Can I Qualify for a Home Loan at Low Credit Score?
In a developing country like India, many people don’t have good credit score. Their rejection at the lender’s end is a big concern. To sort out this problem, housing finance players bring forth several home loan schemes, where housing finance is possible even at low credit score. Let’s find out how is this possible.
Usually, it is believed if you have a low credit score, you don’t qualify for a home loan. Some people even don’t apply for the home loan if their CIBIL score falls below 650 because of fear of disapproval. Lenders usually charge a high rate of interest in this case. If your credit score is above 700 out of 900, then only you make a winning home loan application.
But, in a developing country like India, many people don’t have good credit score. Their rejection at the lender’s end is a big concern. To sort out this problem, housing finance players bring forth several home loan schemes, where housing finance is possible even at low credit score. Let’s find out how is this possible.
Some housing finance lenders provide home loans to low CIBIL scorers, subject to a plenty of terms & conditions. The obligation can be in the form of a high-interest rate or more income and verification documents etc. The low score indicates insecurity on the part of the aspirants and thus, they need to do lots of homework to regain back their credit position.
However, if one wants to avail home loans with low credit score immediately, he can approach for ‘Swaraj Home Loans launched by IIFL HOUSING FINANCE.’ This product caters to first-time home buyers, who may or may not be supported by formal income documentation and have poor credit history. Large numbers of self-employed people like mechanics, technicians, driver, plumber, with little financial literacy have poor credit history. They can finance their dream home with ‘Swaraj Home Loans’.
Click here to check the home loan eligibility
Still, if you receive the home loan at low credit score, you will love to scale up your CIBIL Score. Another way to qualify for a home loan is availing a joint home loan. Let us elucidate a case study in this regard–
Mr. Rajeev Verma, an industrial worker in Kanpur faced severe home loan rejections as his CIBIL Score was below 650. On the suggestion of a home loan expert, he applied with his working wife and as a result, his home loan application became accepted hassle-free.
All prominent home loan schemes like ‘Swaraj home Loans’ and ‘Credit Linked Subsidy Scheme of Pradhan Mantri Awas Yojana’ permit joint home loan option. The discussion would not be complete if we will not throw some light on the ways to improve the desired CIBIL Score.
- A payment history can help you – Yes, keep paying the installments on time. To validate your claim, you can also showcase the past payment records to a credit agency.
- No payment defaults – There should be no defaults in payments for a running loan. Payment history and defaults make a significant impact on the credit score.
- Appeal for inaccurate things – When you track any discrepancy or error in the CIBIl report, appeal the inaccuracy on the CIBIL website. As per the rules, the lender rectifies the mistake within 30 days of timeframe.
- Never apply for so many loans – Once you made inquiry for too many loans, it shows you are desperate for home loans and this can affect the CIBIl score negatively.
- Seek Expert advice – Even after constant attempts, if you are not able to establish the credit, seek any home loans expert advice for the right solution.
So, we can conclude home loan is possible at low credit score with progressive home loan schemes. However, it is always better to keep your CIBIL Score high for maintaining a sound financial portfolio. Some significant steps, discussed above can bring a meaningful change in your credit score in 1 year.
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