Tips to Get LAP Without Income Proof in 2023

The Indian market for loans against property (LAP) is set to grow at a CAGR of more than 14% over FY2020 to FY2026 and reach nearly USD 857.87 billion by FY2026. This shows that several borrowers like you are availing an LAP.

Sometimes, you may hesitate to apply for a loan because you don’t have formal income proof. Thankfully, a top lending bank in India offers home loans against property and commercial loans against property without asking for formal income proof like Income Tax Return (ITR).

How to get an LAP this way in 2023? Here are some useful tips for that and the documents required in this case.

Tips to Get an LAP Without Income Proof

• Apply with a Co-Borrower

There are several advantages of having a co-applicant on a loan. This doesn’t just allow you to qualify for a larger loan amount but also gives the lender some confidence about your repayment capacity. As the bank carries out income verification, the co-borrower will be regarded as the primary applicant.

• Verify Your Banking Experience

Always check your activities on your savings bank account before applying for a loan because the lender will check your bank statements. You must therefore maintain a minimum balance in your account. Good banking practices can boost the chances of receiving a loan.

• Speak To The Relationship Management

A relationship manager is allocated to each savings bank account holder. The person can help you with the application procedure and take you to a suitable individual. Consider speaking honestly about your lack of income documents and assure the lender that you will repay the loan responsibly.

• Explain Why You Don’t Have an Income Proof

Explain to the lender why you didn’t file an ITR this year or the last one due to a valid reason or unforeseen circumstances. The loan officer will figure out your repayment capacity by evaluating your previous income.

• for a Lower Loan-to-value (LTV) Ratio

This ratio ascertains the maximum amount of a secured loan the lender can offer as per the current market value of the residential or commercial property against which the loan is given.

If the chosen LTV is 80%, the lender will cover 80% of the collateral’s cost and you need to arrange funds for the remaining 20%. By choosing a lower LTV ratio, the chances of getting a loan without income documents usually increase.

Documents Needed for a Loan Against Property Without Formal Income Proofs

Whether you are a salaried individual or a self-employed individual/non-individual without formal income proof, you can show the other necessary documents to the lender to apply for an LAP. Here’s a look.

Salaried Individuals

• Signed and filled loan application
• Identity and residence proof like PAN card, Aadhaar card, Job card issued by NREGA and/or Voter ID card
• Alternative income proofs like the latest Form 16, the last 3 months’ bank statements and/or the last 2 months’ salary slips
• Property documents

Self-Employed Individuals

• Filled and signed loan application
• Identity and address proof like an Aadhaar card, Voter ID card, PAN card, etc.
• Alternative income proof like the last 6 months’ bank statements, the last 2 years’ P&L accounts and balance sheets (with schedules), etc.
• Property documents

Self-Employed Non-Individuals

• Filled application signed by them
• Identity proof like AOA and MOA of company, copy of GST registration, PAN card, etc.
• Alternative income proof like the last 2 years’ balance sheets (with schedules) and P&L accounts, the last 6 months’ bank statements, etc.
• Property documents

Consider choosing a reputed bank that offers commercial loans against property and home loans against property to have enough options in hand. Be ready with the required documents before proceeding with the application process.