A credit score is a crucial factor that lenders take into account when you are applying for an advance. This is because holding a good CIBIL score indicates your creditworthiness and shows minimum chances of defaulting on a loan.

Therefore, borrowers with bad credit scores often find it challenging in procuring the best home loan in India, as lenders consider such applicants as risky.

However, although it might be pretty challenging to avail loans with poor credit rating, it is not impossible.

Here are some tips you can follow to avail a home loan in India with bad credit score –

[A] Apply for a joint home loan

In case your credit score is low, but your spouse holds a good CIBIL rating of 750 or above, make her the co-applicant for a joint home loan. Moreover, if your spouse has a steady income source – lenders will take that into consideration, and you might receive your loan sanctioned for a larger amount.

Besides, you can also avail of this advance with comparatively lower interest rates. Furthermore, the repayment burden is significantly reduced in the case of joint home loan offers.

Plus, you can also avail tax benefits on both the principal and interest components individually. Each of the applicants can claim tax benefits of up to Rs. 2 Lakh, under Section 24 (b) of the Income Tax Act on the interest pay-outs. Under Section 80C, each of the co-applicants can claim tax rebates of up to Rs. 1.5 Lakh on the principal components cumulatively every year.

[B] Approach NBFCs

NBFCs (Non-Banking Financial Companies) are one of the best sources to avail a home loan provided the applicant holds a poor CIBIL score.

Some of the leading NBFCs like Bajaj Finserv offer competitive home loan interest rates on their housing loans. Besides, you can also benefit from relaxed eligibility criteria and nominal paperwork.

The company also provides pre-approved offers, which lower the time taken to avail financing by making the procedure simplistic. These pre-approved offers are applicable on personal loans, business loans, home loans, and numerous other financial products. All you need to do is share a few necessary details and check your pre-approved offer.

Also, make sure to use an online Home Loan EMI calculator of your lender to calculate your monthly outgo and determine if the advance is affordable for you.

[C] Possess a stable source of revenue

Even if you possess a bad credit score, but have a steady source of income, you can still avail of the best home loan in India. Having healthy revenue proves your capability of repaying your loan on time. This is the reason why salaried professionals are often preferred over self-employed individuals.

For instance, if you are employed in a reputed government, private or corporate firm, lenders will take that into consideration. It indicates that you have minimum chances of defaulting even meeting your fixed monthly obligations.

So, for a home loan online apply, you could improve your chances of loan eligibility by keeping this aspect in mind. Alternatively, you must also be aware of the best credit score for a home loan and how to improve yours for hassle-free lending in the future.

Additional measures for borrowers with poor credit score

  • Keep these pointers in mind –
  • Repay your existing credit card bills or on-going EMIs on time.
  • Avoid applying for a higher loan amount, considering you are already a risky applicant.
  • Convert ‘settled’ accounts into ‘closed’ accounts.
  • Avoid closing any of the older accounts, as your credit score takes a severe hit due to this.
  • Check for inaccuracies in your CIBIL report from time to time.

Following these tips will help you to avail the best home loan in India. You can also appoint a guarantor with a healthy CIBIL score, as it will improve your chances of home loan approval.

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