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You could ask your lender to send you monthly updates regarding the status of the loan and payments. CIBIL score, denoted by a three-digit number, reflects the borrower’s credit profile and a summary of his/her credit history. On the other hand, the CIBIL report by the Credit Bureau is a compilation of all the credit-related activities of individuals/companies. If you have a moderate CIBIL score, you may find it a little difficult to repay the loan amount on time. But if you are given the option to pay through EMI, the payment will be automatically deducted from the bank account per month. Always clear due payments on time and leave the habit of paying in instalments behind.
However, they may offer you a plan after going through your other financial details and eligibility parameters. As you may have understood by now, CIBIL score plays a huge role in securing a housing loan. In case your credit score is not up to the mark, no need to fret and worry. By following certain financial discipline, you can easily improve the credit score record and make yourself eligible for the loan.
Work on Your Credit Score
Based on the information collected, CIBIL calculates the credit score for each individual. They believe that if your record states that you are not good at repayments, then it becomes quite difficult for them to approve your loans further. Increasing your home loan eligibility means improving your credit score. If your score is good then the chances of approval become higher & even the process becomes smooth. Home Loan is the sum of money borrowed from a bank or a financial institution to purchase or construct a house.
CIBIL will notify you about your existing score through an email within 24 hours. Make sure you read the loan document thoroughly and clear your doubts before signing on the dotted line, so prevent yourself from getting caught unaware in the future. If authentication fails, you can fill and send a hard copy of the application to CIBIL by mail. CreditMantri is India’s No. 1 site for Credit Analysis and Free Credit Score Online.
Significance of CIBIL Score For Home Loan
Now, while approving one’s home loan application SBI evaluates several factors and one of the most important ones among them is CIBIL score. As already mentioned, having a good CIBIL score will ensure that you secure a home loan easily without facing any kind of obstructions. Apart from that, SBI will go through your entire credit report inclusive of your past loans, repayment history, etc. There is no separate defaulters list with the banks or credit bodies. Rather, credit companies maintain data about your repayment performance on the credit of all sorts.
"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.
Factors that Affect your CIBIL Score
Now that you know how to increase your CIBIL Score, start working on it today. Make sure you have a good credit score when applying for a home loan. A credit score or CIBIL score plays a crucial role in determining the approval/rejection of your home loan application. The first thing the bank checks is your credit score as this gives them an idea about your credit worthiness. Generally, rejection is faced when the cibil score is less as it shows that you have a bad credit history. However, the most common good score is considered above 750 and less than 750 is regarded as a bad credit score.
You will have more options and can pick and choose as you will be eligible for loans from different lenders. In case you do not want to do the above, consider applying for a loan with a co-applicant. This will improve your chances of getting a home loan quickly. According to Amit Gupta - MD, SAG Infotech - a low CIBIL score indicates that you are a high-risk borrower and it can affect your ability to get new credit. Check accounts daily and monitor the financial transactions.
So, it’s always desirable to have a higher CIBIL score in terms of the upper limit. If you or a loved one needs a home loan, then reach out to Tata Capital today. You can avail reliable consultation on your financing options, as well as your CIBIL score. Also, you can take advantage of Tata Capital’s competitive interest rates, multiple financing options, and flexible repayment options. The CIBIL score is a measure of your ability to repay loans.
If you have a good CIBIL score, your chances of getting approved for a loan naturally increases. However, if you have a weak or poor CIBIL score, then even if you get approved for the loan, you may not attract reasonable interest rates or flexible home loan tenure. Having multiple loans at one time denotes hungry behavior, which is again considered to be a major red flag for lenders.
Also, check out how you can improve it and avail of a home loan without any hassle. If you have a good CIBIL score for a home loan, eligibility terms become simpler, and your application gets approved quickly. Lower scores imply risk, and lenders may have to tweak the loan offering accordingly.
CIBIL score plays a huge role in determining whether you are eligible for a home loan or not. Lenders keep an eye on your CIBIL score to understand and intercept the criteria of home loan eligibility of an individual. The minimum CIBIL score for a home loan in India varies across lenders.
Having said that, a low CIBIL score usually is a deterrent for many lenders to give a Home Loan, and you must try to increase your CIBIL Score. Some effective methods to improve your score include paying off all your debts, regularising your loan repayments, raising a credit repair request, etc. Keep reading to know more ways that can help you improve your credit score in no time.
However, the task of rebuilding the credit profile is a time-consuming task and the credit issues are too complex to handle. The professional companies can help you increase the credit score efficiently but beware of the unethical companies. Many of the companies promise an instant rise in the credit score but it is impossible to raise CIBIL score within a short term. In the meantime, you lose all options for securing a housing loan due to the irreversible financial damage.
Thus, applying to NBFCs for a Home Loan has a higher chance of the loan getting approved, than with banks. A score below 650 is considered high risk, and lenders may reject Home Loan to such applicants. Some nationalized or private banks may have a cut-off of 650, while some Non-Banking Financial Companies may be lenient and consider a score of 550 as the lower limit. 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.
If you have a lower CIBIL score and your co-applicant or guarantor has a CIBIL score above 750, then some banks may sanction the Home Loan applied. However, it is to be noted that this method is not guaranteed to get a Home Loan with a low CIBIL score. Such cases are rare, and it is up to the discretion of the bank to sanction a Home Loan where one of the applicants has a lower CIBIL score. Loan Against Property is for individuals seeking loan against an already existing property.
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