CIBIL Score: If you are going to take a home loan from the bank, know what your CIBIL score should be..

Home Loan Cibil Score: The Reserve Bank of India has recently cut the repo rate by 25 basis points, which is expected to reduce home loan interest rates. Although banks have not made any announcement yet, they are likely to reduce their home loan interest rate soon. This will provide relief to loan customers in their EMI.

Should you take a home loan now?

If you are thinking of taking a home loan to buy a new house, then it may be beneficial to wait a bit. Usually, it takes some time for banks to pass on the benefit of interest rate cuts to customers. So in a few weeks, the bank may announce a reduction in the interest rate. Then later you will be able to get a loan at a lower interest rate.

How important is a credit score for a home loan?

A credit score is most important for a home loan. It reflects your good financial management, based on which banks do your loan eligibility. Usually, a score of 650 to 700 is required, but having a score of 750 or more increases your chances of getting a loan at a lower interest rate.

Chances of loan approval based on credit score-

More than 750 - Easy loan approval and low interest rate.

700 to 749 - There is a good chance of getting a loan, but the interest rate may be a little high.

650 to 699 - A loan can be obtained, but the terms will be strict and the interest rate will be high.

Less than 650 - Difficult to get a loan, the bank may ask for a co-applicant or a higher down payment.

How to increase the chances of getting a home loan?

Improve credit score - If your credit score is low, keep these things in mind to improve it.

By paying EMI and credit card bills on time, you can maintain a good CIBIL score. Do not use a credit card for more than 30% of your limit. Avoid taking multiple loans at once, as this can hurt your CIBIL score. Check your CIBIL report regularly and get any mistakes corrected. Maintain a healthy balance between secured (such as home/auto loans) and unsecured (such as credit cards) loans.

Make a higher down payment-

If you can make a down payment of 20-30 percent, the bank will easily give you a loan and the interest rate may also be low.

Apply with a co-applicant-

If your credit score is low, you can apply for a loan with your spouse or a family member, which will increase the chances of getting approval.

Take a loan for a longer period-

If you keep the loan period for 20-25 years, your EMI will be reduced, which will give the bank more confidence in your ability to repay the loan.

Show regular income source-

Banks give preference to those applicants who have a stable job or a regular source of income. If you are salaried, then submit documents like salary slips, bank statements and income tax return.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.