Home Finance Top Factors That Affect Your Loan Against Property Eligibility

Top Factors That Affect Your Loan Against Property Eligibility


Loan against property is an ‘all-in-one’ loan that provides you with cash for a wide range of purposes. While some borrowers use the loan amount for settling debt, paying medical bills, or purchasing or renovating a home, others use the amount for foreign travel, wedding, or purchasing a motor vehicle. 

The loan against property application and approval process is reasonably straight-forward, meaning any residential or commercial property owner is eligible to apply for a loan. However, not every borrower gets the lowest loan against property interest rate. And, when the loan amount is massive, even a 0.5% increase in the interest rate can inflate your loan bills by thousands of rupees. 

Hence, if you wish to get the lowest loan against property interest rate, increasing the loan eligibility must be your topmost priority.

The Top-5 Factors That Affect Loan Against Property Eligibility –


The borrower’s age impacts loan against property eligibility and interest rate alike. The minimum age to avail a loan against property is usually 21, and the maximum age 60. It is easy for a borrower to choose a repayment term of twenty years when they are at a distance from the maximum age. However, a borrower’s loan against property eligibility decreases sharply when they approach 60, as they will not get the same repayment term as someone who is younger. 

Income Source, Nature, and Stability

The borrower’s income source, its nature and stability also play a prominent role in determining the loan against property eligibility. Indian lenders generally keep the EMI less than 50% of the borrower’s net monthly income. For instance, if your income is INR 40,000, the EMI must not exceed INR 20,000. Also, the nature and stability of the income determine the eligibility. For example, it may be easy for a borrower in a high-paying corporate or government job to get the lowest loan against property interest rate than someone whose income is unstable.

Credit Score

The credit score, also known as the CIBIL score, affects loan against property eligibility, indicating the borrower’s creditworthiness. If you are a disciplined borrower, your credit score will be automatically high, prompting the lender to offer you the lowest loan against property interest rate. However, if your score is low, i.e., below 750, you may have to shell out some extra amount every month until the score improves.

Property Documents and Condition

Loan against property eligibility also depends on the condition of the property and the documents. To avail a loan against property, you need to submit all documents related to the property. During the verification round, if the loan officer finds anything may not approve the loan. Additionally, your loan against property eligibility will be higher if you pledge a well-maintained property situated in a location with modern amenities.

Property Insurance

An excellent way to increase the loan against property eligibility is by getting the property that you wish to pledge insured. Home insurance protects your property from natural or human-made risks. Hence, if anything bad happens, the insurer will take over the payments from you and settle the debt. Such security enables the lender to offer you the lowest loan against property interest rate.     


Although simple, increasing the loan against property eligibility may take time. However, if you plan properly, it is not too challenging. Repay the EMIs on time and keep your loan amount low to avoid the chances of a default. You may also negotiate with the lender to get better rates.