Credit score based home loans at below 9% – Check latest rates

financialexpress.com:

Credit score-based interest rates are the rates at which banks and financial institutions lend money for home purchases, and these rates are determined, in part, by the borrower’s credit score. The credit score, as calculated by credit bureaus, is a numerical representation of an individual’s creditworthiness. It reflects their financial history, including how they’ve managed previous loans, credit cards, and other financial commitments.

Here’s what you should know:

Lenders categorise credit scores into different tiers. While the specific categorisation may vary from one lender to another, a common classification is as follows:

Excellent: 750 and above

Good: 700-749

Fair: 650-699

Poor: 600-649

Very Poor: Below 600

Lenders also check other criteria when they lend you. Like your income, employment, age and everything else is taken into consideration when you borrow from financial institutions.

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The interest rate on your home loan is directly linked to your credit score. The higher your credit score, the more likely you are to secure a lower interest rate. For individuals with excellent credit scores, lenders offer the most favourable rates, while those with lower scores might face higher interest rates or even loan rejections.

The interest rate differential between borrowers with excellent and poor credit scores can be substantial. A borrower with an excellent credit score may enjoy interest rates several percentage points lower than someone with a very poor credit score. This differential can have a significant impact on the overall cost of the home loan.

The interest rate on your home loan directly affects your Equated Monthly Installment (EMI).