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  • CIBIL Score Required for HDFC Home Loan

    CIBIL Scores are used by banks or lenders to check the creditworthiness of loan applicants or borrowers. A CIBIL score of 750 and above is considered to be very good.

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  • HDFC, just like any other lender, checks applicants’ scores from the Credit Information Report (CIR) developed by CIBIL. Based on the credit score the bank decide if the applicant should be granted a loan. If the credit score is low, the bank may still grant you loan at a higher rate of interest depending on the information available on the credit report.

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    Let us see what a CIBIL score is and why it’s important while applying for a home loan.

    What is a CIBIL score?

    CIBIL score is basically a credit score given by CIBIL to indicate a person’s creditworthiness based on past credit history. This information helps lenders to evaluate loan applications.

    CIBIL or the Credit Information Bureau India Ltd. is India’s first credit information company. It is also known as the Credit Bureau. The Credit Bureau maintains records of individuals’ and companies’ credit information regarding loans and credit cards. This information is submitted to CIBIL by member banks and lenders on a monthly basis. This information is used to maintain a Credit Information Report from which a Credit Score is developed. CIBIL is licensed by the RBI and governed by Credit Information Companies (Regulation) Act of 2005.

    Why is CIBIL Score important when applying for a home loan?

    The CIBIL score acts as the first impression of the applicant.CIBIL does not decide if the loan or credit card should be sanctioned nor can it delete any records reflected on the Credit Information Report. CIBIL is just here to help with the lenders and the applicants to take an informed decision.The CIBIL Score ranges from 300-900. It is noticed that the credit score above 750 is preferred by the loan providers.

    Things the applicant must know:

    The applicant needs to keep in mind the following while applying for loan:

    • If there is any incorrect information provided by CIBIL, the individual can report and submit valid proof to correct it.
    • If a person has two loans and if he defaults on a few payments on one of the loans but has no default on the other one, and if that person wishes to avail another loan from a different bank, this bank will get information from CIBIL about his default payment. Thus, increasing the chances of his loan at the other bank being rejected. He may even have to pay higher interest on the second loan due to this.
    • Banks check your payment history if there is any default and how much is overdue.
    • They check your company profile where you work.
    • They check the EMI to income ratio. That is if your monthly EMI is more than 50% of your monthly salary, the chances of getting a low is reduced.

    Types of Home Loans offered by HDFC

    The following types of loans are offered by HDFC bank:

    The following types of loans are offered by HDFC bank:

    Home Loan Individuals can purchase a new or an existing home or can even construct a house by applying for a loan under this scheme.
    Home Improvement Loan (HIL) This scheme facilitates internal and external repairs and other structural improvements, such as painting, waterproofing, roofing, plumbing, electrical works, etc.
    Home Extension Loan (HEL) You can apply for a loan under this scheme if you want to add more space to your existing home to give comfort to your growing family.
    Special Home Loan Scheme for Agriculturists Farmers can buy or construct houses/apartments in several cities/towns or residential areas of villages of their choice under the scheme. The eligibility is based on the agricultural land they own and the crops being cultivated. The farmland is not taken for a mortgage.
    Rural Housing Finance for Salaried and Self Employed This scheme offers home loans for government and private sector employees to buy rural properties in residential areas. NRIs can also avail loan under the scheme to purchase rural properties.

    Reasons behind rejecting a person's home loan application apart from low credit score:

    The below mentioned points could also be one of the reasons for home loan application rejection:

    • Insufficient income: When the bank feels that the income of the applicant is not sufficient to support the EMI of the proposed loan, the loan application of the applicant can be rejected.
    • Inadequate employment status: Work experience or employment status is one of the main considerations for home loan eligibility. Such criteria are to be fulfilled to ensure that the applicant is capable of repaying the loan in full without any foreseeable defaults. When the applicant does not meet the work experience and the employment conditions set by the bank, the loan application of the applicant can be rejected.
    • Discrepancy in details submitted on the application form: The application form for the home loan application has to be filled in correctly and with due care. Any error in filling out the home loan application form or wrongful submission of details can lead to the rejection of the home loan application of any person.
    • Does not fulfill the age criteria: HDFC bank has set specific age criteria for the applicants to be eligible for the home loan. When the applicants do not meet the age criteria, it leads to instant rejection of the home loan application.

    Ways to improve your CIBIL Score to avail yourself of a home loan:

    Some of the ways to improve your CIBIL score are as follows:

    • Keep track of your credit score and credit report, being aware will help make better decisions
    • Check your credit report for the mistakes or errors from your end and rectify those errors
    • Avoid applying for any new credit requests within a short period
    • Try to settle your outstanding dues or default payments at the earliest
    • Ensure paying all your credit bills and due EMIs on time
    • Try to limit your credit card spending to less than 30% of your credit limit is considered a good habit to build a decent credit score

    FAQs on CIBIL Score Required For Hdfc Home Loan

    1. How much is the minimum credit score needed for the sanction of an HDFC home loan?
    2. The minimum credit score needed for an HDFC home loan is 700.

    3. Can the credit score be affected if the borrower misses payments of loan instalments?
    4. Yes. Non-payment of loan instalments will directly affect the credit score of a person

    5. Can part payment of home loan affect a person’s credit score?
    6. Yes, part payment of home loan can affect a person’s credit score.

    7. Does HDFC bank allot up to 90% of home loan?
    8. Yes, the HDFC bank allots up to 90% of home loan.

    9. How much CIBIL score is required to avail a home loan from HDFC?
    10. You need a CIBIL score between 720 to 750 to avail yourself of a home loan from HDFC.

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    TransUnion CIBIL is one of the leading credit information companies in India. The company maintains one of the largest collections of consumer credit information in the world. CIBIL Score plays a key role in the lives of consumers. Banks and other lenders check the CIBIL Score of the applicants before approving their loan or credit card application. Consumers can visit the official website of CIBIL to check their CIBIL Score and Report.

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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