Your CIBIL score indicates your current as well as past financial situation. If the score is good, it can be beneficial when you’re trying to buy a home in India.
A good credit score means that you’ve demonstrated responsible money management over time, and you’re less likely to default on the loan payments or walk away from the house if things get complicated. Therefore, a good Cibil score for a home loan is one of the essential requirements in India.
The body responsible for issuing credit scores in India is the Credit Information Bureau India Limited (CIBIL). The credit score will determine whether or not you will comfortably get approval for the home loan in India.
Scroll through the article to learn more about how a good CIBIL score for a home loan is vital for getting quick loan approval and getting the loan amount at a low-interest rate.
Get Home Loan at Low-Interest Rates
A good CIBIL score is necessary to get a home loan at a low-interest rate. The home loan interest rate today is different from bank to bank. Also, it differs according to other factors like your income, age, employment status, tenure with your present employer, and many more.
If you have pending credit card bills and possess a bad credit history or no credit history in India, it would be hard for you to get bank finance or avail of loans at reasonable interest rates.
But with a good CIBIL score for home loan, banks would consider your application carefully and process it faster than others.
Makes You Eligible For The Home Loan
Even if you have adequate income to afford a home loan, your application may be rejected if you don’t have a good credit score. The primary reason behind asking for your credit score when you apply for a home loan is that your scores impact how much money banks are willing to lend you.
If your scores are low (under 600), lenders will likely charge more interest or deny your request.
If they’re high (over 750), though, they may reward you with lower interest rates and better terms on your loan—potentially saving you thousands of rupees over time.
Helps in Quick Approval
People in India don’t realize how important their credit score is to getting approved for certain loans. However, if you’re looking to apply for home loans in India, it might be time to pay close attention.
Typically, most banks and other lending institutions that provide mortgages or loans will require your credit score above 700-750 to be considered a viable candidate.
A good credit score offers excellent deals on home loan interest rate today, and eases the home loan approval process.
Helps Secure Large Loan Amount
Most banks and mortgage companies check your credit score when you apply for a loan to buy your home. Their primary goal is to offer you an amount of money you can repay comfortably—not one that’s so large that you struggle to pay it back each month.
You’ll qualify for a larger loan with an excellent credit score and can often receive better interest rates than people with lower scores.
Your credit or CIBIL score is an important number that lenders use to determine whether or not you qualify for a loan. It consists of different categories—like how much debt you have and how frequently you pay your bills. A good credit score will generally be at least 700, but if yours falls below that level, it could hamper your chances of getting approved when applying for a home loan. Plus, a low Cibil score results in high-interest rates and immense EMIs.