Availing a loan against property is one of the best ways to get the funds for immediate financial needs – be it business expansion or wedding expense. In India, anyone can get LAP (loan against property), read on to know more about LAP for self-employed professionals.
In India, several lenders offer loan against property. It is one of the best and quickest ways to get funds for immediate financial needs. No matter, if you want funds for expanding your business, paying your child’s education, you can apply for LAP. Being a secured loan, the lenders provide LAP to everyone – be it a salaried employee or a self-employed professional, as long as they provide collateral and prove their repayment capacity. American Sign Letters.
One of the best things about LAP is that you can provide a self-owned residential or commercial property as security for the loan.Typically, the lenders in India provide about 40 to 60% of the value of the property you pledge as loan. So, depending on the amount you need, you must provide the collateral accordingly. Another advantage of the LAP is that even though you pledge the asset, the ownership remains with you as long as you repay the loan on time. Only if you default on the repayment, the lender will take over the property; they reserve the right to auction the property to recover the amount.
Just like any other types of loan, the eligibility requirements for loan against property varies based on your profession. So, if you are a self-employed professional, the lender may require you to provide a specific set of documents and meet the eligibility criteria, which are listed below:
- You must be a citizen of India
- You must be aged between 25 and 70 years
- You must have a regular source of income
Documents required
Application form (duly filled and signed) along with a photograph attached to it
KYC (know your customer) form
Proof identity (you can submit any one of these documents)
- Voter ID card
- Aadhaar card
- PAN card
- Driving license
- Photo identity card issued by any government body
- Valid Passport
Proof of residence (you can submit any one of these documents)
- Aadhaar card
- Rent agreement of a stamp paper
- bank statement reflecting the address of the business/residence
- Latest utility bills
- Municipal tax bill receipt
- Passport
Proof of income (the requirement may vary from lender to lender, but generally you must provide the following documents)
- Copy of IT returns filed for the last two financial years
- Copy of balance sheet and the profit and loss statement duly certified and audited
- Copy of the current bank statement for the last six months
Proof of business existence
- Copy of licences/certificate that authorises to engage in the occupation
- Shop and establishment certificate
- Registration certificate
- Sales tax and/or PAN card of the business establishment
- SEBI registration certificate (if applicable)
- Partnership deed or MOA (Memorandum of Association)
- Professional qualification certificate
Can a self-employed apply for a loan against property with a co-applicant?
Yes, if you are a self-employed professional, you can include a co-applicant in your LAP application. Usually, people add a co-applicant when the value of the property they pledge is insufficient to get the desired loan amount. If you have a working spouse or any family member who has a decent income, you can include them as co-applicant to boost your loan eligibility and apply for a higher loan amount. Before applying for a joint loan against property, it is advisable to check the credit score of the co-applicant; if their score is low, chances are high that your application will be rejected.
Do your research well and get the necessary documents in order before approaching a lender to complete the process faster and get the required funds.
