Your loan application can be rejected if you fail to meet the eligibility criteria. However, it does not mean that you should not apply. Even if you do not have a stable job or your credit score is less, you can still get a home loan.
Continue to read further to learn ways through which you can get a housing loan even if you are unemployed.
- Credit history
You must have a positive credit history to avail a home loan without unemployment. This means your credit history is clear and does not have any previous defaults in EMI payments on debts and credit cards. You must also try to keep the credit utilization ratio low. A ratio below 30% is good for your credit history. Moreover, check your credit report regularly to identify and rectify discrepancies or irregularities.
- Credit score
When unemployed, it becomes crucial for you to have a good credit score. In India, a credit score of 700 and above is considered necessary for a home loan. However, it would be best to maintain a credit score higher than 750-800 when you do not have a job. This will give the lender assurance that you have not defaulted in your credit transactions earlier and are safe to lend money to, provided you can show some source of income for repayment.
- Source of income
You might not spend 8 hours of your day in an office, but if you have a source of income, it could be enough for lenders to approve your loan. It could be rental or interest income. Also, if you are receiving freelancing income, that should suffice too. Lenders can also consider applicants who receive retirement or pension, payment from social security benefit alimony, or government annuity payments. The lender only wants an assurance that you would not default on EMI. Therefore, even if you do not get a paycheck every month, you can still avail a loan with whatever income you receive.
Things You Need To Consider While Taking a Home Loan withouta Job
- Avail a joint home loan
It could be stressful to get your home loan approved when you do not have a job. However, having a co-applicant can be significantly useful. Take a joint loan with a co-applicant who has a good credit history and a steady source of income. It can be your spouse, parent, or siblings. The lender would club the income of both applicants to determine the home loan eligibility and could approve your loan application.
- Avoid going for a high amount
Availing a high loan amount can lead to home loan rejections. Being unemployed, you are already a high-risk borrower for the lender, availing a big-ticket loan can increase that risk. Instead, go for a small amount for a longer tenure so that you can repay comfortably during the tenure. Agreed, it could be tricky to take a home loan when you are unemployed. Therefore, be careful when you avail a loan. Borrow only that much amount that you can comfortably repay. Also, ensure that you provide accurate documents to prove that you will be able to repay. Loss of job would not hold you back if you can assure the lender of your creditworthiness.