine your eligibility. The verification is done through supporting documents. Providing proper and complete documentation can ensure faster processing and simplify decision-making.
List of Commonly Needed Documents
While there may be some variations in requirements among various lenders, there are some documents commonly needed by lenders. The loan against property documents required can be grouped into general categories.
1. Identification and Proof of Address
These records are used to verify your identity and residential address. They are required of all applicants.
- Aadhaar card
- PAN card
- Passport or voter ID.
- Utility Bills (electricity, water, etc.)
- Driving license (as supporting document)
2. Income Proof
Lenders must determine your income to estimate your ability to repay. Depending on whether you are salaried or self-employed, the type of documents required may vary.
For salaried employees:
- Recent salary slips (typically the last 3 months)
- Form 16 or Income Tax Return (ITR)
- Bank statements (recent 6 months)
For self-employed individuals:
- Income tax returns (recent 2-3 years)
- The audited profit and loss account
- Balance sheet certified by a chartered accountant
- Business registration certificate
3. Property-Related Documents
Since the loan is collateralised by a property, lenders require proper documents to establish title and ownership.
- Sale deed or title deed
- Property tax collections
- Approved building design, where applicable.
- Occupancy certificate for constructed properties
- Lease agreement (in case of rented property)
4. Other Supporting Documents
The lenders may also require a series of other documents depending on the borrower's profile.
- Passport photos
- Signed and completed the loan application.
- Disclosure of overdue loans or obligations.
- Partnership deed or company records (for business owners)
Preparing Your Application
Make sure to check the current list of documents required by the lender before you apply. Have hard copies and scanned copies in your possession. Verify that all your documents are up to date and consistent with what you have submitted in your application. Having your documents in place can assist you in preventing delays.
Conclusion
Documentation is the most important aspect of the loan against property evaluation process. Each lender asks for a series of documents before sanctioning a loan against property. If you know the loan against property documents required, then you can prepare in advance and have a smooth application process. Always check the latest checklist with your preferred lender, such as Tata Capital, before applying.
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