A CIBIL score indicates the creditworthiness of an individual. It is prepared by the Credit Information Bureau of India Limited (CIBIL) based on a person’s financial history. The minimum CIBIL score for securing a home loan in 2022 ranges from 700 to 750. A good CIBIL score is the primary criteria for banks to clear an application for a home loan.
The closer the CIBIL score is to 900, the higher the chance of getting a home loan approval. This article will look at the minimum CIBIL score for a home loan.
Minimum CIBIL Score For A Home Loan
The CIBIL score determines a borrower’s eligibility for a home loan. minimum CIBIL score for a home loan is indicative of your repayment capability and makes you an eligible applicant. As a result, the home loan is approved faster.
A CIBIL score between 300 and 549 is rated poor, and the application is instantly rejected. A CIBIL score of 550 to 649 is considered average, and the applicant scrapes through if other loan criteria are fulfilled.
Some banks are okay with a minimum CIBIL score of 650. But a minimum CIBIL score of 750 or more is considered ideal for a home loan. Lenders acknowledge a CIBIL score between 700 and 750 to be good. A score higher than 750 gives the applicant the power to seek the best possible terms.
A CIBIL of over 750 increases the chances of securing a home loan. Your loan will be processed earlier than usual, and you’ll be offered the best terms, including lower interest.
Checking Home Loan CIBIL Score
You can check the CIBIL score for the first time for free. Subsequent checks will cost a certain amount of money.
Here’s how you can check the CIBIL credit score:
- Open CIBIL TransUnion’s website and log in
- Click on ‘Get your CIBIL score’
- Choose a subscription plan; when you opt for a paid subscription or membership, you can keep monitoring your credit score as often as you need to
The applicant will have to provide a range of personal information such as name, email address, phone number, address, PIN, etc. In addition, you will also be asked to submit ID proof, Aadhaar, and PAN cards. After entering the OTP, the applicant will be able to access their CIBIL score and credit report.
CIBIL Score For Home Loans
The CIBIL score is the most important determinant of a home loan eligibility. This score decides whether the loan application sails through without a hitch or gets stalled.
The home loan is, by definition, long-term. The repayment tenure can stretch for up to three decades. That makes it risky for banks, which calls for a note of caution. This is why banks and other financial institutions insist on a good CIBIL score. It indicates your ability to repay the loan properly and on time.
A good CIBIL score also makes you eligible for a high-value loan with lower interest rates.
Figuring out your repayment capability beforehand by using an online home loan calculator, which is usually available free of cost on lenders’ websites, is a good idea.
Benefits Of High CIBIL Score
There are many benefits of a high credit score:
- Loan approval gets easier
- The applicant can get the best home loan terms, including good interest rates, lower processing charges, and longer repayment tenure.
- A high credit score gives the borrower access to other bank products, like the personal loan and the bank’s credit card
- Special offers, including discounts on other loans, can also be availed
A credit score between 650- 750 is good for securing a home loan. However, it may vary from bank to bank.
Improving CIBIL Score
A poor or average CIBIL can be turned into a winning score, thereby increasing the chances of loan approval. Here’s how credit scores can be improved:
- Pay your dues within the specified deadline
- Maintain a low credit use ratio
- Don’t overdo taking new credits
- Monitor CIBIL score regularly
- Keep a healthy balance between secured loans and unsecured loans
- Don’t apply for loans simultaneously from multiple banks
- Repay EMIs in full and on time
A good CIBIL score makes you eligible for a high-value loan with lower interest rates.
It is possible to avail of home loans without a CIBIL score from cooperative banks, but the rate of interest on such loans is much higher, so it is better to build a good credit score and apply the usual way.
Banks are happy to service home loan applicants with a good CIBIL score as they are considered safe bets. Not only are the home loan applications cleared quickly, but the terms of the home loan are also favorable.
The minimum credit score eligible for a home loan ranges from 700 to 750. A co-applicant with a high CIBIL can help secure a quicker home loan approval.
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