A "low interest" loan shouldn't mean you have very little interest in paying it back!
  • How to Obtain a Home Loan After Retirement

    With several approvals and more than a few eligibility criteria, procuring a home loan can be a tiresome process even for working individuals. For senior citizens who have retired from their job, it may seemingly be impossible for them to obtain a home loan. Quite naturally, it is a risky affair for lenders to loan money to retirees. This is so because they do not have a steady source of income. However, there are ways in which a pensioner can obtain a home loan.

    Tips on How an Individual can Obtain a Home Loan after Retirement

    • Assigning a Co-Applicant – A pensioner’s chance of availing a home loan increases considerably if he/she adds an earning individual as a co-applicant. By applying children or spouse as a co-applicant, not only does the chances of obtaining the home loan increase, but the total loan amount increases as well.

    Besides the benefits mentioned above, adding a co-applicant can also help you gain tax benefits.

    • Limit Your Applications – One of the most important factors that banks keep in mind before approving your home loan is your credit score. Your credit score also plays an important role in determining the rates of interest on the home loan. Having your housing loan application rejected causes a decline in your credit score, causing all future loan applications to likely get rejected.

    As an alternative, you can always visit online marketplaces that help you compare loan details across all banks, comprehend if you are eligible to apply for a particular loan, and then apply for it only if you are certain about it.

    • Apply for a Secured Loan – A secured loan is a loan that is backed by an asset. These assets are used as collateral in order to obtain the loan. In the event that the borrower fails to pay the loan, the asset provided will be compromised to make up for the missed payments. A secured loan is easier to obtain that an unsecured loan, thereby allowing the pensioner to avail a home loan easily.
    • Choose a Lower Loan to Value (LTV) ratio – LTV ratio is basically the ratio between the amount of the property financed by the bank via the home loan in comparison to the finance the borrower would have to use as down payment for the house. For instance, if the property is valued at Rs.1 crore, and the lender loans you an amount Rs.80 lakh as home loan, the LTV ratio is 80%. Choosing a lower LTV will increase your chances of obtaining the loan and will reduce the burden of EMI as well. The lower EMI will also weigh during the process of approving the loan. A lower EMI will give a pensioner a better chance of obtaining the home loan.
    • Use an EMI Calculator - With technology amalgamated into banking and finance, it is now simply to figure out the Equated Monthly Instalment (EMI) that an individual has to pay towards a home loan. Retired individuals can use this to their advantage to estimate the monthly outflow of cash that they would have to incur to pay for the home loan. Understanding this before applying for a loan reduces the changes of rejection as pensioners can apply for a loan, after doing adequate research, based on their repayment capacity.

    By typing in basic details like rate of interest, loan tenure, loan amount, down payment, etc., the EMI calculator will gauge all the information and provide you with all the details of the loan. This includes details like the total interest you would have to pay for the home loan, what the principle amount is, and naturally, what your Equated Monthly Instalment (EMI) payable towards the loan is going to be.

    As it is understood, a minor variation in interest rates on a particular home loan can have a major impact on the total interest payable towards the same. Therefore, it is vital to study the various types of loans available in the market, the interest rates on these loans, etc. before narrowing down and choosing a particular home loan. One must make sure to use the several online marketplaces that help compare loan products from different banks, which is sure to help you obtain the best possible home loan that suits your requirement.

