Taking Loan Against Property without Income Proof is not rare, but it is definitely difficult. As such a Loan Against Property is a secured loan. However, most Banks / HFCs / NBFCs assess the borrower’s repayment capacity before providing mortgage loans. There are some Banks / HFCs / NBFCs which provides loan by calculating the borrower’s raw income, rental income, co-applicant’s income, freelance income, cattle income, pension income, part time job income etc.
What is Loan Against Property ?
Loan Against Property is a secured loan in which the borrower takes a loan by placing his residential, commercial or industrial property with the lender as collateral. Since the funds in Loan Against Property come without any end use restrictions, borrowers can use the funds for various purposes like business expansion, medical treatment, marriage, child’s education etc.
How to Avail a Loan Against Property without Income Proof ?
When a person apply for a Loan Against Property, the Banks / HFCs / NBFCs will assess the market value of the property. Based on the market value, the loan amount will be decided by the Banks / HFCs / NBFCs.
Income proof is essential to determine the repayment capacity of the borrower. If the applicant lack a stable source of income, availing a loan can be difficult. Income is an important parameter for deciding the amount of loan that can be sanctioned to the borrower. Income documents are checked to access the creditworthiness of the borrower.
While a person need to keep his property as collateral to avail loan, most Banks / HFCs / NBFCs will ask him to submit income proof. This can be difficult if applicant is freelancer or unemployed.
To avail Loan Against Property without Income Proof, you may need to fulfill other requirements. As a borrower, you can use different methods to avail a Loan Against Property without Income Proof. Following are the methods that can help you in attaining a mortgage loan :-
1. Add A Co-Applicant
If you have a family member with a valid credit history and a regular income, consider adding them as a co-applicant. Adding a co-applicant will increase the chances of your loan getting approved.
2. Check Your Banking Activities
Before applying for a loan, always have a glimpse of your savings bank account activities as lending institution tend to scrutinize the bank statements. A borrower must maintain the minimum balance amount or have sufficient funds. Sound banking activities increase the chances of availing a loan.
3. Justify Why You Do Not Have The Necessary Documents
Filing ITR is very important. If you haven’t filed it for the previous year, please explain the reason genuinely to the credit / relationship officer. Also, to be on the safer side, consult a tax consultant right away and file your taxes for the current year.
4. Choose Lower Loan to Value
Loan to Value(LTV) indicates the percentage of the loan that the bank will lend. For example, if the LTV is 90%, the borrower has to pay the remaining 10% while 90% is funded by the bank. If you do not have income proof or ITR, try requesting the Bank / HFC / NBFC to offer you a lower LTV and increase the chances of approval. Do not forget that in choosing lower LTV, you will land up shelling the remaining from your pocket.
5. Explain Your Income Clearly to Credit Officer
Before approving or rejecting your loan application, a Credit Officer of the Bank/HFC/NBFC will visit the property and source of income for inspection. At this time, if you run a business or planning to pledge a commercial property, it is very important to explain your income details to the concerned officer. Also, let the officer know that you do not have income proof or ITR. The officer will take into account all the information provided by you when calculating your annual income and repayment capacity.
6. Consider Opting for Peer-to-Peer Lending
In the age of digitization and consumerism, Peer-to-peer lending is increasingly popular. In a P2P platform, funds are raised through crowd-funding, where a group of people raise money for a common goal. You may be charged a high interest rate based on the risk factor under P2P lending. Such fin-tech platforms offer quicker loans without much emphasis on income documents. However, you should be careful about the terms and other hidden charges levied on such platforms. If you do not have valid income proof or ITR information, this could be an option.
Loan Against Property without ITR
Getting a Loan Against Property without ITR or Income Proof is an uphill task. It requires a lot of convincing, explaining, and patience. The financial industry is booming day by day and loans are available for all types of customers. Doing research online or offline and talking to different lenders offering loan against property and comparing their offers can help you to get a better deal. Check your loan against property eligibility before applying for a loan. This way, you can negotiate better.
Documents Required for Applying A Loan Against Property without Income Proof or ITR
Main Applicant
- Photo
- Pan Card Copy
- Aadhar Copy
- Current Residence Proof
- Last One Year Bank Statement
- Processing Fee Cheque
- Property Documents
Co-Applicant
- Photo
- Pan Card Copy
- Aadhar Copy
- Current Residence Proof
- Relationship Proof with Main Applicant
- Supporting Income Proof (If Available)
