A loan against property (LAP) provides a convenient way to fund substantial expenses such as medical emergencies, higher education, business expansion, debt consolidation among other financial needs. However, to benefit from this financial service, it’s crucial to meet the loan against property eligibility criteria. Prospective borrowers often make mistakes when checking their eligibility for a LAP. 

In this article, we will delve into the four common mistakes you should steer clear of when evaluating your loan against property eligibility.

Mistake 1: Ignoring Credit History

One of the major factors that lenders assess while determining the loan against property eligibility is your credit history. Lenders need assurance that you are capable of repaying the borrowed amount. They often rely on credit scores and credit reports to gauge users’ repayment capacity.

Many borrowers tend to overlook their credit scores, making the grave mistake of believing it won’t impact their eligibility. However, a poor credit history could reduce the chances of your LAP application getting approved or even lead to higher interest rates. Therefore, before you apply for a loan against property, ensure you have a healthy credit score. Make it a habit of clearing your bills on time and maintaining balanced credit utilisation.

Mistake 2: Neglecting Income Validation

To confirm your loan repayment capacity and determine your loan against property eligibility, lenders will need proof of stable income. Ignoring the importance of regular income documentation is a common mistake committed by potential borrowers. Remember, irregular or undocumented income might hinder your chances of attaining a loan. Thus, it is crucial to maintain steady income records and present them to the lender to support your ability to repay the loan on time.

Mistake 3: Providing Incorrect Property Documents

When you apply for a loan against property, the concerned property’s legal documents are of prime importance since the loan amount primarily depends on the property’s market value. Furnishing incorrect or incomplete property documents can drastically reduce your chances of loan approval. It is hence essential to ensure that all submitted property documents are genuine, complete, and up-to-date.

Mistake 4: Overlooking Loan-to-Value Ratio

Loan-to-Value (LTV) ratio is another critical factor that influences your loan against property eligibility. The LTV ratio is the proportion of the property’s market value that you can borrow. Generally, lenders provide a loan amount of up to 60% to 90% of the property’s market value. Borrowers often overlook the LTV ratio, which can lead to unrealistic expectations regarding the loan amount.

To apply for a loan against property, it’s recommended to have a clear understanding of the LTV ratio and its implications. This will not only help you know how much you can borrow but also plan your finances more efficiently.

Use Bajaj Finserv App for Loan Against Property 

Securing a loan against property  is now hassle-free with the Bajaj Finserv app. Its intuitive interface facilitates swift property evaluations, eligibility checks, and transparent repayment options. Users benefit from instant updates and guidance, empowering them to maximize property assets efficiently and make informed financial decisions.


Checking your loan against property eligibility shouldn’t be taken lightly. Avoiding the above enumerated mistakes can increase your chances of loan approval, and get you favourable terms and rates. Keep in mind that maintaining a good credit score, validating your income, providing correct property documents, and understanding the Loan-to-Value ratio can significantly smooth the loan application process. Take time to perform a thorough eligibility check before proceeding to apply for a loan against property. This way, you will be better prepared to tackle any possible hurdles, making your journey to securing a loan highly effective and less stressful.