Can I get a loan against GPA Property

by varun · Published September 2, 2020 · Updated December 24, 2021

Loan against GPA property

Large numbers of properties in Delhi – NCR are registered under GPA. GPA stands for general power of attorney. General power of Attorney is a legal instrument that is used by a person (granter) to confer authority on another person (grantee) to act on his behalf. The action performed by GPA holders is deemed to be performed by granter itself. But, one fact with GPA is that it doesn’t give any ownership of the property to the grantee.

For an individual residing in GPA property it is an uphill task to get a Loan against Property from a bank. Banks usually don’t entertain applications for Loan against Property for GPA property. One of the main reasons for this is GPA doesn’t create any ownership of property for GPA holders. It has been observed that individuals with good income also face a problem in getting a Loan against Property for their GPA property.

We have prepared a following list of points to help you in getting a Loan against GPA property –

Clear communication – Try to communicate your source of income clearly with the loan officer. Having a stable and continuing source of income would mitigate the risk of lending against GPA property.
Good CIBIL score – You should always try to maintain a good repayment behavior on your existing loans. A default free repayment behavior would result in a good CIBIL score and it will increase your credit worthiness for Loan against Property in front of the lending institution. Lending institutions usually look for CIBIL scores greater than 750.
Peer to Peer lending – Peer to Peer lending platforms are new age platforms which don’t rely on existing lending practices followed in the lending industry. They would look into factors like payment modeling, Data analytics, Social modeling etc. to calculate your eligibility for a Loan against Property.
Be Updated – It is generally seen that areas under GPA are often regularized with proper registry under different government schemes. You should regularly follow news headlines related to property in your city to find out whether your locality is getting regularized or not.
Registering the property – In some localities, you can register your GPA property by incurring a small cost at the sub-registrar office. This small cost can increase your eligible amount for a Loan against Property by 30-40%.
Seek certain HFCs that offer Loan against Property to GPA – There are certain HFCs and organizations which provide loans to the individuals having GPA property.
Add funds from your side – Sometimes lending institutions can fund up to a certain percentage of your Loan against Property application. You can always add funds from your side to make your application more credit worthiness in front of a lending institution.

It is true that lending institutions don’t offer a Loan against Property to an individual having a GPA property. But, you can still get a Loan against Property by following above mentioned points. You can always reach out to new age institutions to fulfill your dream of getting a Loan against GPA Property.