A home improvement loan can help you cover all the renovation related expenses without digging into your savings. However, a lender will diligently check your credit score before approving your loan.
Yes, you do need a good credit score for home improvement loan. Why? Let’s explore in detail.
How your credit score affects your home improvement loan eligibility
A home renovation loan is essentially an unsecured personal loan. So, you can apply without pledging any collateral. Still, financial institutions have to evaluate your repayment capacity before lending out any funds.
That’s why they check your eligibility based on various factors including, age, work experience, monthly income, nature of employment, credit score, etc. Your credit score, being one of the most important criteria, reflects your creditworthiness.
Credit bureaus like CIBIL, CRISIL or Experian calculate this score considering your existing debt, past payment behaviour, credit mix, length of credit history, etc. It is a three-digit number that ranges from 300-900. And no matter what type of loan you want, lenders consider a CIBIL score of 750 or above as the ideal benchmark.
Additional Read: 5 Habits to Have to Get yourself in the above 800 Credit Score Club
What is a good credit score?
A CIBIL score typically falls under four categories: bad (or poor), average, good and excellent.
As a loan borrower, therefore, you ought to keep a tab on your credit score. To maintain a healthy CIBIL score, you shouldn’t miss any scheduled monthly instalments and avoid delaying credit card bill payments.
When you default on your scheduled monthly payments, your credit score ends up taking a dip. That’s why it’s always prudent to use a personal loan EMI calculatorto plan your tenure and opt for the EMIs you can afford.
The importance of a good credit score
If you have a good credit score, you can get the following benefits on your home improvement loan:
- Enhanced loan eligibility: A good credit score boosts your personal loan eligibilityas it shows a positive debt history. Therefore, a lender is highly likely to approve your loan.
- Lower interest rate: With a favourable CIBIL score, your lender may even offer the home renovation loan at better terms. You can enjoy lower rates of interest and additional facilities as well.
- Quicker approvals: Another advantage is reduced waiting time for loan approvals. Your lender will approve your loan application quickly when you have a high credit score.
Additional Read: Do Credit Scores Affect Your Home Loans?
Over to you
Thinking of renovating your house? Shortage of funds delaying your project? Worry no more! Avail of a personal loan for home renovation from Tata Capital and give your home the perfect makeover.
With affordable personal loan interest ratesstarting at just 10.99%, you can receive an amount of up to Rs. 25,00,000 with ease. You can use these funds to enhance your living space for years to come without any collateral/security.
So, whether you want to make repairs, expand your space, or build a new room, our customised offerings can ease your financial burden. Learn more here.