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Are you looking to fulfil your dream of buying your home? If finances are a problem, then a home loan can help. Most lenders, banks or Non-Banking Finance Companies (NBFCs) offer loans to buy a home if you fulfil the eligibility requirements.
However, often, another hurdle that may hamper you from fulfilling your dream is the need for a guarantor for your home loan. If you are seeking a loan to buy a house and are worried about not having a guarantor, then we have the perfect solution.
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Who is a Loan Guarantor?
When you apply for a home loan, the lender will try to ascertain if you will be able to repay the loan. They look at various aspects like income, employment status and credit rating to assess an individual’s repayment capacity.
Sometimes the lender may want a guarantor also to sanction a loan.
A guarantor is a person who vouches for the borrower; in case the borrower defaults, the guarantor will have to take up the responsibility of repaying the loan. The guarantor becomes as liable as the owner, and thus it is a big responsibility to undertake.
A guarantor is different from a co-borrower or a co-signor for the loan as each has distinct rights and responsibilities. Owning to the substantial financial responsibility a guarantor undertakes with no right over the house, finding a guarantor might be challenging for the borrower.
How To Get a Loan Without a Guarantor?
PNB Home Loans, a trusted brand in the financial sector, offers loans that you can use for various purposes. If you are looking for a loan from them without a guarantor, the following ideas can help you.
Apply With A Joint Applicant
You can apply for a home loan with another applicant, known as a joint applicant. Applying with a co-applicant enhances your loan eligibility as both applicants’ income is added to calculate the amount of loan you can get.
You can take the help of a home loan eligibility calculator to calculate the loan amount you are eligible for.
Stable Income Helps
The lenders want to ensure that you can repay the EMIs effortlessly and regularly; for this, they look at your employment and income status.
If you have stable employment history and show regular income, then getting a loan without a guarantor is easy. Try not to switch jobs frequently if you intend to apply for a loan and maintain a record of your income, especially if you have multiple sources.
Reduce Your Loan Amount
When you apply for a loan, the bank sanctions a percentage of the property value as a loan; the rest you have to pay from your pocket, known as a downpayment.
If you make a larger downpayment, the loan amount automatically reduces. A smaller loan amount will improve your chances of availing of a loan without a guarantor.
It can be challenging to pay more as a downpayment as it has to come from your savings, but it reduces your EMI burden.
Use a home loan EMI calculator and check the EMI for different combinations of downpayment to better plan your finances for the future.
Be Credit Healthy
Being credit healthy is good for your overall financial well-being. A high credit score denotes you are a creditworthy applicant who is not likely to default.
Lenders are more likely to sanction loans without a guarantor to those with a good credit score rather than to applicants with a low rating.
Conclusion
Finding a good home and a suitable lender can be challenging. When looking for an NBFC, consider various aspects like lender reputation, interest rate and hidden charges. PNB Home Loan offers you loans at competitive rates and has a hassle-free and simple application process.
