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How to avail Home Loan without CIBIL Score?

Home Loan without CIBIL
Home Loan without CIBIL

Home Loan without CIBIL score is un-imaginable. I receive multiple queries from my clients on How to avail Home Loan without CIBIL Score. In short, Home Loan lender should not check CIBIL Score of a Borrower. I have handled many cases wherein the people are victim of mistaken identity, wrong entries, identity theft, CIBIL Score of -1 i.e. insufficient credit history or no credit history. Dream of owning a house will remain dream for this section. As we know that now it is very difficult to avail Home Loan without CIBIL Score. I am writing this post for the benefit of such potential borrowers who are being victimized or don’t have sufficient credit history. Any borrower who has defaulted on payment i.e. willful default or in case of intentional default, my honest suggestion is to improve CIBIL score before availing Home Loan. Home Loan without CIBIL score should be the last option for any potential borrower as it comes with additional cost. It is always advisable to Improve your CIBIL Score by following good credit practices. Even if you are being victimized, you should try to get your CIBIL score corrected despite the fact its a long process.

Lets discuss 6 ways to avail Home Loan without CIBIL score

Home Loan from Co-operative Banks 

Not many people are aware that most of the co-operative banks approve Home Loan without CIBIL score. Reason being, co-operative banks are very small in size therefore cost of operation is high and cost of funds is also very high. There is a constant pressure on these banks to re-deploy funds. You might have observed that co-operative banks offer high rate of interest on Fixed deposits. If cost of funds is high then obviously bank will lend this amount at higher rate. Any borrower with good cibil score will not approach co-operative banks for Home Loan. As this borrower will not pay high rate of interest. Only those borrowers who wish to avail Home Loan without CIBIL score approach co-operative banks.

The interest rate on Home Loan from co-operative banks is in the range of 13% to 16% i.e. 3% to 6% higher compared to ROI offered by nationalized and private banks. The home loan ticket size will be low. Some co-operative banks offer max Home Loan of upto 50 lakh to 70 lakh only because of high risk of default. A co-borrower or guarantor is must for Home Loan from co-operative bank. Last but not the least, you should know the Manager, employee of co-operative bank or any good customer of the bank to avail Home Loan. In most of the cases Home Loans are approved only on the basis of references. Good thing about Home Loan from co-operative bank is that you can avail Home Loan without CIBIL score.

Home Loan from Friends and Family Members

Another good option to avail Home Loan without CIBIL score. Again people are aware that you can also avail Home Loan from your friends and family members. Obviously they will not check your CIBIL Score to approve Home Loan. Few important points

1. Sign agreement similar to Home Loan agreement with the parent/relative/friend from whom you are availing Home Loan.

2. Mention the Home Loan Amount, Rate of Interest and repayment Terms & Conditions. It is not necessary that you have to pay market linked rate of interest and monthly EMI’s. You can sign agreement at even 1% Home Loan Interest Rate and pay lump-sum amount at regular intervals with interest.

3. Mention EMI amount & frequency similar to Home Loan EMI

Other terms and conditions like who will retain the original documents, lien on property etc can be discussed and mutually agreed upon.

Loan against Existing Assets

Home Loan without CIBIL score can also arranged by availing loan against existing assets. There is a famous saying that “A friend in need is friend indeed” similarly in financial world “An Asset in need is Asset indeed”. I do agree that you can’t arrange large pool of funds through this route but you can explore. Moreover many people are not aware that they can avail loan against certain existing assets. In short unlock value of existing assets which will help to arrange Home Loan without CIBIL score. Some of these assets are

1. Overdraft facility from your existing Savings account (Depending on Account history)
2. Loan against Credit Card (Max 30% of Credit Card Limit)
3. Loan against Fixed Deposits
4. Gold Loan
5. Loan against Insurance Policy
6. Loan against PPF account

Personal Loans under Corporate tie up

You can avail corporate personal loan from Bank with which you are maintaining salary account or if your company has special tie up with the bank. These corporate Personal Loans are approved based on Salary of the employee, stability & business of the company with the bank. In most of the cases CIBIL score is not checked and you can avail funds for Home Loan without CIBIL score. I suggest you to check with bank executive regarding the same. I would like to clarify that bank will report the personal account details in CIBIL database but may not check CIBIL Score before approval. With the sharp drop in Rate of Interest for Personal Loans this can be one of the best option. Rate of interest on personal loans under corporate tie up is between 12% to 14%.

