Home Loan Tips: Banks use THIS tool to approve loans at lower interest rate Check details Zee Business

Table of Content

• How CIBIL Score Has an Impact on Your Home Loan Application?
• Home Loan Eligibility: What you Need to Know About your CIBIL Score?
• How to Calculate Home Loan EMI
• How to Check CIBIL Score
• Minimum CIBIL Score Required for Home Loan
• How can I improve my CIBIL Score?
• What is the difference between CIBIL Report and CIBIL Score?

Employers also prefer to check your CIBIL Score before hiring you as a part of their background verification process. At 650, your creditworthiness is satisfactory but with Fullerton Grihashakti, you will need a higher score. With this score, your application might stand a chance of approval but at the cost of high interest rates.

To check your credit score, you must visit the credit agency website or you can check it for free on Credit Mantri. You can also benefit from adding a co-applicant to your application. However, remember that this co-applicant must be someone with a good credit score and a decent monthly income. CIBIL score ranges between 300 and 900, calculated based on various factors such as the history of loans availed and repaid by the applicant. The higher the CIBIL score, the higher the chances of the individual getting a Home Loan. Click here to check your free CIBIL Score and Report and ensure that your credit history and personal details are in order so as to avoid rejection from the lender.

How CIBIL Score Has an Impact on Your Home Loan Application?

It will improve your chances of getting a home loan quickly. If you want to apply for a loan and avoid the prospect of rejection, then you need to know the importance of a CIBIL™ score in the loan-approval process. Lastly, with a good CIBIL score, it becomes possible for a borrower to get a loan for a longer tenor. This is a big advantage as a long tenor allows one to repay the loan comfortably and brings with it great peace of mind. A good CIBIL score ensures quick approval and also increases one's chances of getting a high-value loan.

EMI to Income Ratio – Borrowers have a higher chance of securing a loan with an EMI that is not more than about 50% of his/her monthly income. This will be lower if the borrower already has other loans to be repaid. Check your credit report before applying for a loan to ensure there are no errors or omission of transactions. If you find inaccuracies or frauds, get it rectified by raising a CIBIL dispute before you apply for a home loan.

Home Loan Eligibility: What you Need to Know About your CIBIL Score?

Focus on a balanced number of unsecured and secured loans instead of juggling between way too many unsecured loans. If the borrower defaults in paying dues on time, it will not only affect your records but you might also have to pay the debt on his/her behalf. CreditMantri will never ask you to make a payment anywhere outside the secure CreditMantri website.

Find below a few effective ways that you can use to increase your CIBIL Score in no time. For instance, as of August 2022, DHFL charges a minimum interest rate of 10.50% on Home Loans; while the State Bank of India charges a minimum interest rate of 8.40% per annum. Interest rates can also be partly fixed or partly floating, suiting the needs of the borrower.

How to Calculate Home Loan EMI

CIBIL™ is one of the four authorized credit bureaus in India which provide a credit score, the others being Equifax, Experian and CRIF High Mark. If your credit score has gone down due to an error, get your report rectified immediately. As a potential Home Loan applicant, you must now be wondering how to calculate CIBIL score for Home Loans? There are many online websites that give you your credit score within seconds, based on the information provided by you. You can use one of these websites to check your CIBIL score.

"Also, as long as you have outstanding debt, it’s unlikely any lender would provide you with any form of credit," she said. Below is a list of a few documents required for SBI Home Loan. Avoid frequent job changes as changing too many jobs in too little time portrays you as a risky borrower. The minimum CIBIL Score that a borrower generally needs to maintain to be easily eligible for a loan is 750.

How to Check CIBIL Score

CIBIL evaluates your payment history, credit handling trends, and existing banking to arrive at a final score. However, this entirely depends on the lender’s policy and it may be better to check with the lender before applying. Besides the credit score and other factors of the applicant, various parameters of the property are also considered by the lenders while granting a Home Loan. Keep reading to know more about how CIBIL score plays a critical role in getting a home loan approved.

Furthermore, banks may not approve your loan application and even reduce your credit card limits. These are some of the benefits you will experience if your credit report is good. However, what should a borrower do if their credit rating is not so good?

Minimum CIBIL Score Required for Home Loan

Lenders sanction up to 80% to 90% of a property's value as a Home Loan. The remaining amount, known as the down payment, must be paid by the borrower. When you make a higher down payment, you reduce the risk involved for the lender in lending you money and therefore, increase your Home Loan eligibility. On filling the form, you will be taken to the payments page. You can choose from multiple modes of payment to get your credit report. Although it is possible to get a home loan with a credit score of 690, you must try and achieve a score of 700 or above.

If you feel you might miss out on the payment of dues inadvertently, opt for an auto-debit. This will give your lender the mandate to debit the monthly loan from your account on a fixed date every month. Remember to maintain the necessary balance in your account on the pre-determined date, so you are not charged a heavy interest due to the unsuccessful auto-debit process. Your score is the result of complex mathematical calculations based on the information about your credit history recorded in CIBIL’s database. This information also gets reflected in the Credit Information Report or CIR of every loan applicant. CIBIL has been authorised by the RBI and is governed by Credit Information Companies Act, 2005.

When you are choosing a home loan product, the CIBIL score is highly significant. This is why loan officers instruct customers to download the credit report for checking whether they are eligible to opt for a loan. When the credit score is high, all the odds are in your favour in ensuring you avail a home loan product. With a satisfactory CIBIL score and a clean credit history, you can bargain some of the fees to be lowered down. A low score adversely affects your eligibility to get a loan.

Generally, a score below 600 is considered low by home loan lenders. However, the CIBIL score eligibility may vary from lender to lender. CIBIL Score is the most accepted credit score in India granted to individuals and businesses, which represents the creditworthiness of the Home Loan applicant. CIBIL Rank is a numerical summary of your CCR and Company Credit Report is the record of your company's credit history. Your loan repayment capacity is a critical factor of consideration while underwriting your HDFC Home Loan application.