Good Credit Score can get you Cheaper Home Loan
Nov 09, 2019 Home Loan
The times when the banks were eager to give out home loans to every loan applicant are gone. The assumption that more home loans will, in turn, imply the growth of the economy has backfired and is currently the reason for the crisis the banking sector is going through.
This has triggered the banks to make their laws stricter. The banks are now more diligent when giving out home loans. If your credit score is below 300, then you may not even get a home loan.
The credit score is a basis through which the banks decide whether to give out the home loan to the applicant or not. The credit score can be between 300 to 900. The score above 750 is regarded as a credible credit score and the applicant can get the loan approved quickly without any hassle.
A good credit score implies that the borrower has a good history of returning the borrowed money. It can also give the bank a clear idea of your financial health and spending- replaying habits. Several public and private sector banks have come to an agreement that they will approve the home loans based on the credit score given out by the CIBIL. If your credit score is very good there are good chances that you will be able to negotiate a good interest rate for your home loan.
However, there are many areas that the banks look into to decide whether the applicant is a genuine buyer or not. Your job profile, income, past financial and tax payment habits and credit history all are taken into account by the bank.
A home loan borrower with a credit score between 760 to 900 can be given the home loan at 8.1 percent by Bank of Baroda. For those with a credit score between 725 to 759 will be charged at 8.35 percent for the loan at Bank of Baroda while those with the credit score between 675 and 724 will have to pay the interest rate of 9.1 percent. The banks are not willing to give out the home loan to the applicants with the credit score below 675.
The Union Bank of India is offering home loans to borrowers with a credit score above 700 at 8.45 percent. those with the credit score below 700 can be charged home loans at 8.55 percent.
It is not only at the time of approving the home loan, that the banks look into your credit history. If at any point your credit score drops or your financial health deteriorates, the banks will hike your interest rate to recover their money as quickly as possible.
This has triggered the banks to make their laws stricter. The banks are now more diligent when giving out home loans. If your credit score is below 300, then you may not even get a home loan.
The credit score is a basis through which the banks decide whether to give out the home loan to the applicant or not. The credit score can be between 300 to 900. The score above 750 is regarded as a credible credit score and the applicant can get the loan approved quickly without any hassle.
A good credit score implies that the borrower has a good history of returning the borrowed money. It can also give the bank a clear idea of your financial health and spending- replaying habits. Several public and private sector banks have come to an agreement that they will approve the home loans based on the credit score given out by the CIBIL. If your credit score is very good there are good chances that you will be able to negotiate a good interest rate for your home loan.
However, there are many areas that the banks look into to decide whether the applicant is a genuine buyer or not. Your job profile, income, past financial and tax payment habits and credit history all are taken into account by the bank.
A home loan borrower with a credit score between 760 to 900 can be given the home loan at 8.1 percent by Bank of Baroda. For those with a credit score between 725 to 759 will be charged at 8.35 percent for the loan at Bank of Baroda while those with the credit score between 675 and 724 will have to pay the interest rate of 9.1 percent. The banks are not willing to give out the home loan to the applicants with the credit score below 675.
The Union Bank of India is offering home loans to borrowers with a credit score above 700 at 8.45 percent. those with the credit score below 700 can be charged home loans at 8.55 percent.
It is not only at the time of approving the home loan, that the banks look into your credit history. If at any point your credit score drops or your financial health deteriorates, the banks will hike your interest rate to recover their money as quickly as possible.
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