In a good move for prospective loan borrowers, Bank of India has decided to offer cheaper home loans to those consumers who have a CIBIL score of 760 and above. These customers will get home loans at marginal cost of funds based lending rate (MCLR) if the loan amount is Rs 30 lakh or more.
Releasing the statement, the bank said, “Consumers with a CIBIL score of 760 and above will get the rate at MCLR for a year, which is currently 8.4%. It means that they will get the benefit of the reduced rate of interest.”
The bank further said that customers with a score of 759 will get the home loan at MCLR + 0.10 basis points for a year, which works out to 8.5%. One basis points is 100th of a percentage point.
“Consumers with a good credit discipline should be rewarded, as it helps propagate the importance and need to maintain a good financial history. Our preferential pricing model aims to reward high-scoring home-loan aspirants with competitive ROI, thereby helping them make their dream home a reality,” the statement said.
A credit score is one of the most important factors which determine a person’s eligibility for loan approval. It is a three digit number which ranges from 300 to 900. The more is your credit score the more are the chances to qualify easily for any kind of loan. A good credit score provides lots of benefits to a borrower such as low-interest rate, higher loan amount, quicker loan approval process and higher repayment period.
These days all the major banks, as well as financial institutions, give much importance to credit score before starting the loan approval procedure. In India, the oldest organization which releases the credit score of a person is CIBIL.
Welcoming this move of BoI, CIBIL’s Head of Direct to Consumers Interactive, Hrushikesh Mehta, said: “Bank of India’s CIBIL score-based incentive helps further highlight the need to monitor and build a positive credit profile through good credit habits.”