Your home loan EMIs will soon be linked to credit score


Your credit score would soon decide the amount of equated monthly installments (EMIs) you have to pay toward repayment of home loans.

This score is synonymous to credit rating of a borrower and is decided on the basis of data (related to loan history) submitted on a regular basis to credit bureaus such as CIBIL (Credit Information Bureau of India).


According to a report in The Economic Times, the interest which you pay on your home loans will soon be linked to your credit rating. In case, the credit score improves, the amount of EMIs you have to pay will decrease.

State lender Bank of Baroda is the first bank to link interest rates on home loans to credit scores of borrowers. The bank on Monday announced cheapest home loans at 8.35 per cent per annum.

The new rate will be offered to customers with credit score of 760 or above from CIBIL and will be applicable from January 7, 2017.


BoB customers with credit score of 725 to 759 points will be charged 8.85 percent while those having credit score below 724 points will be charged 9.35% on home loans.

The new rates are irrespective of the tenure and the amount.

Currently, State Bank of India is offering loans at 8 percent for one year tenure. It has kept a 65 basis points mark up for home loans.

Punjab National Bank has cut its one-year marginal cost of funds-based lending rate by 0.7 per cent to 8.45 per cent from 9.15 per cent, effective from January 1.

Private lender ICICI Bank’s home loan rate stands at 8.70 per cent.