What is a good CIBIL score range for a home loan?

The score assesses your ability to meet financial obligations as a person or a business. In addition, the CIBIL score analyses historical trends in credit utilisation and loan repayment behaviour to provide valuable insights into your credit history. Having a high online CIBIL score, on the other hand, does not guarantee that lenders would lend you money the moment you apply. To establish your ability to repay, they will look at your financial holdings as well as your sources of income. 

Although there is no common minimum credit score for house loans, each bank has a cut-off point for accepting or rejecting applications. A credit score of 750 or higher, also known as a CIBIL score, is generally considered desirable for home loan approval.

What impact does your CIBIL score have on your home loan application?

Your CIBIL score is one of the most crucial factors used to determine whether or not you qualify for a house loan. It is crucial in the processing of mortgage applications. In fact, your CIBIL score is the first item that banks look at when processing your loan application. If you have a poor credit history or a low credit score, your application is unlikely to be approved.

This is the standard screening procedure used by all banks to weed out ineligible applicants.

Having a solid credit history and even a good credit score can help expedite the home loan application process. Applications with a good credit score are processed faster than those with a poor credit score. Although there is no globally acknowledged credit score for processing applications, a credit score of 750 or more is considered to be good. A credit score of 350 to 750 is regarded as good, while a score of less than 350 is considered terrible.

Having a CIBIL score of 750 or higher has a number of ramifications.

A CIBIL score of 750 or higher speeds up the loan application procedure and makes you eligible for a larger loan amount and cheaper interest rate from a wider choice of lenders. The loan is processed quickly, and the cash is deposited into your bank account. The higher your credit score, the more likely you are to get approved for a greater loan amount and a lower interest rate on a home loan.

The following factors influence the size of a home loan:

If you have a strong credit score, you can get a bigger loan with a lower interest rate, which you won’t be able to get if you have a bad credit score. In fact, if you have a negative credit score, lenders will offer you a lower loan balance than usual.

Last Thoughts

As a result, if you’ve always desired to buy a home, working on raising your creditworthiness or CIBIL score is always a good idea, as it will eventually lead to the best home loan for you and your family. If you feel that a decent CIBIL score is not essential because a home loan is a secured loan, you are drastically mistaken. You will always find it easier to obtain both secured and unsecured loans if you have a good credit score. It indicates that the consumer is trustworthy and has a good ability to repay his bills on time.

Late repayment of current debts, excessive use of credit cards, late payment of credit card bills, and other factors can all contribute to a low CIBIL score. If your CIBIL score is low, your loan application is more likely to be denied. You should not reapply if you are rejected because it would lower your score. Instead, focus on how to improve CIBIL score by paying your current EMIs on time, minimising your credit usage, and paying off other debts. Many third-party lenders offer free CIBIL scores to their customers.

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