Private Lenders – Home Loan without CIBIL score

In many cities you will find Private lenders who are willing to lend i.e. Home Loan without CIBIL score. Only flip side is that rate of interest is very high between 18% to 24%. Also you need to mortgage original property papers with the private lenders. Loan amount can be 50%-60% of property value. Such Home Loans are for very short duration. Loan amount can be re-paid annually with interest instead of monthly EMI. Private lenders give Home Loan based on trust factor and mostly through references.

Guarantor for Borderline cases

In many cases wherein CIBIL Score of Borrower is on borderline i.e. between 650 to 750. Banks may agree to approve Home Loan without CIBIL score i.e. they ignore CIBIL Score of borrower provided borrower bring Guarantor whose CIBIL score is good. As i mentioned in my post Being a Loan Guarantor – Are you risking your future? that liability of a Home Loan Guarantor is same as that of a Home Loan Borrower. If any of your friend or family member with good CIBIL Score can become guarantor then you can avail Home Loan without CIBIL score.

A word of caution that by following above mentioned tips you can only arrange funds for low value Home Loan. Also rate of interest will be higher compared to what is being offered by nationalized and private banks on Home Loan therefore cost of property will be high. There is no alternative to good CIBIL score and as i mentioned Home Loan without CIBIL score should be the last option to exercise.

 Copyright © Nitin Bhatia. All Rights Reserved.

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Allan Fernandes
Allan Fernandes
8 years ago

hello nithin

Allan Fernandes
Allan Fernandes
8 years ago

Actual Nithin Iam looking for Housing Loan but My CIBIL Scores are 575 due to settlement as i had finalized property But problem iam not CIBIL

Nitin Bhatia
Nitin Bhatia
8 years ago

Home loan seems difficult. As is suggested in my post, you may check with cooperative banks.

Abhilash Govindan
Abhilash Govindan
8 years ago

Hi Nitin…Good morning…we are planning to apply for a loan against property (Pledging). For this case, Is that necessary CIBIL as its low. If necessary CIBIL what we suppose to do?….Thanks in advance.

Nitin Bhatia
Nitin Bhatia
8 years ago

It depends to whom you are pledging. If you are pledging to bank then definitely CIBIL score is required. For general suggestions to improve CIBIL Score, please check my posts on CIBIL score.

Guru
Guru
8 years ago

Hi, Nitin, I have seen my CIBIL score in 2015, which was 608. I have not done any credit transections after that. Will my CIBIL remains 608? if so Am I eligible for home loan?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Guru

It depends how the banks/financial institutions are reporting your credit entry. In all probability, it will be near 608 only. For home loan, you need min CIBIL score of 750.

Rishi Mehta
Rishi Mehta
8 years ago

Which all Co-operative banks can be approached? Any particular list that you may have?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Rishi Mehta

The presence of co-operative banks is limited therefore you may approach any co-operative bank in your area. The rate of interest in such banks is slightly higher compared to market leaders.

bhabani
bhabani
7 years ago

Hello,
I had a personal loan of 4lakh which I have taken to repair the home. But it’s just 2month old. Will it reflect in my cibil if I apply for a home loan now?

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  bhabani

Yes. It will be reported to your CIBIL database.

rakesh
rakesh
7 years ago

Hello,
my cibil score is 681, i have a good track record of my loans which is closed without default. But, 2 loans which i have guaranteed has been written off in 2014, which shows me as gurantor in cibil report.
How long will the cibil database store the data?.( i have read somewhere, its 7 years)
How to avail loans?

