A Step-by-Step Guide to Securing a Loan against Property in Hyderabad

Hyderabad, Telangana's capital, is the country's fifth-largest urban economy, covering more than 250 square miles on the Deccan Plateau. The Reserve Bank of India (RBI) has ranked Hyderabad as the fourth-largest credit centre in India.

An asset can be used as security to get funds in Hyderabad, such as a house, a commercial property, or a real estate site. A Loan against property in Hyderabad will help you put your financial worries to rest if you don't have enough money to cover emergencies or urgent expenses.

But how do you secure a loan against property in Hyderabad? Here's a step-by-step guide on the procedure for a loan against property in Hyderabad:

What is a Loan against Property (LAP)?

When you mortgage your own home or commercial property, you can apply for a loan against the property. In this case, the borrower's existing property acts as the main security for getting the loan, whereas other forms of loans ask for guarantors to vouch for the applicants.

The lender independently evaluates the property's current market worth before accepting a commitment. They do this by sending an appraiser to evaluate the property, who also takes additional factors like its age into account. 

After a valuation is carried out, a fixed proportion of the property's market value is used to calculate the loan amount. The most important requirement is that the asset should not have been used as a security for any other reason. After home loans, it is among the least expensive retail loans.

Step-by-step guide to secure a loan against property in Hyderabad

Getting a loan against property in Hyderabad is very simple, and you can easily navigate the process smoothly by following the given steps: 

1. Completing the application form

Whether online or offline, the initial step involves completing the application form. For offline submissions, visit the nearest financial institution office with the necessary documents, fill out a paper application, and submit it. 

You can also apply online. Give accurate details about your current employment and the property pledged as security in the official website. These will be verified in the following steps to confirm your eligibility.

2. Document submissions

Attach relevant documents that prove the details provided in the application. Common documents include:

• Proof of identity (Passport, Voter ID, Aadhaar card, Driving license, or PAN card).
• Proof of residence (Ration card, Rental agreement, Utility bills).
• Proof of age (usually covered by identity cards).
• Proof of income for salaried individuals (recent payslips, IT returns, employment certificate).
• Proof of income for self-employed individuals (IT returns, company account statement, business address proof).
• Property documents (title deeds, non-encumbrance certificate, encumbrance certificate, land tax payment receipt).

3. Detail confirmation and document verification

After submitting your details and proofs, the financial institution will reach out through call, email, or SMS to confirm the information provided. This stage may involve questions related to your application. Also, your credit score or CIBIL score will be assessed. Once the institution gets a satisfactory response, you will be given the approval to proceed.

Once documents are submitted, wait for technical verification by the financial institution. The lender cross-checks the information from your application with the documents presented. This verification may involve a personal appearance or a visit by a representative to your residence or office. After a satisfactory validation process, the lender issues an official sanction letter approving your loan request.

4. Legal review and property valuation

If you accept the loan offer, the lender proceeds to legal verification. Your documents are sent to their legal team for validation. Legal experts scrutinize property-related documents to ensure there are no legal disputes. A detailed report is then submitted to the lender. 

After getting the legal report, the loan approval department proceeds with disbursing the loan amount, which is calculated based on the market value of the property. Many lending agencies efficiently complete this process in a few days, with funds directly transferred to your bank account.

What factors to consider while applying for a loan against property 

A valuable item must be pledged as collateral by definition of a loan against property. Also, for a certain period of years, one must set aside a significant amount of their income to repay the debt. So, taking out a property loan is a big financial choice. Before applying for a loan against property, keep the following in mind: 

• Compare various loan programs

Study other lenders' LAP programs, applicable interest rates, and any extra expenses like processing charges, servicing charges, or foreclosure fees. Study client testimonials and internet evaluations. Next, evaluate each plan using an EMI Calculator for loans secured by real estate to figure out your monthly payment before selecting the best offer.

• Understand the market value of the pledged property.

Both your eligibility and the market value of the property will influence how much you can borrow. Applying within this range improves your chances of getting approved for a loan more quickly and at a cheaper interest rate. To verify the property's current evaluation and guarantee an equal financing arrangement, you can also have the property inspected by professionals. 

• Check the eligibility

Different lenders have different requirements for qualifying for home loans. Try to check if you match the parameters by carefully considering them. Check over the list of necessary documents and have them on hand as well.

Eligibility for loan against property in Hyderabad

Here are the common eligibility that most of the financial institutions and banks will look into:

• Indian citizen
• Self-employed and salaried workers both are qualified
• On average, 25 years old is the minimum age, and it may vary according to the institution (18 years for non-financial property owners).
• 85 years is the maximum age (Varies according to the institution) (including non-financial property owners).
• 700 CIBIL score and above (Varies according to the different institution)