Loan against property is one of the fastest-growing segments in terms of long-term credits in the Indian financial market. The growth figure pegged at 33% and is expected to surge even higher in the coming years.
Such a rise in the demand for advances can be directly linked to the affordability and easy availability of loans offered by various financial institutions. Unfortunately, a considerable number of the country’s populace are unable to enjoy the benefits of such credit facilities because they do not work in the organised sector and do not hold any proof of income.
A recent survey shows that a considerable number of people in India do not use any financial institution and do not hold income proofs like Income Tax Returns as they earn below the minimum threshold. Hence to extend finances to them, various lenders have come up with loan against property without ITR.
Though an Income Tax Return or proof of income is essential in determining one’s repayment capacity, you can present certain other documents to avail a loan against property.
Tips To Avail A Secure Loan Against Property Without Any Proof Of Income:
Most financial institutions ask for income proof to ensure you have the necessary repayment capability. In case you do not hold an income proof for which the below-mentioned tips could help you avail the loan against property easily.
- Show your appointment letter- Offer letter or appointment letter is a good alternative to conventional income proof as these help determine one’s income.
- Add a co-borrower- You can also opt to apply with a member of your family who has a regular income and a decent credit score. It will reduce the risk of lending; if one co-signer fails to repay the debt, the other individual will be liable to repay the total amount.
It will also increase the repayment capability by a significant margin. Lenders are likely to appreciate such assurances and be more willing to extend you the desired amount. It will also reduce the burden of paying the associated charges of your loan against property.
Applying with an earning member from your family will help you to receive a faster approval of your loan.
- Bank statement- A bank statement can act as one of the most crucial proof of income in case you do not have any other proof of income to show to your lender. The statement is a document that holds the records of all the transactions made in your account.
Make sure to present the same bank statement where your company deposits your salary or you receive the payments if you are self-employed. The statement will show both income and expenditures, allowing lenders to determine the obligations you are liable to pay as well.
Some financial institutions also require bank statement as a document needed to apply for a loan against property.
- Lower loan to value ratio- A lower loan to value or LTV ratio is usually preferred by lenders. This ratio is the amount of funds disbursed with respect to the value of the property against which you are availing the mortgage loan.
A lower LTV ratio will incur lower lending risk as well as lessen the interest rate for borrowers. When you do not have an ITR, you can request a lower loan amount so that you can repay your loan EMIs with ease.
There are several financial institutions, including NBFCs like Bajaj Finserv, that provides loan against property without ITR to individuals at a lower LTV.
They also provide you pre-approved offers in order to make the application process of availing loans easier and faster. These pre-approved offers are also available on other financial products such as home loans, business loans, personal loans, etc. You can take a look at your pre-approved offer by providing only some essential details like your name and contact number.
Additional Read: How can I get 100% Loan Against Property?
Following the above-mentioned tips will help you avail a loan against property without ITR. It will help you collect the necessary financial backing to tackle unforeseen monetary shortcomings with ease and repay the debt without straining your finances.