To apply for and receive approval on your home loan application, it is important that you match the lender’s terms and conditions. Sometimes, you may be able to comply with all of the home loan eligibility criteria, but may also require a home loan guarantor to complete the process.
To understand further and answer questions such as, ‘Is guarantor required for home loan?’, and ‘How to check home loan guarantor eligibility criteria?’, read on.
A home loan guarantor refers to a third-party individual who acts as a guarantee for a mortgage, rental or loan agreement. The role of guarantor in home loan is that if the primary applicant defaults on a payment, the guarantor will become responsible for fulfilling the obligations, i.e., repay the borrower’s share.
Lenders typically ask for a housing loan guarantor when:
A home loan does not normally require a guarantor. In instances of poor loan eligibility, wherein doubts are cast on a borrower’s ability to repay, lenders will ask for a guarantor in home loan. However, it is necessary to have a guarantor for loans disbursed to retired people. Hence, a borrower should opt for a suitable guarantor, such as a family member, relative or friend, and this individual should have a strong financial profile. It is also important to note that there are documents required for home loan guarantor, and lenders will require these at the time of application.
Normally, a guarantor home loan is needed when you borrow a loan over a specific threshold. However, some lenders insist on one irrespective of the loan amount to safeguard their interests. Also, some require a guarantor only in cases of non-fulfilment of certain conditions by the applicant.
The primary responsibility of a home loan guarantor is to offer a kind of security or assurance on behalf of the borrower to the lender. In case of a default, the guarantor will step in and pay the missed EMIs.
Loan guaranteeing can become an unfortunate circumstance if proper precautionary measures aren’t taken. When approached to become a guarantor, it is imperative to consider the borrower’s repayment capabilities.
Additionally, it helps to keep these important tips in mind before becoming a guarantor for home loan:
Some of the other pertinent questions to ask are described in the table below.
With these pointers in mind, you can make an informed decision, as both a borrower and a guarantor. To minimise any issues during loan processing, choose the Bajaj Housing Finance Home Loan. The loan is loaded with features to help you enjoy a comfortable and convenient experience. With it, you can avail a sizable sanction and fund the purchase of your dream home easily. You can opt for a tenor that ranges up to 30 years and repay at a competitive home loan interest rate for maximum savings.
For quick and easy access to these home loan benefits, and more, apply online by sharing basic personal information.
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Last update on 11-Mar-2021
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