Does credit card EMI affect Home Loan

Does credit card EMI affect Home Loan

Does credit card EMI effect on home loan

While appraising the home loan application, the bank or lender will calculate the borrower's borrowing capacity based on the loan limit of the applicant. Not only this. Lenders tend to reject home loan applications if potential borrowers have too many credit cards, heavy credit card debt and defaulted payments.

Impact of Credit Card Payments and Home Loans

Several factors such as your repayment capacity, age, credit score, credit history and your salary are taken into consideration before approving your home loan application. Based on the findings, the lenders decide the interest rate and other terms and conditions when the home loan is sanctioned. When you have a huge credit card bill, it negatively affects your credit score.

Generally, home loans are not approved for applicants with low credit scores. A high credit card bill affects your home loan in the following ways:

Interest Rate: Applicants with a high credit score can have a talk with the banks and get a lower interest rate on their home loan. If you have a low credit score, you will have to pay a higher interest rate on your home loan.

Lowers your creditworthiness: When lenders receive your loan application, they evaluate the applicant's repayment capacity. The creditworthiness of an applicant confirm the possibility of him defaulting on the loan. In simple words, this is how responsible you appear in the eyes of the lender.

Credit Score: Having more credit card debt or having multiple credit cards will adversely affect your credit score. Similarly, a high credit limit on your card will reduce your creditworthiness.

So, if you are a user of credit card then you can use your credit card to build a strong cibil score, don't miss any of the EMI. Your credit card can help you to take home loan or any other loan easily. This will show your repayment capabilities to the bank.

Frequently Asked Questions

Does credit card affect loan eligibility?

Yes! While appraising the home loan application, the bank or lender calculates the borrower's borrowing capacity based on the loan limit of the applicant. Not only this. Lenders tend to reject home loan applications if potential borrowers have too many credit cards, heavy credit card debt and defaulted payments.

Does CIBIL impact home loan?

Yes. If you have a good CIBIL score for a home loan, the eligibility conditions become easier, and your application gets approved quickly. A low score means risk, and lenders may have to tweak loan offerings accordingly.

Can home loan EMI pay from credit card?

Yes, you can pay your home loan EMI through credit card.

Can credit card defaulter get home loan?

A CIBIL defaulter can get a home loan, but banks may charge a higher home loan interest rate.

Does usage of credit card affect CIBIL score?

Hence, you should clear your doubts that using a credit card affects the CIBIL score. So you should use your credit card wisely and wisely. Any misuse of credit card can dent your CIBIL score and in future, you will not be eligible for any credit facility from financial institutions.

With GRD India financial services Pvt. Ltd. you can get instant home loan at very low interest rates, it provides all kind of services to their client as per the banks norms. They make efforts for the clients in providing best loan price.

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