Lenders in India want that a customer’s CIBIL score for a home loan should be at least 700, if not above 750. This is because CIBIL scores serve as a simple metric by which banks or housing loan finance companies or NBFCs can assess a customer’s repaying capabilities.
To avoid defaults ,lenders make every effort to know whether borrower will be able to pay back the finances borrowed diligently over the tenure. Hence, you may frequently hear about ‘minimum CIBIL score for home loan’, if you are applying for home loan .
CIBIL score for home loan
lets keep you well prepared ot understand the basic CONCEPT OF CIBIL . how cibil is calculated ? improved , how cibil can be improved, can you get home loan if your CIBIL is poor ?
This post aims to answer all of the above queries to help home loan borrowers be fully information ready to make a financial decision.
What is CIBIL Score?
CIBIL score is a credit score offered by the Credit Bureau Trans Union CIBIL. CIBIL or Credit Information Bureau (India) Limited is one of the 4 credit bureaus authorised by the RBI. This is to keep a credit record of every Indian citizen. The others are Equifax, Experian and Highmark,
CIBIL score carries a a great weightage as leading and most financial institutions here have ties with the bureau. It is very much possible that your lender is likely to give a higher weightage to CIBIL Score as compared to other factors or scores of other bureaus.
CIBIL score is a 3-digit figure ranging between 300 and 900. CIBIL assesses your repayment history, credit handling tendencies, and existing finances to arrive at a justified score.
What is Credit Score Range ?
Most credit scores range between 300 and 900 either from CIBIL or any other crediting rating bureaus . A score of 900 is highest scores and shows the highest credit worthiness of the individual.
750 and above in CIBIL score implies that you have required credit score for a home loan. It allows a easy processing of home loan or any other loan .A individual with above 750 cibil score can expect a competitive home loan interest rate
A score ranging between 650 and 749 is said as good. Lenders may offer you a home loan after seeking your other financial details.
Banks and lenders usually consider 650 as the minimum CIBIL score required for a home loan.
Scores ranging between 550 and 649 are average and require further working and documents .working on.
Below 550 is said as bad CIBIL Score. NH or NA implies that the individual has no yet have any credit history.
How to Check CIBIL Score
An individual can check your CIBIL score online via CIBIL’s official website once a year for free, or multiple times a year at a fee. Follow these steps:
• Go to https://www.cibil.com/
• Click on the orange button – ‘get your CIBIL score’- placed at the top-right corner.
• Select a subscription plan.
• Enter details like your date of birth, mobile number etc asked on the portal.
• Create your password that you will use when logging in later.
• Select your ID type and enter your ID details.
• Proceed to ‘verify your identity’ and answer all questions accurately.
• Complete the process at the ‘make payment tab’.
• If you need just 1 CIBIL score per year, skip the subscription plans and proceed to your account.
• Login by authenticating yourself via email or OTP.
• Upon submitting, your CIBIL score will be displayed on the dashboard.
How Much CIBIL Score is Required for a Home Loan?
The best CIBIL score for a home loan is 750 and more. Additionally, a score of 700 and above is still good and should suffice for most lenders. However, the approval is lender-specific. A higher CIBIL score translates to a faster loan approval, and on more affordable terms.
Few basic questions normally asked by borrowers or people interested in taking home loan
What is the Minimum CIBIL Score to Get a Loan?
The minimum CIBIL score for a home loan in India varies across lenders but normally 650 can be considered as safe CIBIL score to get loan with additional documentations and justifications asked by the bank official.
Does CIBIL Score affect Home Loan Eligibility?
Yes. If you have a good CIBIL score for a home loan, eligibility terms become simpler. Good cibil helps your application gets approved quickly. Lower scores imply risk, and lenders may have to change the home loan offering conditions.
Suppose a loan offered for a credit score of around 650 it might mean that you will get a lower principal loan amount .Also it may be very difficult to get a home loan without a credit score and lenders will have to look into other personal finance factors in detail before loan approval.
Can I Get a Home Loan with a Low CIBIL Score?
You can get a home loan with a low CIBIL score, but it is difficult. Since lenders are normally stringent with the minimum CIBIL score for a home loan requirement, it is good to be ready with the backup plan.
Benefits of a Good CIBIL Score
Here are a few standout benefits of having a good CIBIL score:
• A higher home loan sanction
• speedy loan processing
• more negotiating power with the lenders
• home loan at a nominal interest rate
How to improve CIBIL score easily ?
some ways by which you can build your credit score are as below
• Pay existing loan EMIs on time.
• Pay your credit card bills within the due date, in full.
• Monitor your credit report and rectify mistakes by informing the credit bureau.
While a CIBIL score proves your financial mettle, being able to service a loan hinges on another parameter as well such as your debt-to-income ratio.
To get a home loan that matches both your CIBIL score and your debt-to-income ratio, use a home loan eligibility calculator before applying and avail home financing on personalised terms.