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.
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.
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.
Keep in mind that a good credit score ranges above 750 and will convince the lender of your financial repayment capabilities.
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.
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.
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.
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.
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.
