Loan Against Property without Income Proof and ITR

A loan against property (LAP) is self-explanatory. It is a kind of loan that can be obtained against a property you own. The property against which you wish to take a loan can either be residential or commercial or just a plot. However, it should be registered in your name. If you have a self-owned property, you can approach lenders for a loan against your property.

The lender will assess your property’s market value before sanctioning the loan amount. If the title of the property is clear, the lender can approve up to 90% of the market value of the property as a loan amount which can be used for any purpose like education, expanding your business, studying abroad, medical treatments, taking a vacation, and so on.

Additional Info: You can also Check Loan Against Property EMI Calculator

Most of the lenders in India will ask you to submit income proof even if you provide your property documents as collateral. This is done to make sure that you will be able to pay off the borrowed amount to them. However, in some cases, applicants don’t have income proof.

For example, unemployed or freelancers may not have any income proof. In such cases too, some lenders may offer loan against property without any income proof to the applicants based on their income source, property’s value, and other factors

ITR is one of the crucial documents required to apply for a loan against property. If you cannot furnish any documents (including ITR) deemed necessary by the lender for LAP, your loan application might get rejected. 

ITR (Income Tax Return) is a form in which taxpayers provide information regarding their income and applicable taxes to the Income Tax Department. ITR is important for availing of a LAP. However, if your loan requirement is not too high, some private lenders and Non-Banking Financial Companies (NBFCs) may offer loan against property without ITR.

If you are an unemployed person or a freelance at the time of application and cannot furnish income proof, you can follow the tips mentioned below to get a lap without income proof:

Additional Info: You can also avail SBI Loan Against Property

• Talk to Your Relationship Manager: If you’re holding a savings account with any bank, the bank will assign a relationship manager to you, who will be your point of contact for all your queries. In case you do not have a relationship manager, you can just walk into your bank branch and ask the staff to connect you to the right person. Try assuring that person that you will make your payments without a miss and ask them if they can provide you with a LAP without income proof document or ITR.
• Apply with a Co-Applicant: If your spouse, parent, sibling or any other family member has a strong credit history and a regular source of income, you can add them as a loan co-applicant. Doing this will increase your chances of getting loan approval.
• Explain Your Income: Before loan approval or rejection of your loan application, the lender will send an officer to your property for inspection. During that time, you can explain your income source properly. For example, if you run a business or can pledge a commercial property, then provide accurate income information to the concerned officer. Also, tell the officer about not having an income proof or ITR. The officer will keep that information in mind when calculating your annual income and judging your repayment capacity.
• Provide Explanation for Not Having an Income Proof: If you have not filed your ITR for the previous year, explain the genuine reason to the officer. Also, it is recommended to consult a tax consultant and file your taxes for the current year.
• Check Your Savings Bank Account: While approving a LAP application, the lender will look at your banking transactions to check your spending habits. If you have good banking history and have maintained sufficient funds in your account regularly, the chances of loan approval also increase. Your average bank account balance should be twice your proposed EMI. You can use the online loan against property calculator to calculate your LAP EMI. 
• Choose Lower LTV: LTV (Loan to Value) is the percentage of the loan that the lender will provide. For example, if the lender is offering 90% LTV, the borrower has to pay the 10% margin from their own pocket while the 90% is funded by the lender. If you don’t have income proof or ITR, you can request the lending bank to offer you a lower LTV. However, you must understand that choosing a lower LTV means you will have to pay the remaining amount from your pocket.
• Consider P2P Lending Options: Peer-to-Peer (P2P) lending has become increasingly popular nowadays. Funds are raised through crowd-funding in P2P platforms and are disbursed to the eligible borrowers at a slightly higher interest rate as the risk factor is high under P2P lending. If you don’t have valid income proof, P2P lending could be an option.

Additional Info: You can also avail HDFC Loan Against Property

Following are some common documents required to apply for a loan against property without income proof and ITR:

• Application form - duly filled in & signed
• Passport size photographs
• Identity proof
• Address proof
• Bank statement of last 6 months
• Processing fee cheque

You can apply for a loan against property without income proof in SBI Bank or with other lenders easily by following the steps mentioned below:

• Visit the official website of MyMoneyMantra.
• Under the ‘Loans’ section, click on the ‘Loan Against Property’ option.
• Click on ‘Compare and Apply’ and fill in the detailed application form.
• Submit your income, personal, property, and contact information.
• Enter the OTP received on your mobile.
• Submit your application.
• Our representatives will get in touch with you to complete the application process.