Is it Possible to Get Loan Against Property without Income Proof (ITR)?

You think that your financial planning will be able to tide you across all eventualities in life. Perhaps not.

There could be many reasons why this may not always be a full-proof plan. You may have just started saving and investing, so the corpus that you have may not be enough.

Or perhaps you have a lot of investments that are a while away from maturity. Unlocking them prior to their maturity date may result in a significant loss of income.

So, what happens if you have a financial crisis? Using your savings or liquidating your investments could be an option, but you would end up losing on your retirement corpus. A personal loan could help, but these loans can be obtained only upto a maximum of INR 25 lakhs, depending on your eligibility. These loans will have to be repaid within 5 years, which means that if you need a larger amount, you may either get insufficient funds, or get stuck with a huge EMI, or both.

In such cases, leveraging your assets such as a residential or commercial property could help you get a loan against property.

What is a Loan Against Property?

A loan against property is a common route to help fund business and personal expenses. The borrower is required to pledge the property, which can be residential, commercial or even a plot of land owned by the borrower to the lender as collateral or security against the loan amount requested.

Is It Possible to Avail a Loan Against Property Without Income Proof?

Despite being in possession of all relevant property documents, most lenders in India will not approve a lap without income proof.

This can be an issue with individuals who do not fall into the income tax category or are unemployed and therefore may not have an income tax file at all.

Since it is not possible to get a loan against property without itr, it is advisable to file your income tax returns at the earliest, for at least the past 2 years.

If you have managed to meet the eligibility criteria, you need to check the list of documents for loan against property. For most lenders, including Grihashakti, the basic list will include the following:

• PAN
• Identity proof
• Address proof
• Income proof
• Income Tax returns (ITR) of the past 2 years
• Last 6 months’ bank statement

How Can You Avail a Loan Against Property Without Income Proof?

Needless to say, getting a mortgage loan against property without income proof will be a herculean task. Follow these tips that may be able to help you get the funds you need without ITR.

Tip 1 - Apply for a Personal Loan: You can apply for a personal loan. Depending on your eligibility, you can get upto INR 25 lakhs. Please note that to be eligible for a personal loan, you will have to be salaried or self employed and meet the lender’s personal loan eligibility criteria. Most lenders require income proof for sanctioning such loans, such as salary slips of the past 2-3 months.

Tip 2 - Add A Co-Applicant: If you do have an income tax return file, then you may consider taking on a co-applicant with you on the LAP application. This person must be a close family member who co-owns the property, and has a stable income with a good credit score. Since this person has the complete documentation, they must be made the primary applicant with you as the co-applicant.

Please note that most lenders require co-applicants to also provide basic documentation such as PAN and income proof.

Tip 3 - File your ITR: If you are salaried, the best way to overcome this issue is to file your ITR for the past 2 years. Take the help of a CA or financial expert so that you can be confident of your filing. It is also important to pay off any additional taxes that may be applicable after filing the ITR. After this process is completed, you can proceed to apply for a loan against property.

Tip 4 - Substantiate Why You Do Not Have the ITR Documents: It is important to file your ITR every year even if you fall in the zero tax bracket. ITR is not just important to get credit from lenders but may be required for other purposes too. For example, if you wish to travel abroad, many countries ask for your ITRs when you apply for a visa.

If you do not come under any tax bracket, explain to your lender why you do not have an ITR file. Also, have a word with your chartered accountant or tax consultant to file the ITR for the past 2 years.

Tip 5 - Check Your Savings Bank Account: As part of assessing your creditworthiness, your lending partner will review your past banking habits. This will include taking a look at your bank account to check if you have always maintained funds well over the defined minimum threshold.

If your bank balance is double the proposed monthly installment on your loan against property, chances are that your lap without income proof may just be approved. Please note that this is a very slim chance, and even if you get the loan, you may not get favorable terms.

Must Read : Beginners Guide To Loan Against Property

In Conclusion

It will be very difficult to get your loan against property without itr sanctioned from any reputed lender in India at favorable terms. Lenders like SMFG Grihashakti only consider applicants who have complete documentation.

If you have any questions about applying for your loan against property, simply call our customer service team on our toll free number 1800 102 1003 or email us at grihashakti@grihashakti.com. You can also visit your nearest SMFG Grihashakti branch for a face to face discussion.

Must Read : Know How to Avail Education Loan on Property