A loan secured by property put as collateral, commonly known as a loan against property (LAP), often comes to the rescue for those who have a property to pledge and are in need of big-ticket funds.
But even though this is a secured loan, there can be numerous reasons for rejection of your application even after finalizing optimum EMI through Loan Against Property EMI Calculator.
So let us now have a look at them below.
Property not appropriate as collateral: The issue with the property not being appropriate is one of the primary factors that contribute to the rejection of a loan against property even if your repayment capacity as per the SBI Loan Against Property EMI Calculator pictured an affordable EMI amount. There is a good chance that the majority of institutions will not accept loan against property applications for unoccupied plots. This is due to the fact that the hazards associated with situations like these are significantly larger. The age of the property is the next primary factor that contributes to an application for a loan against property is denied.
Lenders will perceive any property with construction that is more than 20 years old as high risk because of the increased likelihood of default. This is due to the possibility that numerous properties of this type will sustain various structural issues in the future. Therefore, before you apply for a loan against property, you should confirm that the structure of the property has been renovated to the lender’s satisfaction about the property’s level of safety.
Lack of timely completion of property documents: When applying for a loan against property after using the Loan Against Property EMI Calculator, having incomplete property paperwork might be a serious obstacle for the applicant. Lenders require all of the necessary documents associated with property ownership, such as the whole chain of title, mutation certificate, property tax receipts, and so on. It gives them the ability to check the ownership of the property and find out whether there are any legal complications associated with the transaction. It is possible that your application for a loan will be denied if you are unable to present the necessary documentation when requested. Make sure you have all of the necessary property paperwork on hand to prevent having your application declined.
Insufficient income: Lenders have stringent conditions that must be met with regard to the applicants’ yearly and monthly incomes. As you can see from the Loan Against Property EMI Calculator, the EMI amount as per your tenure, loan amount, and interest rate will have to be paid from your monthly income. Since monthly instalments on loans against property are typically for large sums due to higher loan amounts, it becomes vital to have sufficient income. Web Hosting Services
It is possible that the application for the loan will be denied if the applicant’s income does not satisfy the requirements set forth by the lending institution. For instance, if you want to get a loan against your home, the financial institution will demand you to provide basic documents like a ration card, a telephone bill, an electricity bill, a voter identification card, an employer’s card, and so on. In addition to these other essential documents, we also look at proof of your income, such as your most recent pay stubs, employer’s card, and form 16, among other things. The financial institution will decide whether or not to accept your application based on the evidence that you have provided on your income. Also, remember that lenders may estimate your EMI amount on the SBI LAP EMI calculator after getting details about your income, loan amount, tenure etc.
Not qualified for eligibility criteria: Another common cause for a loan against property application to be denied is the borrower’s failure to comply with the qualifying restrictions outlined by the lender. Lenders are typically very picky about this aspect, and it is expected from applicants that they will comply with them in every detail. For instance, in order to submit an application for a loan against property with SBI, it is better to utilize the SBI LAP EMI calculator to know the right EMI for which you should apply for the LAP.
Lack of work stability- Even if you are overjoyed to see an affordable EMI amount on checking the Loan Against Property EMI Calculator, hold on and read this.
Lenders want you to have a stable income stream because this significantly minimises the danger that you will fail on your loan. Your claim for LAP benefits may be denied if you have a history of regularly switching employment with no discernible cause for doing so. In the case of salary, most lenders require that you have a minimum of three years of experience, with at least one year spent working for the employer you’re now with. When it comes to people who are self-employed, the business in question needs to have been profitable for the preceding three years.
Low credit score: In order to qualify for a loan against property after using an online Loan Against Property EMI Calculator, the lenders will demand you to have a solid credit score. This is consistent with the requirements of all other credit alternatives. For the option of getting a loan secured by your property to be available to you, you will need to have a credit score that is at least 750. Therefore, you should make it a habit to keep a careful eye on your credit score and check it frequently to ensure that it continues to be higher than the minimum standard. It is possible to accomplish this by checking your credit report on a regular basis, locating any errors that may be present, and ensuring that it is continually updated.
Technical or legal problems: The next cause for the refusal of a loan against property is that there are problems with the property on a legal or technical level. Yes, this can happen despite your repayment capacity being strong after checking the expected EMI on Loan Against Property EMI Calculator or SBI LAP EMI calculator.
For instance, the lenders tend to have a relatively short list of regions covered by them. ISO, it is possible that your application will be denied if any of the properties you mention are located in the areas that have been banned or un-serviced or disputed.
