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Less Disclosed Reason for Denying Loan against Property

Less Disclosed Reason for Denying Loan against PropertyLoan against property is one of the best ways to pull out the necessary finances from the lenders during the times of need. Lenders are more interested in issuing these types of loans as less risk is involved in the approval of the loans. As these secured loans come with lower interest rate, they are favoured by many to address their financial needs. To your surprise, even loan against property application is rejected by the lender for few less known reasons. Here is a list of few reasons for your knowledge.

Is Your LAP Application Denied? Find Out Why?

 Property age

Age of the property is one of the major constraints in the approval of loan against property. If the age of the property is 10 years and cap is 30 years, you will be able to get the loan for 20 years. On the whole, the younger your property is longer will the tenure. The age of the property will have an impact on your eligibility for the loan too. Age of the property, its value and location along with your income will be the major determinants of the loan against property. If you have renovated the old property recently, you will be benefited with raise in both the loan value as well as tenure.

Lack of government approval/ title deeds

If you have inherited property from the elders in the time when much stress was not levied on the government approvals for the construction of the property, it may not have favourable terms in the eyes of the lender while approving the loan and end up in rejection. The property you pledge to get a loan against property should have good title deed too. The Patta land you pledge without proper title deed will face rejection from the lender.

Deviation from the approved plans 

If you are pledging an independent property to get the loan approved, you should make sure that there are no major deviations in the construction of the building from the government approvals. If the lender finds any deviation in the construction of the building, your loan will be rejected up front.

Consent from siblings  

When you are pledging an inherited property, your siblings might be the owners of the property too. In this case, consent of the sibling is mandated to pledge the property. The sibling may either become co- applicant of the loan or sign an agreement saying he/she is no longer owner of the property. This is done to ensure that there are no legal disputes regarding the pledged property over the tenure of the loan. A property pledged without the consent from the co- owner will face rejection.


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