Lenders are often apprehensive when they receive a loan application from a senior citizen. Uncertainty around their income and life becomes major roadblocks for retirees to get a loan approved.
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Any unforeseen circumstance may necessitate the need for external financial aid in the form of an instant loan. Here are a few tips to make your loan application worthy.
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The primary step is to maintain an above-average credit score. Lenders will definitely review your credit score if you request for home loan, etc.
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Keep in mind that a good credit score ranges above 750 and will convince the lender of your financial repayment capabilities.
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In the case of home loans, each bank would have its own criteria related to age, income, etc. Make sure to review those before sending a loan application.
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Banks would normally prefer pensioners with a stable income throughout the loan duration. However, it may differ as per the lender. Therefore, go through the prerequisites and apply accordingly.
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A smart way to convince the lender about your repayment capacity is to add a co-borrower. This person must have a stable income and good credit score. It can be your wife or son. They can compensate for the uncertainties you bring to the application.
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Lower loan-to-value (LTV) ratio means you fund a higher percentage of the loan. It will not only lower the lender's credit risk but also reduce your monthly EMI burden.
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Senior citizens can go for a secured loan that involves collateral like gold, PPF, property, etc. Lenders are far more relaxed in the case of secured loans.
Published: July 26, 2021, 17:41 IST
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