While applying for loans today is quicker and easier, specific eligibility criteria must still be met. While some factors, such as income, may be well known to you, there are some that you may not know about. It’s ideal to understand the factors determining your loan against property eligibility before applying for a loan. Here are six lesser-known eligibility factors that you should note:

1. Age

While it may seem that age is an irrelevant factor when it comes to your loan against property eligibility, it plays a crucial role. The younger you are, the more income-earning years you have ahead; hence, loan repayment should not be an issue. However, your loan against property eligibility may be a concern if you are closer to retirement. In such a case, you can opt for a loan against property with a shorter tenure.

2. Job History

If you frequently switch jobs, this may be an issue regarding your loan against property eligibility. This factor raises a concern about your income stability, one of the primary factors lenders look at when reviewing loan applications.

3. Credit history

Your credit history or score determines your loan against property eligibility. This tells the lender about your creditworthiness and the probability of you defaulting on your Equated Monthly Installments (EMIs). Also, if you have previously been rejected for a loan you applied for, this might impact your loan eligibility.

4. Property documents

All the documents related to the property against which you are applying for the loan need to be in place. This is because the financial institution needs to ensure that there are no issues with the property’s title and that all the documentation is complete and in order.

5. Income proof

Even if your income is more than sufficient for the loan amount you’re applying for, if you do not have the required payment proof documents, it may impact your loan against property eligibility. For instance, most lenders require your Income Tax Returns (ITRs) for the previous two to three years if you are self-employed.

6. Home loan insurance

When the property you are taking a loan against is insured, your loan eligibility increases. This is because insurance coverage lowers the risk for you and the lender. It’s important to note that the home loan insurance is relevant here, not home insurance. Home loan insurance covers the loan repayment if you cannot meet your debt obligations subject to the terms and conditions of the insurance policy.

Before you apply for a loan against property, review these factors to understand your loan eligibility better. You can also use a loan against-property calculator to help you determine your ideal loan tenure and approximate your loan EMIs.