Loan Against Property Gets Rejected? Try These Essential Tips

With the rise in the cost of necessities like education or medical facilities in today’s world – arranging for sufficient funds can prove challenging. This often leads many to break into their savings, and often drain the same to fund various expenditures. Under such situations, opting for a loan against property can offer the necessary financial assistance.

However, applying for a credit might prove complicated at times, especially for first time applicants. One might even face application rejection. It is necessary to know some tips that every loan seeker can follow to prevent loan rejection:

Credit Score

You need to possess a good CIBIL score of 750 or above to be eligible for a property loan approval. A poor credit score indicates more chances of defaulting on repayments, thus lowering your chances of getting loan sanctioned.

Unpaid Dues

Financial institutions and NBFCs check borrower’s credit history and repayment history before sanctioning a Loan against Property from lenders. They perform a credit check whenever an applicant requests for credit. If they find records of late repayments or penalty charged, your chances of getting a loan against property (LAP) approved falls drastically.



With a good repayment history, you can also enjoy pre-approved offers with a loan against property. These pre-approved offers are applicable for personal loans, business loans, home loans, and on other financial products as well. By entering a few necessary details, you can check offers that are tailor-made for you and enjoy quick loan approval.

Job Stability

If an applicant changes jobs too often, it reflects poorly on his or her loan application. One of the primary criteria to approve a LAP is your job stability. Plus, you need to be employed at a reputed Government, PSU or MNC which guarantees steady income.

Lending institutions often prefer applicants who have been employed at a stable job for at least 5 years or have 3 years of minimum business vintage. This assessment of years of employment or running business determines their stability of income and repayment capacity. Financial instructions are often reluctant to sanction loans to those who have just been into a job or have a habit of changing jobs frequently.

Loan Guarantor to a Defaulter

If you have been a loan guarantor to a defaulter it is likely to affect your own creditworthiness by a significant margin. Experts advise to not become a guarantor unless you are absolutely sure of the repayment capability of the co-signer. Thus, one of the things to avoid availing a loan against property is to be a guarantor to a known defaulter. 


Apposite Property as Security

Lending institutions require suitable securities of high market value to approve a loan against property. They prefer an asset that would fetch them an appropriate resale value and substantial price if a borrower defaults on the credit. Keep this in mind while pledging collateral to your preferred lender. You are required to furnish all the documents of the asset to prevent your loan from getting rejected.

IT Returns and NOC

Filing income tax returns is crucial for every prospective borrower. You need to possess a clear track record of filing IT returns for at least 2 years.

Another essential criteria is having an NOC certificate on all previous advances. It shows that you have paid-off all your previous debts within the due dates. Not providing a No Objection Certificate on an old credit can lead to financial institutions rejecting your loan application. This is one of the crucial factors to consider while taking loan against property in India.

Number of Rejected Loan Applications

Credit bodies like CIBIL records incidents of your loan application rejections from your credit history. If you have applied for too many property loans or any other type of unsecured loans previously, your credit rating is likely to take a hit.


It is also advised to check the loan eligibility of your lender before applying for an advance. Also, use financial tools like loan eligibility calculator to determine whether you qualify for the credit facility.
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