Home Loan with 600 Credit Score

A 600 credit score, at the lower end of the "fair" range, can affect home loan prospects significantly. Traditional loan options may be limited, as lenders often see lower scores as higher risk, potentially leading to higher interest rates. For those with a 600 score, FHA loans, which are more lenient with credit requirements and down payments, could be a viable alternative.

However, be prepared for possibly higher down payments and thorough scrutiny of your financial situation, including employment history and debt-to-income ratio. Improving your credit score through timely debt payments and responsible financial behaviour can benefit future loan opportunities, offering better terms. This proactive approach can gradually enhance creditworthiness, making securing a home loan more accessible and affordable in the long run.

Benefits of a 600 Credit Score Home Loan

While a 600 credit score is generally considered on the lower side of the credit spectrum, there are still some potential benefits when it comes to home loans:

  • Access to FHA Loans: A 600 credit score qualifies for Federal Housing Administration (FHA) loans. These loans are designed for borrowers with lower credit scores and offer more lenient lending requirements than conventional mortgages.
  • Opportunity to Improve Credit: Obtaining a home loan with a 600 credit score in India requires making timely payments can help improve your credit score over time. This responsible financial behaviour can lead to better loan terms and rates in the future.
  • Lower Down Payments: FHA loans often require lower down payments than conventional loans, making purchasing a home more accessible for those with a 600 credit score.
  • Potential for Refinancing: As your credit score improves, you may have the opportunity to refinance your mortgage to a loan with a lower interest rate and better terms.
  • Homeownership Access: Despite a lower credit score, having the option to secure a home loan means you can access homeownership, which can be an important step in building long-term wealth and financial stability.

Best Home Loans with a 600 Credit Score in India

Availing a home loan with a credit score of 600 is a challenge, and if an applicant goes to the leading institutions, he or she might get rejected. This is where one can rely on NBFCs that may offer an individual a home loan even with a credit score as low as 600. Let’s take a look at such NBFCs. 

Bajaj Finserv

If you have a low credit score of 600 or less, you can turn to Bajaj Finserv NBFC for your financial borrowing needs. Here is a quick rundown of Bajaj Finserv home loan.

Loan Amount 15 CR
Interest Rate 8.50% onwards
Repayment Tenure 48 hours
Processing Fee Up to 7% of the loan amount

Muthoot Finance

Here is another option one can go to. Muthoot Fincorp is a key player in India's non-banking finance sector and caters to individuals, small businesses, and rural communities. This lender sanctions 600 credit score home loans to applicants with the following particulars.

Loan Amount Up to INR 25 Lakhs
Interest Rate 12%-18%
Repayment Tenure Up to 20 years
Processing Fee 2% of the loan amount

Aditya Birla Capital

Aditya Birla Capital is another major NBFC in India that constantly enhances its digital capabilities to solidify its position as a leading NBFC. It could also be your ideal choice if you have a credit score on the lower end.

Loan Amount Up to 10 Crore
Interest Rate 8.85%-16.50%
Repayment Tenure Up to 30 years
Processing Fee Up to 1% of the loan amount

Reliance Capital

Reliance Capital offers diverse services, including asset management, insurance, and capital markets. Here is what you can expect if considering a home loan with a 600 credit score.

Loan Amount 10 Crore
Interest Rate 9.75%-13.00%
Repayment Tenure Up to 30 years
Processing Fee 0.5% to 1.5% plus GST

L&T Finance Holdings Limited

If you have a low credit score, then applying home loan with L&T Finance would be a wise decision. Here is a brief on their home loan scheme.

Loan Amount Up to 7.5 Crores
Interest Rate 8.60% onwards
Repayment Tenure 25 years
Processing Fee Up to 3% of the loan amount + applicable taxes

What Does a 600 Credit Score Get You?

You can easily apply for different loans with a 600 credit score. Here is a list of loans that you can expect with a 600 credit score on your side.

Home Loans

You can get a home loan with a credit score as low as 600. However, you will need to pay higher interest rates through monthly instalments. 

FHA Loans

FHA Mortgage Loans, insured by the Federal Housing Association (FHA), are popular among borrowers who do not meet conventional loan requirements. They cater to individuals like married couples, recent graduates, or those with bad credit ratings, offering security against defaults and lower initial instalments. With a 600 credit score, you can get a FHA loan without much hassle. 

Auto Loans

A Vehicle Loan in India enables the purchase of two and four-wheelers for personal use. With a 600 credit score, you can easily apply for an auto loan from your respective NBFC. 

Personal Loans

A 600 credit score can land you a personal loan via top NBFCs. You can use these personal loans for various purposes, from vacationing to consolidating your debts.

Credit Cards

Even though it is not a premium one, but with a 600 credit score, you can get various banks’ credit cards like Axis Bank Insta Easy Credit Card and SBI Unnati Credit Card, among others. 

Student Loans

With a credit score between 600-650, you can easily apply for a student loan and pursue higher studies.

Small Business Loans

You may get a business loan with a credit score of 600-650. However, as a small business entity, there are strong chances you will need to pay higher interest rates. 

Debt Consolidation Loans

Obtaining a debt consolidation loan with a 600 credit score is feasible but may come with higher interest rates and stricter terms due to the perceived risk. In this case, exploring options with credit unions, community banks, or alternative lenders, who may offer more flexibility for lower credit scores, is advisable.

Urban Money