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Thursday, October 22, 2020

CIBIL Score: Minimum Credit Score for Home Loan | PNB Housing Finance

 


The concept of minimum credit score for getting a home loan isn’t a straightforward figure but an accretion of several important factors. Besides, if you are really interested in learning about the minimum CIBIL score requirements for a loan application, it necessary to understand a bit more about the impact and evaluative facets of the same.

 

Why is Credit Score necessary for Home Loans?

 

Regardless of the loan you opt for, financial institutions evaluate your standing and eligibility by taking a closer look at your credit score. A good credit profile identifies you as a credible borrower and projects your financial legitimacy infront of the lenders. Therefore, if and when you apply for a home loan, your CIBIL score comes under the scanner.

 

What is the Minimum CIBIL Score in India for Home Loan Eligibility?

 

Banks, NBFCs, and HFCs have stringent policies in place when it comes to sanctioning home loans for individuals with CIBIL score lower than 650. In most cases, the 650 to 749 is the permissible limit for lenders to approve home loans.

 

However, the CIBIL score isn’t the only metric to factor in as lenders even take your financial history, liabilities, and existing repayment histories, if any, into account. Moreover, while 650 seems to be the lowest point, banks are usually hesitant while offering home loans for CIBIL score lower than 750. 

 

Impact of Lower CIBIL Score in India

 

While you can always approach financial lenders for home loans despite lower CIBIL scores, here are some of the considerations you need to make for increasing your chances of getting a new house:

 

  • Higher interest rates
  • Checking with multiple lenders
  • Considering co-applicants
  • Opt for Loan against Property
  • Wait for the credit score to improve

Is Low CIBIL Score the only deterrent?

 

If you can locate a good housing finance corporation like PNB Housing Finance for your home loan, you would be amazed to see that they hardly consider the CIBIL score as an important factor. For them, the existing and prospective financial standing is the more relevant considerations. While a house loan calculator might reveal that you need to pay some additional amount due to the slightly higher interest rate offered by the HFC, the minimum CIBIL score cliché will hardly be a deterrent.

 

Moreover, you might need to fix your existing payment history, minimize credit utilization, and even hold on to a steady career opportunity to improve your chances of getting a home loan. However, you still need to maintain a steady credit score of at least 650 to further strengthen eligibility.

 

How to Scale beyond these Challenges?

 

A minimum credit score isn’t a set factor that guarantees loan approval. Instead, it is more of a deciding factor that ensures that lenders will give some attention to your application. Moreover, if you are worried that a low credit score might hamper your loan approval chances, consider putting forth a joint application. This approach ensures that the co-applicants’ credit score is taken into account, and you get a breather of sorts.

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