Tips for Senior Citizens to Avail Home Loan
Jun 12, 2018 Home Loan
The entire home loan process loan is a tedious task. Young people think twice before applying for a home loan due to its lengthy paper work and process. And hence availing home loan is a scary task for the senior citizens.
While giving loan banks and financial institutions examine various factors to be ensure that their money is in the safe hands and they will get it on time. Among all factors the most crucial ones that the financial institutions look into is the age and income of the borrowers in order to assess the repayment capability of the loan applicant. Therefore these two factors only denotes that getting a loan for senior citizens are difficult. But actually its not like that.
Here we have enlisted few things through which the senior citizens can actually get a home loan.
While giving loan banks and financial institutions examine various factors to be ensure that their money is in the safe hands and they will get it on time. Among all factors the most crucial ones that the financial institutions look into is the age and income of the borrowers in order to assess the repayment capability of the loan applicant. Therefore these two factors only denotes that getting a loan for senior citizens are difficult. But actually its not like that.
Here we have enlisted few things through which the senior citizens can actually get a home loan.
Working co-applicant
If the co-applicant is working or have a stable income then a senior citizen is eligible for a home loan. In such case the co-applicant can avail tax benefits under section 80C and Section 24 of the Income Tax (I-T) Act. The co-applicant can avail the tax deduction on the principal amount as well as interest amount if he or she are also the co-owners of the property.
Applying in different places multiple times
If the home loan applicant applies for a loan in various financial institutions this lowers the credit score. The chance of getting a loan decreases if the banks or financial institutions make inquires about the applicant to the credit bureau. Hence, the borrower can check various loan products on online marketplaces and know the eligibility also. This will save a lot of time and effort that too without affecting the credit score.
Add on security deposits
Mutual funds, equity investments that have a higher rate of interests than that of the charge home loan interest rate can be add-on security for the banks. Such investments are considered as a backup to enhance the eligibility criteria of the borrower.
If the borrower is a pensioner then he or she might face certain difficulties.
If the borrower is a pensioner then he or she might face certain difficulties.
Tenure for the loan
Financial institutions or banks considers that the borrowers should pay their entire loan before 65-70 years of ages. Certain banks extend the limit up to 75 years. For senior citizens the upper limit for the tenure remains in between 9- 16 years and thus the EMI amount increases with the shorter period for the loan.
EMI affordability
One of the main criteria for lending money is the income of the individual which determines the individual’s capability to pay the EMIs. Ideally, the EMIs should not exceed beyond 40 to 50 percent of an individual’s income. But in case of pensioners, they have a fixed income that means limited earning and hence availing a loan becomes difficult.
Lastly, senior citizens should plan their savings and expenses and then only should apply for a loan. They can calculate their EMI through EMI calculator to know how much they actually have to pay every month and then they can decide on the loan amount vis a vis their daily income and expense. And accordingly, they can opt for loans that are suitable as per their budget. Also, it is important to study about different kinds of loans and interest rates.
Lastly, senior citizens should plan their savings and expenses and then only should apply for a loan. They can calculate their EMI through EMI calculator to know how much they actually have to pay every month and then they can decide on the loan amount vis a vis their daily income and expense. And accordingly, they can opt for loans that are suitable as per their budget. Also, it is important to study about different kinds of loans and interest rates.
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