CIBIL Score is one of the most important factors that decide the fate of your loan application. Banks check your CIBIL Score as soon as they receive your loan application to determine your repaying capacity. CIBIL is one of the most accepted credit scores throughout the nation that represents the creditworthiness of the loan applicant. CIBIL Score is also among the most important eligibility factors that you need to qualify in order to obtain a home loan. A high CIBIL Score represents that the applicant is creditworthy and is less likely to default on the loan repayments. While an applicant with a low CIBIL Score, on the other hand, is considered a risky applicant as has fewer chance of receiving approval on his home loan application.
Usually, CIBIL Score ranges between 300 to 900 and is calculated after taking numerous factors into consideration. CIBIL Score is generally calculated after evaluating your previous repayment history and all your previous and ongoing loans. The higher your CIBIL Score, the more likely you are to obtain a home loan. Along with the CIBIL Score, there are various other factors that you should consider before applying for a home loan. It is advisable to use a home loan calculator before applying to check the eligibility criteria and apply accordingly to avoid rejection. Along with the factors mentioned above, there are multiple characteristics of the property that the banks consider when you apply for a home loan.
How Low is a "Low CIBIL Score"?
Usually, a CIBIL Score of 600 and below is considered a low CIBIL Score. However, the definition of a low CIBIL Score can vary from one lender to another. Banks usually approve loan applications that have a CIBIL Score of 700 or above. There is a certain eligibility criterion for every bank that the applicant needs to fulfill in order to obtain a home loan. Individuals that have a CIBIL Score between 650-700 are considered risky and might get approval on their home loan application. However, they might have to deal with lower loan amounts, higher interest rates, increased documentation, and higher loan processing charges. Whereas, applicants who have a CIBIL Score of more than 700 can easily get approval on their home loan applications.
The eligibility criteria or minimum CIBIL Score required for a home loan can vary from one bank to another. There are banks in the market that will approve your home loan application even if you have a CIBIL Score of 650. However, the majority of the public sector and private sector banks have a minimum CIBIL Score eligibility criteria of 650 and above. Also, it is advisable to check the official GroMo website to check your CIBIL Score free and then apply for a home loan to avoid rejection.
Home Loan with Low CIBIL Score
Now that you know about what a low CIBIL Score is and how it can have an impact on your home loan application. It is important for you to understand a few ways by which you can get a home loan. Some of the ways that you can use to get a home loan despite a low CIBIL Score are as follows:
1. Approach NBFCs
Banks have higher eligibility criteria or requirements for a minimum CIBIL Score of 650. However, NBFCs on the other hand might approve your home loan application even if you have a CIBIL Score of 550. NBFC stands for Non-Banking Financial Company and are financial institutions that grant loans to individuals similar to a bank. However, NBFC does not perform any other business like accepting deposits, fund transfers, payroll services, etc.
You can use the GroMo mobile app to learn more about some of the top NBFCs in India including Bajaj Finserv, Tata Capital, Muthoot Fincorp, HDB Financial Services, etc. Similarly, Housing Finance Company (HFC) is also a type of NBFC. However, HFC only deals in Housing Loans. If you have a low CIBIL Score then you can apply for a home loan in any of the leading NBFCs to obtain a home loan. Also, it is important to understand that the interest rates are generally higher in NBFC as compared to the home loan interest rates charged by banks.
2. Co-Applicant with Good CIBIL Score
If you have a low CIBIL Score, then you can apply for a home loan with a co-applicant that has a high CIBIL Score. This can boost your chances of obtaining a home loan. Moreover, it is a common practice to jointly apply for a home loan and improve your chances of loan approval. Also, it is important to have a co-applicant that has a high CIBIL and also who does not have a history of defaulting on loan repayments in the past. Moreover, there is no guarantee that your loan application would be approved and it is solely based on the bank’s decision on whether to approve or reject your home loan application.
3. Increase Your CIBIL Score
The last option is to improve your CIBIL Score and then apply for a home loan. Because applying for a home loan with a high CIBIL Score boosts your chances of getting loan approval. Also, a high CIBIL Score can enable you to take advantage of numerous benefits like a higher loan amount, lower interest rates, etc. Therefore, it is advisable to first take the necessary actions and tips to improve your CIBIL Score and then apply for a home loan to boost your chances of getting loan approval.
These are some of the common steps that you can use to apply for a home loan with low CIBIL Score. Moreover, you can download the GroMo app to learn more about CIBIL score and even conduct a free CIBIL Score check online. GroMo is one of the leading fintech apps in India that enables individuals to make money online by selling financial products to potential customers. You can download the GroMo app and register using your bank account and KYC details to become a GroMo Partner. After successful registration, you can select from the list of insurance and financial products and refer them to potential customers within and outside your social network to earn commissions on every successful conversion. Download the GroMo app now and learn how to earn money online without investment in mobile.
Can I get home loan with low CIBIL score?
It is most likely that the bank will reject your loan application if you apply with a low CIBIL Score. However, there are methods that you can try and get approval on your home loan application with a low CIBIL Score.
Which bank will not check CIBIL for home loan?
Usually, co operative banks do not check your CIBIL score and you can avail of a home loan without CIBIL Score.
What is the minimum CIBIL score for SBI home loan?
SBI has minimum eligibility criteria of 650 CIBIL Score in order to get approval on your home loan application. Moreover, there are other factors as well that can affect the eligibility for an SBI Home Loan.
How quickly can CIBIL score be improved?
There are multiple ways of improving your CIBIL Score. However, it can take anywhere around 4-12 months to build up a high CIBIL Score.
Can I raise my credit score in 30 days?
Yes, if you have a significantly low CIBIL Score then paying bills on time and using less of your available credit limit on cards can raise your credit in as little as 30 days.