Loan Against Property- Can A LAP Be Availed Without Income Proof?

A loan against property (LAP) is a secured loan that is sanctioned keeping an asset as a mortgage with the lender. The property mortgaged can be a personal land, a house, or any other commercial property. The lender holds the property as collateral until the entire loan amount is cleared. As a secured loan, LAP can be alternatively used as an unsecured loan as it too has no end-use restriction. The loan withdrawal amount is much higher and the tenure also longer in LAP. Loan against property interest rates is also considerably lower as compared to any unsecured loan.

LAP can also be availed for business purposes like buying machinery, procuring raw materials, acquiring new equipment, using funds for working capital, debt consolidation, etc. This type of loan can also accommodate personal requirements like weddings, higher education, home renovation, purchasing a new home, managing medical expenses, etc.

Features of Loan Against Property–

• High Loan Amount

You can get up to Rs. 1 crore if you are salaried and up to Rs. 3.5 crore if you are self-employed.

• Quick Disbursal

Your loan can be processed in 72 hours and the loan amount disbursal in 4 days.

• Convenient Repayment Tenor

The loan tenures can range from 2- 20 years for salaried individuals and 2- 18 years for self-employed.

• Minimal Documents

There are minimal Loan Against Property documentation required.

Eligibility Criteria–

There are very basic requirements to be eligible for a Loan against property and they can be easily fulfilled.

• Salaried individuals should have a minimum work experience of 3 years.
• For the self-employed, the business presence of a minimum of 5 years and ITR of 3 years is required.

Can One Avail Loan Against Property Without Income Proof Or ITR?

A 2018 study found that in India, almost 15- 20 million people in India still didn’t have a banking account, with a high probability of them not even having any authentic income proof. While some may have a stable source of income, others may be freelancers or unemployed. Often lenders allow individuals to avail loan against property (LAP) and access high-value financing, without ITR or income proof. Income proof or IT return is crucial to assess your repayment capability and minimize the risk of default.

If an individual wants to avail of a loan against property without income proof or ITR, he will have to fulfill certain documentation and meet the eligibility criteria. Apart from this, follow these recommendations to get approval with less inconvenience.

Grounds to Avail a Loan Against Property Without Income Proof–

• Apply With A Co-applicant–

If your spouse, mother, father, brother, son or unmarried daughter is a drawing a regular income or salary and has genuine income proof, you can avail of a Property Loan with them as a co-applicant.

• Provide Proper Reasoning–

You should give valid and justifiable grounds and foundation of not holding an income proof or ITR. Though you should keep in mind that filing income tax returns are extremely important, and you can talk to a tax consultant regarding this prior to going for Loan against property.

• Talk To A Professional Or Relationship Manager–

You should have a direct conversation with the approved and authorized personnel or the relationship manager and reassure them that you would be making the repayments of the loan against property without defaulting and on time.

Apart from the above-mentioned suggestions, you can also have a talk and explain to the authorized officer about your source of income. You can even maintain a bank balance, which is double the expected loan EMIs to give them reassurance.

Additional Reading – Loan Against Property: All You Need To Know

Check your maximum Loan Eligibility