Just the way a perfect home weathers all kinds of seasonal changes, a home loan too stands up and down in interest rates. Home loans are typically meant for the long haul. Being long-tenured products, these come with built-in flexibilities and other features for the borrowers.
Once you identify a suitable property, the next step is to shortlist ideal lenders and home loan schemes, given the wide variety of schemes and loan variants on offer. If you plan to purchase your house in the future, be sure of how you develop your CIBIL Score today. The reason being, your credit card swipe and repayment history goes into building a CIBIL score for you. Unlike other loans, you are stuck with home loans for a longer period of time—10-20 years—which means that your strategy to service the loan cannot be static through the tenure.
To get the lowest interest rate, you need a good CIBIL score. It will be the biggest factor in determining your interest rate.
Just a half point difference can have a huge impact on your loan repayment.
A CIBIL score provided by CIBIL is a three-digit TransUnion score which is derived from the credit history found in credit information report (CIR). A CIR is an individual's credit payment history across loan types and credit institutions over a period of time. It ranges between 300 and 900. It indicates the probability of default of a borrower based on their credit history.
To maintain a healthy CIBIL score, one should ensure timely dues payment and avoid taking too many unsecured loans as it may be considered negative. But if the damage is already done, you can work towards improving it slowly.
Cibil Score For SBI Home Loan
If you want your sbi home loan to be approved, besides eligibility and selected property, your CIBIL score will be of much help for quick sanction or the same. CIBIL score is the credit reliability of an individual. CIBIL score stands or CIBIL score of a person and that displays the authenticity of a borrower in terms of repayment of loan.
In addition to your eligibility for your loan, banks also check your CIBIL score. For this purpose, lenders contact CIBIL, and depending on your score and some other parameters, the bank may or may not process your home loan request.
An acceptable CIBIL score for SBI home loan usually starts from 700 upwards. As the score tends to be closer to 850 and more, you will earn better scale of reliability from credit institution that you are capable to repay your home loan with enhanced eligibility. Good CIBIL score is one of the ways to get home loan up to 85% of your property value.
CIBIL score is used by SBI bank to evaluate credibility of an individual for repaying the loan. When an applicant submits his application, the bank checks the CIBIL score of that individual. CIBIL score consists of credit history and CIBIL score. When CIBIL score is found low and there is bad credit history, the loan application mostly gets rejected.
However, good CIBIL score and positive credit history is not the factor that makes an application through. Rather, positive CIBIL score makes an application eligible for sanction and it processes the loan application in further level. There is no specific score designated for getting home loan sanctioned, however A-category banks prefer to have 750 and above score good for sanctioning the home loan and 350 or below as negative profile.
To understand how firm CIBIL score requirements are, it helps to take a step back and first talk a bit about how the Banking industry operates.
That’s where minimum CIBIL score requirements for SBI home loans come into play. A Bank could accept a CIBIL score of 700-750 for a Home loan.
Your CIBIL score affects more than just loan approval. It also affects terms.
Your CIBIL score could likely dictate your loan interest rate, for one thin.. Generally, the lower your CIBIL score, the higher the interest rate, because Bank view borrowers with a low CIBIL score as higher-risk — that is, they’re seen as more likely to miss loan payments or even slide into default. So such customers may be charged a higher rate to compensate for that perceived greater risk.
By following a few tips you can use your CIBIL score for sanctioning your opted home loan. These are:
Check the CIBIL score before applying
Know your CIBIL score before applying for a home loan so that your credit history and personal details are in order to avoid the risk of rejection from bank. You may buy your credit report online from the CIBIL site by paying a nominal amount of Rs.560.
Stop applying repeatedly:
If your CIBIL score is found lower than benchmark and your home loan application gets rejected by a particular bank, don’t apply further. This may decrease your CIBIL score as different banks raising enquiries on an individual’s credit rating is observed with negative effect.
Limit your unsecured loans:
Try to close or limit you unsecured loans such as personals loans and credit cards with high credit limits. These loans are indicators of outstanding debt. Banks calculate and take in consideration debt to income (DTI) ratio before sanctioning a home loan. A higher DTI indicates that you are unable to invest your complete eligibility due to over burden of other loans.
What should be the CIBIL score for SBI home loan?
While a CIBIL score of 750 is deemed to be a good credit score and is presumed to be threshold for getting approved on a loan but that may not hold good in all cases.
In India the underwriting process still does not give a lot of weightage to the score, especially in case of the large ticket size loan products. The overall credit profile holds importance and would impact the outcome of loan application.
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