If you are a pensioner. Have retired. If you are above 60 years of age then taking a home loan may seem a bit difficult. This is because banks carefully examine your loan repayment ability, old debt and credit history. However, if you manage your money properly and maintain discipline, your chances of getting a home loan can increase significantly. To get loan at low interest and easy terms, it is important to strengthen your credit profile.
According to Atul Monga, CEO and co-founder of Basic Home Loan, senior citizens face difficulties in taking a home loan because their income depends on pension and health risks are also high, but they can increase their chances by improving their credit profile, Mint reports. He also said that it is very important to take loan with a young co-applicant, keep the debt low and maintain a good credit score.
Why is credit score important after 60?
Banks decide on the basis of your credit score how safe it is to give you a loan, especially if your income is limited. A good credit score shows that you handle money responsibly. This increases the chances of getting a loan, better interest rates can be obtained and it also becomes easier to negotiate the loan terms.
5 easy ways to improve credit score for pensioners
- Pay off big debts first- Eliminate large amounts of debt as soon as possible. This will reduce your total outstanding and make your profile stronger.
- Pay on time- Never miss a credit card bill, EMI or any installment. Making payments on time increases your credibility.
- Take joint home loan- Make a co-applicant to a young person such as a son or daughter who has a credit score of 750 or above. This strengthens your application.
- Do not apply for loan again and again- It is not advisable to apply for loans at multiple places in a short period of time. This makes the bank feel that you need more money.
- Choose short term loan- By taking a loan for a shorter period, the EMI will be slightly higher, but the loan will end quickly and the bank’s risk will also be considered less.
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