The motive behind conducting a thorough check about a borrower’s credit history is to understand his/her repayment abilities and intention to repay. The CIBIL score consolidates all the concerns of a lender and represents the credit history of the borrower with a 3-digit score. Needless to mention, it is almost impossible to avail unsecured loans with a low CIBIL score. However, things might be easier in the case of secured advances.
An individual’s CIBIL score may go down due to previous loan defaults, failed EMI payments, reckless utilization of credit limit on credit cards, and many other reasons. In case your CIBIL score is below 750,or it will be difficult to avail loans in future. Hence, know the minimum cibil score for mortgage loan before applying . Although, you can still apply for secured loans like a loan against property in India and improve your credit ratings over time.
Let’s take a look at how Loan against Property helps in improving your credit score.
- Repaying Your Mortgage In Time Makes You More Loan Worthy
The loan against property interest rate is usually lower than that on unsecured advances. This makes paying your EMIs more convenient, which in turn positively impacts your credit reports. As mortgage repayments are long-term in nature, there will be a gradual increase in the CIBIL score of the borrower. It will strengthen your prospects of procuring loans or credit cards in the future.
- An Advantage Over Unsecured Credits
Greater your unsecured debts, riskier you are as a lender. From this aspect, borrowing excessive unsecured credits makes you appear ‘credit hungry’ and adversely affects your CIBIL score. Moreover, the tendencies to default in case of unsecured loans are much higher due to their higher interest rates. A delay in repayment not only brings down your creditworthiness but also reduce the chances of availing loans in the future.
On the other hand, the loan against property interest rates is lower, which drastically minimises the chances of defaulting. Moreover, as your asset is mortgaged, you’ll be more obliged to pay-off your debts in time. These timely repayments over an extended period to build a good credit history in the long run.
- Limits Your Credit Appetite
Although loan against property eligibility criteria is less strained, yet when it comes to taking multiple loans at once, Loan against Property curbs your credit appetite. This is because the loan amount involved here is significantly higher than unsecured advances leading in the more extended repayment period. Moreover, there is always a fear of losing your asset if you fail to repay. This prompts you to abstain yourself from successive lending.
- Consolidate Your Debts
If you owe multiple debts, you can avail a from NBFCs like Bajaj Finserv to consolidate all. By this way, you can make your repayment process much more convenient.
With a Loan against Property from Bajaj Finserv, you enjoy an extended Loan against Property tenor of up to 18 years for self-employed individuals and 20 years for salaried professionals. You can prove your creditworthiness by paying your EMIs in time, thus positively impacting your CIBIL score. Moreover, to avail a loan against property documents required are minimal, and you enjoy relaxed eligibility criteria.
Bajaj Finserv also brings you pre-approved offers on secured credits like home loans and unsecured advances like personal loans, business loans, among other financial products. These pre-approved offers streamline the process of availing finances and further save time.
- Loan Against Property Is A Reliable Form Of Credit
What is mortgage meaning? A mortgage is a safer form of debt as your credit is drawn against your assets. Here, financial institutions lend you a percentage of your property’s current market value as loan. If you possess a low CIBIL score, seeking a lower loan to value makes you appear more creditworthy. This will have a constructive impact on your credit rating. The mortgage loan process is quite simple and one can get instant approval if matches the eligibility and criteria for it.
Moreover, loan against property India is also an appreciating asset. As the value of such assets increases over time, Loan against Property holds an advantage over depreciating assets like car loans. This, in turn, makes Loan against Property a catalyst in improving your credit score. The influence of loan against property on one’s CIBIL rating is numerous. However, one must know the ways of how not to default your Loan against Property to avoid hampering your credit rating.