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loan against property for pensioners

What Are the Procedures to Get a Loan for Pensioners?

Senior citizens may often find themselves in need of immediate funds to meet a financial crisis. A loan against property can be suitable for pensioners to fund their expenses. Borrowers can use the loan amount to support their medical costs, living expenses, children’s education or any other expense without restrictions. 

This credit facility allows senior citizens to remain financially independent even after retirement. In this article, we will talk about this credit facility in detail. 

How to get a loan against property for pensioners?

A loan against property for pensioners or LAP is a credit instrument where the borrower needs to keep an immovable asset as collateral and obtain a sizable loan amount. Once lenders approve their applications, borrowers can use the loan amount to fund any expense without any obligation and restrictions.

Here are the steps to avail a loan against property for pensioners:

Know the eligibility criteria to opt for a loan against property 

Candidates can enjoy the benefits of this credit facility, such as low property loan interest rates, tax exemptions, etc., if they meet the following eligibility criteria for a LAP:

  • A willing borrower should at least be 21 years old and not more than 65 years. However, the age factor may vary from lender to lender. 
  • Individuals can submit a joint application to opt for a LAP. In such a case, the total combined income of all the applicants will decide the eligibility.
  • Both self-employed and salaried individuals can opt for a LAP and have to show proof of a steady source of income. 
  • Individuals can also keep their leasehold property as collateral. However, in this case, the property must be free from encumbrance. 
  • The property’s market value must be more than the amount the borrower is seeking. 
  • A candidate should own a commercial, industrial or residential property in his/her name. 
  • Willing borrowers must have a CIBIL score of more than 750, which will ensure them to be a low-risk applicant. 
  • Candidates need to provide the proof of status of the property (self-occupied or vacant). 

Check the documents required 

Willing borrowers need to produce the documents required for loan against property to reap the benefits of this credit facility: 

  • Completely filled up application form along with candidate’s recent photo
  • Identity proof or KYC documents, such as Pan card, Aadhar card, Voter ID, Driving license, or Passport 
  • Address proof, such as bank passbook, electricity bill, telephone bill, ration card, or rental agreement 
  • Financial documents like bank statements, ITR/ Form 16, salary slips, etc. 
  • Valid documents of the mortgaged property 
  • IMD or Initial Money Deposit cheque for the application procedure 
  • Any other document as asked by the lender 

After submitting all the documents, the lender checks them and disburses the loan at a low property loan interest rate within the shortest turnaround time.

What are the benefits of a loan against property?

Besides low mortgage loan rates of interest, some of the other advantages of a loan against property are as follows: 

  • This loan is free from end-to-end restrictions. Hence, candidates can use the obtained amount to fund personal or professional expenses.  
  • Borrowers can avail of tax benefits on the interest paid under Section 24(b) and 37(1) of the Income Tax Act. 
  • The loan against property EMI calculator offered by several lending partners allows you to know your monthly installments as per the LAP interest rates charged by the lender, beforehand and plan your expenses accordingly. 
  • Financial institutions approve this loan within a short turnaround time as they can easily recover the unpaid dues from the mortgaged property.

Read Also: Know Why Mortgage Loan Interest Rate Differs for Salaried and Self-Employed Individuals

Further, several financial institutions in India, such as Bajaj Finserv, provide pre-approved offers for their financial products, such as loans against property, housing loans, etc. These exclusive offers fasten the approval procedure and ensure a smooth disbursal of the loan. To check the pre-approved offers, customers need to enter their names and mobile numbers in the required section of their preferred lender’s website. To sum up, a LAP is indeed a suitable loan for pensioners. However, irrespective of age, one should always plan their finances before applying for credit. This will help them avoid any financial burden throughout the repayment term.