Image Source : FREEPIK Amid rising rates here is how your credit score can help you get cheaper home loans
Your credit score is a critical factor that can determine the interest rate you receive on a home loan in India. A high credit score indicates that you are a low-risk borrower and more likely to repay the loan on time, while a low credit score suggests the opposite.
Having a good credit score can make a big difference not only in terms of approval but also in terms of interest rates. A high credit score can result in lower interest rates, making the home loan more affordable.
What is a credit score?
A credit score is a numerical representation of an individual’s credit history, typically ranging from 300 to 900. It is created based on a compilation of various credit-related activities, such as loans, debts, and other financial obligations. The credit score provides a comprehensive overview of an individual’s credit history.
Having a credit score of 650 or higher can make it easier to secure a loan. Those with a score above 750 can get loans approved faster and will also receive more favorable loan terms with lower interest rates.
Home loans based on credit score
Before applying for a home loan, it is important to assess your borrowing capacity and ability to repay. Late or missed payments can have severe consequences, including penalties and even property seizure, so maintaining financial discipline is key to borrowing for the long term.
FAQs
1- What is a good credit score?
A good credit score is considered to be 650 or above.
2- Why is a good credit score important?
A good credit score is important because it is generally seen as indicating a low level of risk to lenders.
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