How Does Your Credit Score Affect A Loan Against Property?

A loan against property is an effective credit option for meeting varied financial expenses. Its easy accessibility of funds makes it a popular financing option among borrowers. However, certain eligibility parameters determine whether the borrower is eligible to apply for LAP or not. Among them, one of the important ones is the CIBIL score.

Read on to know about how credit scores impact property loans in India.

Ways a credit score impacts loan against property

A borrower with a higher CIBIL score allows borrowers to acquire substantial mortgage loans from lending institutions at reasonable rates. As this score indicates a borrower’s creditworthiness and gives an idea about his/her repayment ability, borrowers must try to maintain this score to ensure availing of their desired loan amount.

Furthermore, borrowers with a credit score of above 750 will allow them to get a lower loan against property interest rates. However, if the borrower possesses a lower score, lenders consider him/her a high-risk borrower and offer higher interest rates.

Although when individuals apply for a loan against property online, they keep their high-value property as collateral, still credit score plays a crucial role in availing loan against property.

Apart from maintaining a decent CIBIL score, borrowers must be aware of other parameters that can impact loan against property applications. The factors include:

• Mortgaged property
• Borrower’s age
• Loan duration
• Regular flow of income

Apart from these, borrowers can also get a favourable interest rate against their loan by opting for a loan against property balance transfer, where they can shift outstanding loan balance to another lender for better terms.

To conclude, a credit score is one of the crucial parameters on which an individual’s loan against property application depends. Moreover, the loan against property application process is full of hassle for CIBIL defaulters.

Must Read: Guide On How To Consolidate Debt With A Loan Against Property