How to get a home loan with a low CIBIL score?

Buying a house is a pivotal moment in one’s life, and so is a decision that requires careful thinking. However, with the property rates skyrocketing, you might need to rely on external financial assistance to buy a home for you and your family. If you want affordable home loan interest rates, you should ideally maintain a good CIBIL score, a three-digit number (between 300 to 900) that depicts your creditworthiness. The lender will assess your CIBIL score and accordingly approve/reject your home loan application. A high credit score means a high loan repayment ability. If you have a good CIBIL score, yourhome loan approval is easier. However, if you have a low CIBIL score (below 750), you might face difficulty in home loan approval.

If you want to make sure you get the home loan easily with a low CIBIL score, follow these simple suggestions:

1. Pay off credit liabilities: In most probability, you have a low credit score because of pending debt liabilities. If you pay off your past debts and stay clear on your dues, such as credit card bills, loan EMIs, utility bills, etc.,you can improve your CIBIL score and better your chances of getting a home loan.
2. Approach an NBFC: If you have a low credit score, it is better to approach a Non-Banking Financial Company (NBFC) for a loan rather than a mainstream bank. NBFCs are comparatively more flexible with credit scores and offer home loans at much lower cut-off CIBIL scores than banks. However, you may have to pay slightly higher home loan interest rates to secure a loan with a low CIBIL score. You can use an online home loan EMI calculator to precisely know the interest rates and payable EMIs on your loan from an NBFC.
3. Avail of a joint home loan: You can consider adding your spouse as a co-applicant in your home loan application if you have a low CIBIL score. However, for this to work, your spouse should have a good credit score.
4. Show evidence of income: With a low CIBIL score, lenders are more likely to approve your home loan if you give them substantial income proof that supports your ability to pay off the loan timely. You can provide salary slips, bank statements, additional income sources, etc. This will assure the lender that you are financially secure to repay the dues.
5. Opt for a secure home loan: If you have privately-owned property or valuable assets like gold, etc., you can use that as collateral to get a home loan with a low CIBIL score. Securing your loan against collateral increases your chances of getting the home loan at low home loan interest rates. Most NBFCs accept assets like property, gold, fixed deposits, etc., as collateral for a home loan.

Conclusion

It is possible to get a home loan with a low CIBIL score. However, be careful about a few factors, such as paying your loan dues on time, keeping adequate funds in your account, opting for an auto-debit facility, etc. Use a home loan EMI calculator to exactly know your payable amount and ensure you never miss out on loan EMIs.