Home Loan for Low CIBIL Score

CIBIL Score matters tremendously when applying for a home loan. Specifically, the CIBIL Score is the first thing a bank checks upon receiving your loan application. Generally, a CIBIL Score of 700 or above is considered ideal. A CIBIL Score below this criteria is viewed as a low score, and it may result in unfavourable rates and terms, or, in the worst case, you may face rejection. However, this doesn’t mean that there are no options available.

Notably, certain banks are using common sense and take the time to understand you and your situation, not just your CIBIL Score and income history. No computers, no algorithms, no digits; just human and common sense. Thus, they strive to offer the necessary funds along with better rates and terms, irrespective of the past. To learn more about these home loans for low CIBIL Scores, let’s scroll down.

Feature & Benefits of Home Loan for Low CIBIL Score

The following are the features and benefits of a home loan with a bad CIBIL score:

  • Moderate eligibility criteria
  • Minimal documentation
  • Personalised approach
  • Affix co-applicants
  • Enable negotiation
  • Quick fund disbursal

Home Loan for Low CIBIL Score Interest Rates

Here are the interest rates of home loans for low CIBIL Scores from various lenders across India:

Lenders Interest rate (p.a.)
Bank of Baroda 8.40% – 10.65%
Punjab National Bank 8.45% – 10.25%
State Bank of India 8.40% – 10.15%
Bank of India 8.30% – 10.75%
UCO Bank 8.45% – 10.30%
HDFC Bank Ltd. 8.75% – 09.40%
ICICI Bank 8.75%  – 11.45%
Axis Bank 8.70% – 13.30%
Federal Bank 8.80% – 10.30%
Dhanlaxmi Bank 9.35% – 10.50%

Home Loan for Low CIBIL Score Documents Required

The following documents are required for a home loan with a bad CIBIL score:

  • KYC Documents: PAN Card, Aadhaar Card, Passport, Voter ID, or Driving License.
  • Proof of Address: Electricity Bill, Gas Bill, Ration Card, or Property Tax Receipt.
  • Income Documents: Payslips, Bank Statement, Income Tax Returns, etc.
  • Property Documents: Title Deeds, Buyer Agreement, Receipt of payment made to the developer, etc. 

Home Loan for Low CIBIL Score Eligibility Criteria

The following are the applicable fees and charges concerning a home loan for low CIBIL Scores:

  • Your age must be between 21 to 65 years old.
  • You must be salaried or self-employed individuals.
  • You must have a stable and regular source of income to cover the loan repayment. 
  • You must have a good credit score and repayment history.
  • You must be a resident of India or a Non-Resident Indian.

Fees and Charges of Home Loan for Low CIBIL Score

The following are the applicable Fees and Charges for low CIBIL home loans:

  • Processing Fees: Levied for processing your home loan application. It can generally go up to 3% of the loan amount, based on your chosen lender.
  • Prepayment Charges: If you wish to repay the loan amount before the predetermined tenure, a prepayment charge might be applicable. Typically, it ranges from 0.5% to 2% of the prepayment amount.
  • Penal Interest: Penal interest can be applicable when you make a delay/default on EMIs. It is also known as late payment charges and varies depending on the lender, ranging from 18% to 24% p.a.
  • Other Charges: A low CIBIL home loan may entail various additional fees and charges, including legal fees, stamp duty, conversion fees, amortisation schedule charges, and more. It is recommended to thoroughly examine the terms and conditions of your selected lender before making any decisions.

Tax Benefits of Home Loan for Low CIBIL Scores

The tax benefits of a home loan are not directly affected by your CIBIL score. They are available to all borrowers, regardless of their credit score. Here are some of the tax benefits you can avail yourself of regarding a home loan for a low CIBIL score:

  • Section 80C: Up to Rs. 1.5 lakh per annum on the principal amount you paid.
  • Section 24(b): Up to Rs. 2 lakh per annum on the total interest you paid.
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