Loan Against Property Online
This blog explores the possibility of getting a loan against property online for CIBIL defaulters, how it works, and what alternatives you can consider.
What is a Loan Against Property?
A Loan Against Property is a type of secured loan where you pledge your residential or commercial property as collateral to obtain funds. Since the lender has the security of your property, the interest rates tend to be lower than unsecured loans, and the repayment tenure can be longer—typically up to 15-20 years.
Can CIBIL Defaulters Get a Loan Against Property?
The short answer: Yes, it is possible—but with conditions.
While a low CIBIL score (typically below 600) is a red flag for most lenders, some financial institutions and NBFCs (Non-Banking Financial Companies) may still consider offering you a loan against your property, especially if:
- The property has a high market value.
- You have a stable source of income.
- The loan amount is significantly lower than the property’s worth.
- You agree to higher interest rates or stricter terms.
Why Lenders May Still Approve LAP for CIBIL Defaulters
Unlike unsecured loans, LAP is backed by a physical asset. This lowers the risk for the lender. Even if your CIBIL score is poor, your property provides assurance that the lender can recover their funds in case of default.
Moreover, many NBFCs and online lending platforms have become more flexible in evaluating a borrower’s profile. They look at alternative factors such as:
- Income statements
- Property documents
- Business turnover (for self-employed)
- Bank statements
Applying for LAP Online as a CIBIL Defaulter
The process of applying for a loan against property online is simple and more transparent today:
- Research Lenders: Not all lenders are open to offering loans to CIBIL defaulters. Focus on NBFCs and fintech platforms that specifically mention bad credit loan options.
- Check Eligibility: Use online eligibility calculators to check if your income and property value qualify for a LAP.
- Submit Documents: Most online portals will ask for:
- Property documents
- Income proof (salary slips, ITRs, bank statements)
- KYC documents (ID, address proof)
- Get a Valuation: The lender may arrange for a digital or physical inspection to assess your property’s market value.
- Loan Approval & Disbursement: If approved, the loan is sanctioned and disbursed directly into your bank account, often within a few days.
Points to Consider Before Applying
- Higher Interest Rates: Be prepared for interest rates that are 2-4% higher than standard LAP rates due to your credit risk.
- Loan-to-Value Ratio: Most lenders offer only 50%-70% of the property’s market value to CIBIL defaulters.
- Risk of Losing Property: Since your property is mortgaged, failing to repay the loan could lead to seizure or auction.
Final Thoughts
While being a CIBIL defaulter does restrict your financial options, it doesn’t completely shut the door. A loan against property online is a viable solution if you own a high-value property and can demonstrate repayment capacity. It’s a great way to consolidate debt, raise emergency funds, or invest in business growth.
