Higher credit scores can shave lakhs off home loans despite RBI rate hikes
Borrowers with strong credit scores can negotiate lower home-loan rates even as the RBI raises its repo rate.
When seeking a mortgage, understanding the interest rate is crucial because it directly impacts the Equated Monthly Instalment and overall borrowing cost. Rates fall into two categories: fixed rates, which remain unchanged for a predetermined term and aid budgeting, and floating rates, which move with benchmark rates and can lower costs if market rates drop. Factors such as the applicant’s credit history, employment status, and prevailing monetary policy influence the rate a lender offers.
Prospective borrowers are urged to review their CIBIL score, correct any errors, and reduce existing debts before applying. Required paperwork typically includes identity, address, income proof, bank statements, and property documents. Using a home loan EMI calculator helps visualize different repayment scenarios and understand the amortisation of principal versus interest over the loan’s life.