    Hurdles Faced by Retired Individuals Looking to Avail a Home Loan

    • The Loan Tenure – Many banks and other financial institutions expect their home loan customers to pay off the loan by the time they reach 65 - 70 years of age. There are a few banks, however, that provide home loans to individuals up to the age of 75. This therefore reduces the total tenure of a home loan, increasing the EMI substantially. Lenders are then forced to believe that retired individuals do not have that kind of repayment capacity, making it risky for them to approve the loan. This is definitely a burden that retired individuals face while applying for a home loan. If given a choice between someone who is 35 years old and someone who is 65, lenders are most likely going to choose the former when it comes to disbursing a home loan. This is so because the tenure of the loan would be longer, making the EMI more affordable in the case of the 35-year-old applicant.
    • Equated Monthly Instalment (EMI) Affordability – For any institution that provide home loans, the monthly income of an applicant is one of the most important factors taken into consideration prior to sanctioning the loan. Typically, banks favour providing a home loan to applicants whose EMI for the home loan combined with the other loans they are presently paying for do not exceed 40% – 50% of their monthly income. As the income from pension for retired individuals is only a tiny part of a his/her last drawn salary, the likelihood of a retired individual obtaining a home loan reduces considerably.

    Although it is slightly more difficult for a retired individual to obtain a home loan, it isn’t impossible. The steps mentioned in this article can help guide you through the process in obtaining a home loan if you are a retired individual. 

