banner banner

Stay Up-to-Date with Our Blogs & Articles

The texts on this website have been translated using an automated translation tool and its accuracy cannot be guaranteed. We recommend referring to the English version of the content for the most precise information. In the event of any disputes or inconsistencies, the contents in the English language shall be considered final and binding. IIFL HFL disclaims any liability or responsibility in this matter.
Go Back to Main blog page

How to get a Home Loan with Low CIBIL or Credit Score

By IIFL Home Loans | Published On Jun 13 2024 9:06 AM 1 min read 102 views 3312 Likes

A CIBIL score is a three-digit number ranging from 300 to 900 that represents your credit history and repayment behavior. It is crucial because lenders use it to evaluate the risk of lending you money. A higher score indicates good credit management, making you a preferred candidate for home loan eligibility. Let's understand the range of a CIBIL score :

CIBIL Score range and meaning

CIBIL Score Range




Excellent Credit

Indicates a history of on-time payments and responsible credit management. Highly likely to qualify for the best loan terms and interest rates.


Very Good Credit

Signifies a strong credit history. Qualifies you for competitive loan options and allows you to negotiate for better rates potentially.


Good Credit

Indicates responsible credit behaviour. You should still be able to secure favourable loan terms, though interest rates might be slightly higher than those offered to borrowers with exceptional credit.


Fair Credit

May require additional scrutiny from lenders. Interest rates could be less favourable, and stricter loan terms might be imposed.


Low Credit

Indicates past credit challenges. Securing a home loan might be difficult, but possible with strategic planning and improvement efforts.

Below 300

Poor Credit

Indicates no credit history or limited credit usage, making it difficult to assess creditworthiness.

How low CIBIL Score impacts your Home Loan application

A low CIBIL score signals to lenders that you have had difficulties managing credit in the past. This can result in several outcomes: an outright rejection of your loan application, higher interest rates, or stricter loan conditions. Understanding this impact is crucial as it prepares you to take necessary actions to improve your chances with a low credit score mortgage.

Strategies to secure a Home Loan with Low CIBIL

If you have a low CIBIL score, then consider the following strategies to become eligible for a home loan without a CIBIL score:

Building a Strong Application

Having a good application is of utmost importance after a poor credit score. Here's how:

  • Boosting y our Down Payment: Increasing your down payment reduces the loan amount, thereby reducing the lender's risk. A substantial down payment can significantly improve your chances of approval, even with a low credit score.

  • Improving your Debt-to-Income Ratio: Your debt-to-income ratio is a measure of your total monthly debt payments compared to your gross monthly income. Lowering this ratio by paying off existing debts or increasing your income can make you appear less risky to lenders.

Enlisting Additional Support

If your credit score is poor then it is essential to have someone with a high credit score on your application.

  • Power of a Co-applicant: A co-applicant with a strong credit score can bolster your loan application. This shared responsibility reduces the lender's risk and can lead to more favorable loan terms.

  • Guarantor on your side: A guarantor agrees to repay the loan if you default. Having a guarantor can provide additional security for the lender, increasing your chances of loan approval.

Exploring Alternative Lenders

Non-Banking Financial Companies (NBFCs) can be more flexible than traditional banks. They might offer competitive interest rates and loan terms, even if your credit score is low.

Additional tips to improve your Mortgage loan

Here is some additional advice on how you can improve your chances for house loan with a low credit score:

  • Maintaining a clean credit history: Ensure timely payment of all bills and EMIs to avoid further damage to your credit score.

  • Minimising credit card utilisation: Keep your credit card balances low, relative to your credit limits.

  • Clearing existing debts: Paying off existing loans can improve your credit score and debt-to-income ratio.

  • Negotiating with lenders: Despite a low score, you can negotiate better rates if you have a stable income and a strong financial profile.

Important Considerations

  • Be prepared for stricter loan terms: A low CIBIL score often means higher interest rates and stricter loan conditions. Evaluate these terms carefully.

  • Evaluate the financial burden: Assess your ability to manage the loan repayments alongside your other financial commitments.

  • Explore credit counseling services: Professional guidance can help improve your credit score and financial health over time.

Wrapping up

Securing a home loan for low CIBIL score is challenging but not impossible. By building a strong application, enlisting additional support, and exploring alternate low-credit-score lenders, you can improve your chances. Remember to take steps to improve your credit score over time. With perseverance and the right strategies, homeownership can be within your reach.

For more insights on securing a home loan and improving your financial health, explore IIFL Home Loans . Our experts are here to guide you every step of the way. Check out our services and take the first step towards your dream home today.


Q1. Can I get a home loan with a CIBIL score of 600?


Yes, but you might face higher interest rates and stringent loan terms. Consider increasing your down payment or applying with a co-applicant.

Q2. How can I quickly improve my CIBIL score?


Pay off existing debts, maintain timely payments, and reduce credit card utilisation to see improvements in your score.

Q3. Are NBFCs a good option for low CIBIL score applicants?


Yes, NBFCs can offer more flexible loan terms and competitive interest rates for applicants with lower credit scores.

Q4. Does having a guarantor help in securing a home loan?


Yes, a guarantor can provide additional security for the lender, increasing your chances of loan approval.

Q5. What role does a co-applicant play in home loan approval?


A co-applicant with a strong credit score can strengthen your application, making it easier to secure favorable loan terms.


apply loan

Quick and Hassle Free Loan Processing

green ad
Prelude to Building Green - IIFL Home Loan's Guide to Sustainable Affordable Housing
Download report

Disclaimer: The information contained in this post is for general information purposes only. IIFL Home Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment, etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness, or of the results, etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability, and fitness for a particular purpose. Given the changing nature of laws, rules, and regulations, there may be delays, omissions, or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan product specifications and information that may be stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan.