If you are planning to get a loan to build or renovate your house, getting a loan is highly recommended to avoid financial distress. However, there are quite a few things the lender considers before granting the loan, and a credit score is crucial.
In this article, you will learn how maintaining a good credit score makes approval for home loans easy, how much cibil score required for home loan to obtain as an applicant for easy approval, how you can improve your credit score, and more.
Benefits of a Good Credit Score
Having a good credit score is crucial for a home loan. Good credit or CIBIL score will not only help you get a home loan quickly, but you will also get plenty of benefits. Here are some of the benefits of maintaining a good credit score:
- You attain more negotiating power with the loan provider.
- You stand a chance to obtain a nominal rate of interest for a home loan.
- You can avail a higher sanction of home loan.
- The loans you apply for getting disbursed shortly after approval
What Is the Minimum Score Required to Get a Loan?
Each lender has a specific cut-off point for credit scores, even though there is no universally accepted minimum credit score. Most lenders consider 700 a good score for approval of a home loan. Keep reading to find out how much CIBIL score is required for home loan.
If your score is between 750 to 900-
CIBIL score above 750 is considered a good credit score for most lenders. Applicants with a credit score above 750 get approved quickly, and the process of approval is also very quick. Plus, they also get the chance to negotiate for a better interest rate.
If your score is between 600 to 749-
CIBIL scores between 600 to 749 are considered average for lenders. Applicants can still get home loans with such credit scores if other factors, such as income, bank balance, etc., are okay.
The process of approval generally takes longer in this case, and the applicant does not get the chance to get the best rate of interest. However, some lenders consider CIBIL scores above 700 a good score. So, if you are searching for home loans with a low-interest rate and flexible tenure, Fullerton Grihashakti Home Loan is something you must consider. Your credit score needs to be 700 or above for this home loan.
If your score is between 300 to 599-
Loan applicants with credit scores less than 599 have very low chances of getting home loans. But some lenders will consider the other factors and agree to give you a home loan with low amounts and a high-interest rate.
Tips to Improve Credit Score
If you own a credit card, but your credit score is too low, here are some ways you can increase your credit score before applying for a home loan:
1. Pay Your Dues on Time
The first thing you can do to improve your CIBIL score is pay the entire amount of your dues on time. Even the partly made payments are recorded as overdue, so it’s highly recommended to pay off all the dues fully.
2. Try Not to Use your Entire Credit Limit
Regularly check your credit utilisation and ensure that your outstanding balance is low to improve your credit score.
3. Regularly Monitor Your Accounts
Check both your single and joint accounts regularly to see whether any payment is missed before the month-end or not. If any, try to make the payment as soon as possible to keep a good record.
Ways to Get Home Loan with a Low Credit Score
It’s possible to get a home loan even if you have a low CIBIL score or no credit history. In general, loan applicants try to improve their scores before they apply for a home loan. But if that’s not an option for you, here are some ways to get the loan.
Find Co-applicant for the Home Loan
Applying for a home loan with a co-applicant will increase your chances of getting the loan, especially if you have a good credit score.
Show Proof of Your Stable Income as well as Bank Balance to Lender:
By showing your stable income statement and bank balance to the lender, you can earn their trust and assure them that you can pay the monthly installments of the home loan without hassle.
Go for Lower Loan Amount:
When you apply for a lower amount for a home loan and pay a high sum of money as a down payment, the risk of the lender gets lower. This way, you can quickly get the loan and assure the lender that you can pay the installments without fail.
Keep in mind that the home loan approvals depend on a few other factors and the lender as well. The tips mentioned above might not assure loan approval for many lenders. In that case, you can work on the aforementioned factors and try searching for other lenders that do not prioritize credit scores as much.
Conclusion
Credit score plays a pivotal role in approving home loans and all the other kinds of loans. So, if you want to apply for Grihashakti home loan, try to maintain a good credit score to get a smooth and hassle-free home buying experience.