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    Home Loan Reviews

    • DHFL Home Loan
      "Not satifactory service"
      0.5 1.0/5 "Really Bad"
      I got home loan with DHFL FINANCIAL INSTITUTION . I am not happy with the services even the customer service response is not so good . The loan amount which they gave was good but they charge very high rate of interest . Overall it is fine experience .
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • LIC Housing Home Loan
      "Should be transparent and prompt"
      0.5 1.0/5 "Really Bad"
      I have housing loan from LIC, the interest is high. My property located in lucknow but I am staying in mumbai hence for the balance transfer its very difficult they need lots of loan documents. Without proper notification they increased the interest but for the reduction they have lots of procedure and I need to pay Rs.1000.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 22, 2019
    • LIC Housing Home Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      LIC HOUSING FINANCE has also offered me a home loan. The process was quick and I got the loan on time. The rate of interest is and there were processing charges as well both are very nominal compare to others in the market . The tenure period is 10 year and it is sufficient .
      Was this review helpful? 0
      , vadodara
      Reviewed on Apr 21, 2019
    • review Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I have SHAMRAO BANK i have took home loan from this bank . Their service is better, Overall the whole loan process was easy and hassle free. Only the rate of interest were high with this bank. The processing fee is nominal with this bank . And the loan amount is not satisfactory .
      Was this review helpful? 0
      , pune
      Reviewed on Apr 21, 2019
    • HDFC Limited Home Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      HDFC LIMITED is the bank where i have taken the housing loan the loan amount they have offered was good and satisfactory added on that the documentation process was simple and pretty simple documents. I got the loan within one day, the rate of interest was nominal.
      Was this review helpful? 1
      , bangalore
      Reviewed on Apr 20, 2019
    • DHFL Home Loan
      "Very good service"
      0.5 4.0/5 "Great!"
      I had taken a Home Loan from DHFL LTD a long time back and the loan is still running. The loan amount has been sufficient but the interest rate with them has been quite high, where they had not reduced the interest rate as well. The processing fee and charges which they had made has also been high when compared with the other banks.
      Was this review helpful? 1
      , faridabad
      Reviewed on Apr 20, 2019
    • HDFC Limited Home Loan
      "Interest rate should be reduced"
      0.5 4.0/5 "Great!"
      My housing loan process was simple with HDFC Ltd, they took only 3 working days to verify and sanction the amount, they didn't ask any guarantor for my loan, but I feel the interest is bit higher, I took the amount of Rs. 5 lakhs for the duration of five years.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Apr 20, 2019
    • ICICI Bank Home Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      I have applied or the housing loan with the ICICI BANK the documentation process was simple and easy to get the loan they have given the 95% of value as a loan amount. The duration for repaying the loan is for 20 years and using from last 2 years. The rate of interest was 8.6% which was nominal.
      Was this review helpful? 2
      , pune
      Reviewed on Apr 19, 2019
    • LIC Housing Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I took my housing loan with LIC HOUSING FINANCE previously, They gave me sufficient loan amount based on the requirement, but i felt they have charged me high rate of interest and even they have charged me processing fee high, so i have done balance transfer to other bank.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Apr 19, 2019
    • Bajaj Finserv Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I did balance transfer from one bank to Bajaj finserv for housing loan, the loan amount was sufficient, but rate of interest i felt was less compare to other bank loan, the rate of interest they have charged me up to 8.85% which was nominal, everything is good but i did not like one thing ,like after doing balance transfer i came to know that it is mandatory to pay insurance for premium it use to get lock after paying insurance, i can not do in future balance transfer .
      Was this review helpful? 2
      , hyderabad
      Reviewed on Apr 19, 2019
    • Indiabulls Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I hold my housing loan with Indiabulls for an while. They have given me loan on time without any delay, their service was good. The process in getting loan was simple, i got loan on time. Their rate of interest was nominal, still this loan is running.
      Was this review helpful? 2
      , new delhi
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Very good"
      0.5 4.0/5 "Great!"
      Last 4month back I took one home loan from HDFC Limited , but I am not satisfied with their rate of interest since it is little high , and loan amount is 30L I am satisfied with loan amount and and EMI amount is 25K and tenure is 25years , but their customer service is not much good ,and response not at a time.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Best service"
      0.5 4.5/5 "Excellent!"
      I hold my housing loan with HDFC LIMITED for an while, their service is good, but not sure about the rate of interest like every 2-3 months they are increasing my limit up to 0.05% i need to check with the customer care regarding this, the loan amount was sufficient, they have not charged me processing fee.
      Was this review helpful? 1
      , bangalore
      Reviewed on Apr 19, 2019
    • IIFL Home Loan
      "NOT SATISFIED"
      0.5 1.0/5 "Really Bad"
      I have previously used the housing loan with the INDIA INFOLINE HOUSING FINANCE LTD and transferred to another bank because the rate of interest was higher. They have offered the pre approved so taken. There are hidden charges applicable also it is floating rate of interest with this bank which was 32% which am not happy.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "GOOD"
      0.5 4.0/5 "Great!"
      The documentation process was easy and simple with the HDFC LIMITED and housing loan was taken before few days. The rate of interest was lesser so transfered the loan with this bank. The duration is for 30 years to repay the loan. There is a pre closure option with this loan.
      Was this review helpful? 2
      , mumbai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Very good"
      0.5 4.0/5 "Great!"
      I am satisfied with loan amount of 8L with the rate of interest is 8.65% , EMI amount is 6769 rupees and tenure is 20years. It was taken last two years back from HDFC LIMITED and their overall service is good but I would like close this loan after 3 to 4 months.
      Was this review helpful? 2
      , new delhi
      Reviewed on Apr 17, 2019
    • Bank Bazaar Home Loan
      "balance transfer"
      0.5 4.0/5 "Great!"
      i like your offer...t is the first time experience with the Bankbazaar.com and i have a good experience with this channel. I prefer using it through the mobile application as the application is simple and user friendly to access. The customer service is good.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 17, 2019
    • Axis Bank Home Loan
      "Process is good"
      0.5 5.0/5 "Blown Away!"
      My home loan is with Axis Bank and the process to get the loan is good. The disbursement happened on time and the customer support and response is good. The documentation was also a smooth process. The rate of interest and processing charges is normal.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 17, 2019
    • IDBI Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I took housing loan with IDBI bank for an while, the loan amount which they have given me was good, it was sufficient based on my requirement, the rate of interest and their processing fee which they have charged me was nominal, AS it is government bank their service is not that up to the mark, but the interest rate was less so i applied.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 17, 2019
    • LIC Housing Home Loan
      "Interest rate should be reduced"
      0.5 4.0/5 "Great!"
      LIC housing is good but interest is the concern, I took the amount Rs. 20 lakhs for 20 years. They quoted 10.8% its a floating one, they didn't revise the interest as per the RBI guideline. But they do have balance transfer, part payment and other options.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 17, 2019
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