Tips To Avail Loan Against Property Without Income Proof

When a person applies for a loan, there is always some risk involved for the lender. To deal with that potential risk, lenders first scrutinise all the information provided by the borrower, including evidence of income, identity proof, income tax return, and other details. It is a kind of jaw-dropping task for many loan applicants to present correct income proofs, thus it makes the loan approval process a challenging task. As the name suggests, a loan against property is secured with some or other collateral or taken against your property. But there are times when these proofs are missing, so, in this blog, you will understand how one can apply for a loan against property without income proof.

What is Loan Against Property?

To borrow funds from a lender, the loan applicant makes use of his residential or commercial property as collateral for security purposes. In case of any default, the lender possesses the right to recover funds against the collateral as per the terms and conditions. Before providing a loan to the borrower, the lender calculates the market value of the property used as collateral. Approximately, up to 80% of the collateral’s market value can be borrowed from the lender.

Key Points To Obtain Loan Against Property Without Income Proof

Before approving a loan application, every financial institution requires income evidence to avoid any forthcoming risks when it comes to loan repayment. However, when it comes to employment, many people work as freelancers or might be paid in cash when they don’t have any proof of specific income. Because of the lack of a permanent source of income, applicants lack evidence of income proof for loan approval. In such situations, the following aspects can be done:

• Leverage informal income proof- When you don’t have formal income proof you can use bank statements that can serve as a testament of your financial stability with your cash flow activity.

• Consider Kachcha income proof- Lenders may consider affidavits or self-declarations as your income source, rental income, or invoices as proof of income to avail loan against property.

• Monitor your bank account- Lenders will scrutinise your banking behaviour if you apply for a loan against property without income proof. If you have decent banking practices you can avail loans without income proof.

• Use a co-applicant—To boost your loan application, you can use a co-applicant who agrees to pay off the loan amount in your absence. The co-applicant’s creditworthiness and income can increase the chance of getting a loan against property.

• Improve credit score- A healthy credit score increases your chances of getting a loan against property. Your credit score has a direct impact on your loan application. 

Important Documents

At the time of applying for a loan against property without any income proof, you need to maintain a record of the following documents for further process to avoid any obstacles. Documents are as:-

• Identity proof issued by the government of India such as an Aadhaar card, driving license, passport, etc.

• Utility bill and bank statements for your address proof.

• Credit report to show creditworthiness and your financial stability.

• For a secured loan you need to attach the property documents to boost your financial profile.

• A bank statement showing your competence in paying back the loan amount.

Conclusion

Getting a loan against property without income proof might be challenging sometimes but with Aavas Financiers this is possible. With the help of informal income proofs and other required documents, your application might get approved for a loan against property without any formal income proof. But before you apply for a loan, make sure to keep in check your financial health, stability, ability to repay, and future goals.

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