HOW TO OBTAIN A MORTGAGE DESPITE A LOW CIBIL SCORE
Published By MintGenie Team | 18 Mar, 2024
Importance of CIBIL Score
Lenders assess an individual's creditworthiness for financial products like home loans based on their CIBIL score, provided by Credit Information Bureau (India) Limited.
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Impact of Low CIBIL Score on Mortgage Approval
A low CIBIL score suggests higher credit risk to lenders, potentially making it more difficult to secure a mortgage, although not impossible.
Here are some conditions for securing a mortgage despite a lower CIBIL score:
Impact on Interest Rates
Individuals with low CIBIL scores may be offered loans at higher interest rates due to perceived higher risk by lenders.
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Higher Down Payment Requirement
Lenders often demand a larger upfront payment from applicants with low CIBIL scores to mitigate lending risks associated with past payment issues.
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Co-signer or Guarantor Option
Some lenders may allow applicants with low CIBIL scores to secure a mortgage by involving a co-signer or guarantor with a better credit history, sharing the responsibility for loan repayment.
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Consideration of NBFCs
Non-banking financial companies (NBFCs) may offer more flexibility in credit score requirements compared to traditional banks, potentially providing options for individuals with lower credit scores.