Impact of CIBIL Score on Home Loan Eligibility

To check the creditworthiness of credit applicants or borrowers, CIBIL scores are used by banks or lenders. A 750 and above CIBIL score is considered very fine. It is a credit score provided by CIBIL to demonstrate the creditworthiness of an individual based on past credit history. Such information will help borrowers evaluate applications for loans.

Anyone who wants an approved loan must be mindful that the CIBIL score plays an important role in securing favorable approval.

Let’s think about how the CIBIL Score decides your eligibility for home loans:

• Defines your credit health: Evaluating your creditworthiness gives lenders an idea of the ability to pay off your debt on a home loan. A high CIBIL score gives them some confidence that you can repay the home loan within the prescribed time. On the other hand, a low score is evidence of poor credit history and makes the lender sceptical about your ability to repay the loan. A low score, however, reduces your chances of being eligible for a loan but does not completely negate the chances. These loans are given at a lower amount and a high-interest rate, together with many terms and conditions.
• CIBIL Score Implications: A good score of 750 and above accelerates the loan process and makes you qualify from a wider range of lenders for a higher loan amount and a higher interest rate. The loan is approved and in a short time, the loan amount will be disbursed into your account. The higher the score, the more eligible you are for a home loan with a better loan amount and a lower rate of interest.
• Specifies the house loan interest rate: You’ll be able to negotiate with lenders to reduce the interest rate with a good CIBIL score. Also, a large number of lenders would like to offer a home loan with a good credit history, allowing you to choose the one which is the best deal for you. A low score, on the other hand, not only decreases the chances of being approved for a home loan, but it also eliminates your chances of negotiating the sum of loan and interest rate. It does not, in essence, leave you with an option but to accept the low loan amount and the high-interest rate that the lender is offering.
• Determines the home loan amount: A good score helps you to get a higher loan amount because you can order the lower rate that would not be possible if you had a lower score. If you have a low score compared to what they normally do, investors will offer lower loan rates.

The first impression of the home loan applicant is the credit score. CIBIL does not determine if any representing documents on the credit information report are to be approved or can withdraw the loan or credit card. CIBIL is here just to assist borrowers and applicants in making an informed decision. The score of CIBIL varies 300 to 900. It is known that the loan providers prefer the credit score higher than 750.

Payme India helps people to purchase their first residence or build their dream home. We are delivering a high level of service and tailoring home loan solutions that make a difference in the lives of our clients.

Posted by:Admin   30-11-2019