“Lal Dora” villages are an integral part of Delhi landscape. The term “Lal Dora” was first used in 1908. In those days that part of the village which was used for residential purposes was demarcated with Red thread around them. This demarcated land is known as “Lal Dora” land. “Lal dora” lands were used to support livestock’s. There are over 360 villages in Delhi under “Lal Dora”. Prominent examples of “Lal Dora” villages in Delhi includes Basant gaon, Munirika, Khirki, Yusuf Sarai, Mahipalpur, Chatarpur, Lado Sarai, Mehrauli, Najafgarh etc.
Currently, “Lal Dora” areas are facing large number of problems like rampant illegal construction , gross commercialization, bad infrastructure, over population and unemployment. Though meant for only residential construction, rampant construction & illegal development are part of the daily routine in these villages. Some of the common violations are construction beyond permissible limit and illegal addition of a number of floors.
As Buildings in “Lal Dora” areas are usually exempt from building by laws and construction norms regulations under Delhi municipal Act dated 1963. Usually, banks and NBFCs hesitates in providing Loan against Property to properties in “Lal Dora” villages. If you are living in a “ Lal Dora” property in Delhi and want a Loan against Property then you need need to read below mentioned points prepared by LoanKuber to fulfill your dream of Loan against Property-
- Be Updated – You should be updated on recent development in property space. More often than not government of the day regularizes land on “Lal Dora”. A regularized area has much more marketable value compared to a non – regularized one.
- Show your clear income – Usually, a credit officer will come to your premise to discuss your case with you. In this meeting you should clearly discuss your sources of income. If you are having a property in “Lal Dora” then you need to satisfactorily explain your income to officer so that your eligibility can be accurately calculated.
- Seek certain HFCs that offer loan against property to individuals with ‘Lal Dora” property -There are certain HFCs and organizations like Religare Housing, Shubham Housing Finance etc which provide loans to the individuals having Lal Dora property.
- Peer to Peer Lending – New age institutions like Peer to Peer lending platforms are acting as disrupters in lending space. These institutions don’t rely on existing norms of lending industry. They use new age technologies like payment modeling, social media profiling, data analytics etc to lend to the customers. Modern platforms like LoanKuber offers Loan against Property on Lal Dora lands to customers by using all the methods mentioned above.
- Seek lower LTV – LTV denotes how much of the proposed loan value a bank can lend to a borrower. A 80% LTV indicates that the buyer will have to shell out only 20% of the proposed loan value and the rest can be financed through banks. If you are applying to Loan against Property on Lal Dora land then you should put in funds from your side to make your application more creditworthy.
- Maintain good CIBIL score – If you are having a current loan or loans on your name then, you should try to maintain a excellent repayment behavior. A good repayment behavior will result in excellent CIBIL score. CIBIL score is the gold standard in lending industry. If you maintain a excellent CIBIL score then banks would be more then willing to lend to you even if you have a property on “Lal Dora” land. A CIBIL score greater than 800 will give you a negotiating power in front of a bank.
- Maintain good banking habits – Ideally, you should try to maintain a average bank account size that should be twice of your proposed EMI for Loan against Property. If lending institution observes good banking habits with excellent average bank balance then, chances of getting your loan sanctioned are increased.
A property on “Lal Dora” shouldn’t result into a negative response from banks for your Loan against Property application. There are plenty of options in the market to finance your dream of Loan against Property. We at Loankuber can assist you in fulfilling your dream of getting a Loan against Property for your property on Lal Dora with excellent terms.