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A Simple Guide to CIBIL Score for Home Loans

OWN HOME is a dream for a middle-class family. Most of the middle class cannot afford their own homes due to a surplus of cash, higher plot rate, and bank policies. With help of a bank loan that would be close to your dream.

Does CIBIL matter for Home Loan?

If you think buying a home or land with the financial help of bank CIBIL would be very important. If you have a question does CIBIL score affect loan eligibility? The answer is a YES.

If an applied person has a good CIBIL score, eligibility becomes easy and the loan gets easily approved. Based upon salary and your previous loan settlement process will decide the CIBIL value. Between 720 and 750 decent scores for the loan process. This score will be creditworthy and the lender approves your loan process so easy.

CIBIL will calculate according to the financial process. It’s a 3 digit number ranging from 300-900 it calculated by Trans Union CIBIL Credit Bureau. They have some factors for calculation CIBIL.

Tips to Improve CIBIL Score

A low CIBIL score made an end to the borrowing journey. So borrower should be focused on CIBIL let us see some tips to improve CIBIL score:

1.        Pay Dues on Time

Making the payment on time will show that financially responsible to the lenders.  It’s important to have a good record of old account transactions.

2.        Maintain Balance Credit

Credit should have a variety of balanced credit secured as well unsecured. If the borrower has too many unsecured loans. That will reflect a poor record on CIBIL.

3.        Balance Utilisation

Make your credit bill on time. Paying bills on time proves to lenders responsible for the utilization of credit. If a person has too many credit cards that will lead to an obligation to lenders.

Types of Interest Rate by Banks

The financial institution offers two types of interest rates:

1. Fixed Interest rate

2. Floating Interest rate

Fixed-rate: This policy is a fixed rate for the entire loan process and this offers a fixed EMI process for the entire duration of the loan.

Floating rate: This policy is differing according to the market condition. Rate is differing as to the market condition.

Eligibility for loan

Loan eligibility criteria vary according to the financial lenders. Let’s discuss some common features:

1.        Candidate be a salaried person or business person

2.        Candidate age should be 21 years.

3.        Income source be a steady and good work history

4.        Lender will check a CIBIL score for approving the loan application.

5.        Lender will check the bank statement and good records with a bank.

Clash of COVID-19 on the home loan market

The pandemic days are still extending cash flows highly affected millions of people around the country. Most people are focused on buying loans for their needs. In this time credit and CIBIL have taken a hit.

Because of the pandemic, people are spending more time on their homes, most of them looking for changes and upgrades in their settle spaces. In this pandemic time, RBI policy changes for home loan rates and have made some relaxations charges as well. All these factors made people invest in real estate and this is a good time to invest mainly in real estate.