With the increasing number of financial institutions, availing a home loan has become a hassle-free process. Moreover, simple home loan eligibility criteria and flexible repayment options have further contributed to the growing popularity of home loans. For retired individuals, availing a home loan may seem to be a tiresome process. This is because most retirees usually don’t have a steady source of income and it makes them a high-risk loan applicant. However, there are ways through which a pensioner can obtain a home loan. Therefore, if you are a retired individual looking forward to availing a home loan, you can take help of below-mentioned suggestions to increase the chances of your home loan approval.
Assigning a Co-Applicant
- Retired individuals can increase their chances of home loan approval if they add an earning individual as a co-applicant.
- It not only increases their chances of obtaining the home loan but also the loan amount may increase significantly.
Limit your applications
Your credit score plays a very crucial role in your home loan approval. Financial institutions check your credit score before approving your home loan application. Having a high credit score reflects your high repayment capacity. Moreover, it can help you avail a higher loan amount at a reduced interest rate. On the other hand, if you have a low credit score, it can lead to the rejection of your home loan application. This can further hamper your credit score.
Therefore, it is advisable that you should limit your home loan application. Additionally, you should check home loan eligibility criteria set by your lender beforehand using a home loan eligibility calculator. This will reduce the rejection chances of your home loan application. You should also checkout the reasons for rejection of loan application.
Apply for a secured loan
A secured loan is a loan that is pledged against collateral. Therefore, if you fail to repay the loan amount, the asset pledged as collateral will be compromised to make up for the missed payments. A secured loan is easier to avail as compared to an unsecured loan. This allows the pensioner to avail a home loan easily.
Use an EMI Calculator
With the help of an online EMI calculator, retired individuals can calculate their monthly installments beforehand. This will allow them to have an estimate of the monthly cash outflow that they would have to incur to repay for the home loan. It is advisable that retired individuals should calculate their EMIs beforehand and avail a loan amount depending upon their repayment capacity.
Even a slight variation in the home loan interest rate can help the borrowers save a large amount of money in the long run. Therefore, it is important to study and compare the various types of loans available in the market. This will help them avail a home loan that best suits your needs.
Let us have a look at some of the most common hurdles faced by retired individuals while availing a home loan.
The Loan Tenure
Lenders usually expect their home loan borrower to pay off the loan by the time they reach 65 – 70 years of age. However, there are a few banks that have the option of home loan for retired person. However, when retired individuals avail a home loan, the loan comes for a short tenure. This increases the EMI substantially. The higher the monthly installments, the higher should be the repayment capacity of the borrower. Since most retired individuals do not have a substantially high repayment capacity, it affects their chances of availing a home loan.
Equated Monthly Instalment (EMI) Affordability
The monthly income of the home loan applicant is one of the major factors taken into consideration prior to sanctioning the loan. Usually, lenders prefer providing a home loan to applicants who do not already have repayment burden of other loans. Since the income from the pension for retired individuals is only a tiny part of their last drawn salary, the likelihood of a retired individual obtaining a home loan reduces considerably.
Although it is comparatively difficult for retired individuals to obtain a home loan, it isn’t impossible. With the help of the tips mentioned above, pensioners can boost the chances of approval of their home loan application.
With the help of Bajaj Finserv Home Loans available at Finserv MARKETS, retired individuals can easily avail a home loan with the help of a hassle-free online application process. Instant approval and quick disbursal of the loan amount are some of the added advantages of availing a Bajaj Finserv Home Loan. Lastly, it is advisable to read all the terms and conditions of the loan agreement carefully before signing it. This can help you avoid any inconvenience in the later stages.
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