Home loans are a blessing for common people since they enable a common person to own a house or flat at a relatively young age, which they wouldn’t have been able to afford in the absence of such financing options.
It might appear – and is indeed the case – that an overwhelming share of home loans is taken by people in their thirties and forties, when they have at least 15-20 years of working life left. But does that mean, senior citizens are not sanctioned home loans?
The largest lender in the country, State Bank of India, in fact says that it is one of the myths that if you are above 60, your application for a home loan will not be entertained. SBI says that if a senior citizen can prove that he/she has repayment capacity, his/her application for a home loan will certainly be favourably considered.
Usually no ongoing EMIs
In fact, SBI thinks that a senior citizen hardly has any loan at all and it makes him/her relatively unencumbered compared to a younger person who could easily have a car loan, personal loan or an education loan against his/her name.
Cash flow important
In fact, a sizeable number of people who are past 60 have substantial investments in income-generating assets either linked to the market or fixed-income securities. These can be fixed deposits, NPS (National Pension System), Senior Citizen Savings Scheme, annuity plans, pension from the government etc. These could provide them with the necessary cash flow to pay EMIs.
Shorter tenure
However, due to their advanced age, the tenure of home loans given to senior citizens is shorter than one who is in his thirties or forties. Remember, the credit score is of paramount importance in sanctioning a home loan. If the applicant had any record of not defaulting on any loan during the younger years, it might prove to be an obstacle in securing a loan for him/her.
Pay off by 75
Usually, banks want that a senior citizen pays off the loan completely by the age of 75. Therefore, senior citizens are considered for 10-year loans. A bank might want a co-applicant for the loan of a guarantor.
Home loans are not only given to those drawing a salary but also sanctioned for those getting a pension, says the largest bank in India. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
