Is CIBIL Score Required for Loan against Property?

Posted on Friday, September 30th, 2022 | By IndusInd Bank

CIBIL score is one of the eligibility criteria taken into account by banks when considering an application for loan against property. The score has a bearing on aspects such as interest rate, loan amount, and processing time.

The term “CIBIL score” has, in recent years, entered everyday conversations. Simply speaking, your Credit Information Bureau (India) Limited (CIBIL) Score is a three-digit number that indicates your credit history. The score is based on the credit record found in the CIBIL Report or Credit Information Report which chronicles an individual’s credit payment history across loan types and credit institutions over the passage of time. CIBIL scores range from 300 to 900 and the higher the score, the better your credit rating. It usually takes several months of credit activity to build a satisfactory credit score.

Why Does CIBIL Score Matter?

The CIBIL credit score is used by banks and financial institutions to gauge your credit worthiness. It has a bearing on the following:

• Loan Application: A low CIBIL score might lead to rejection of your loan application. A high score, on the other hand, will improve the odds of your loan application being sanctioned.
• Credit Card Application: Banks and lenders are more likely to approve your credit card application when you have a high CIBIL score.
• Interest Rates: A good credit score gives you greater negotiating power for getting a lower rate of interest on credit cards and loans.
• Higher Approval Limits: A score exceeding 750 significantly boosts your chances of getting higher limit of loans.

Is CIBIL Score Required for Taking Out a Loan against Property?

Your CIBIL score is taken into account by banks and lending institutions when considering your application for a loan against property. While a credit score above 800 is considered excellent, a score below 800 but above 650 is deemed acceptable by most lending institutions. A low CIBIL score does not automatically lead to rejection of your loan against property application. But the potential negative consequences are as follows:

• A Lower Loan Amount: While individuals with a higher credit score may be able to borrow as much as 70% or even more of the value of the property pledged, someone with a low score will get a much lower borrowing limit.
• A Higher Interest Rate: The loan against property interest rate varies depending on a person’s CIBIL rating. Banks typically offer the highest interest rates to individuals with the lowest credit score.
• Longer Processing Time: People with a good credit score often get their loan applications approved within days. But banks conduct credit enquiries and checks to determine whether or not to lend to someone with a poor rating, resulting in a longer processing time.
• Steeper Processing Charges: Banks see little incentive in lending to people with a low credit score. So they charge individuals with low scores a very high processing fee and those with impressive scores, a low processing fee as they have a better record of repayment.
• Fewer Options & Chances of Rejection: Many banks are not even willing to consider the loan applications of people with a low credit score. Consequently, they are likelier to face rejections for minor discrepancies in the documentation or misrepresentation of any sort, narrowing their options.

Apply for Indusind Bank Loan against Property

You may avail of a loan against property from IndusInd Bank to meet your business or personal needs. The loan can be comfortably repaid over a maximum tenure of 15 years. Key features and benefits of an IndusInd Bank loan against property are as follows:

1. Choice of mortgage existing residential or commercial property.
2. Access to a higher loan amount.
3. Multi-purpose loan in which there is flexibility of using the funds for personal or business needs.
4. A fast way to raise immediate, long-term funds.
5. Access to doorstep services

The loan amount you can get against your property is determined by a host of factors such as your eligibility rating, profile, credit score and history, monthly income, and age.

All in all, a loan against property from IndusInd Bank is a great way to unlock the value of your property for getting desired funds.

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.