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  rakesh

7 Years from last date of reporting. I doubt you will get a loan with CIBIL score of 681.

Gaurav Gautam
Gaurav Gautam
7 years ago

Hi, I never ever took any loan/credit card yet in past now I need a personal loan. My Cibil score is -1 means no transaction done between me and Bank. Do we have any option here Or bank so that I can get that amount for a Year Or 2. However I had word with my salary bank account (Indusind) but they need cibil. Need your kind suggestion here.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Gaurav Gautam

CIBIL Score of -1 implies there is NO Credit history. Thus before availing personal loan you need to build your credit history. You may opt for secured credit card. Please check my following post for more details
https://www.nitinbhatia.in/personal-finance/secured-credit-cards-repair-cibil-score/

kalpana
kalpana
7 years ago

sir, i want to apply for home loan. my husbands CIBIL score is low. is it possible for home loan on my name only without co-applicant.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  kalpana

You can buy a property only in your name and apply for home loan in your name. Your home loan eligibility will be low in this case.

swapnil jagtap
swapnil jagtap
7 years ago

Sir i want home loan but bank rejected my laon 2 times. Bcos of cibil score problem. What can i do. I m ready clear all my payments. But cibil update in 3 months. And i want home loan in a month.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  swapnil jagtap

You can pull out your CIBIL and request for CIBIL masking of problematic accounts.

Tapas
Tapas
7 years ago

Hi,

My CIBIL Score is 758. However there were couple of loans which I had settled and now I have paid the Outstanding balance. However I can see the late payment dates in the Days Past Due section. But they are of 2008 and 2016. Do you think it will impact my eligibility to apply for Housing Loan?

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Tapas

It seems banks are regularly updating your old accounts with DPD entries. Therefore it will impact your home loan.

Tahir Malik
Tahir Malik
7 years ago

Which financial company can give loan without cibil check

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Tahir Malik

Now all financial institutions check CIBIL Score.

big boss cricket
big boss cricket
7 years ago

i have 4 credit cards (HDFC, CITY,AXIS & ICICI) all cards are blocked due to non payments and two cards are setlled and remaining are also been cleared in another two months.
however i have a personal loan which is 3 years past in another 6 months this also been closed.
Now i required a loan of 500000/- my monthly income is 47000/- shall i able to get any loan from any bank. i need it badly can u please suggest

Nitin Bhatia
Nitin Bhatia
7 years ago

I don’t think so that you can get another loan. Still you can check your CIBIL report before any conclusion.

Vipin Pandit
Vipin Pandit
7 years ago

Hi Sir,

I have a current CIBIL score of 831. During 2003 to 2009, when I was into a small business, I took many credit cards ranging from 15k to 150k, a home loan of 3 lacs, a couple of personal loans from 12k to 118k during this period. Due to business losses and over spending of credit cards I had to settle many of them. All the credit cards got written off and/or settled by paying a settlement amount. The home loan was paid on time without any delay. personal loans were also paid timely without any delay. Only 1 personal loan was settled when last 2 installment not duly paid. All these settlement and payments were completed by the end of 2011.

Since June 2011, I started working in a private company and since then my monthly income started increasing on a yearly basis. Currently I am earning well over 50k per month for the last 2 years.

I was well aware of the fact that my credit history is badly affected. To improve the same, I took a 2-wheeler loan in April 2015 which is being paid from my salary account on time and it would be finished in next month (i.e. April 2017). I took another 2-wheeler loan in December 2015 which is also being paid from my salary account (14 installments already paid till date).

Now, looking at my income and current credit score I am applying for a Home Loan from one of the private institutions. I am in a position to pay off my 2nd two-wheeler loan in one shot (which is about 42000). I am keeping my fingers crossed to get the home loan approved. What is your opinion about this? Please guide me if I can do anything else to get it approved. Thanks

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Vipin Pandit

In my opinion, your credit behavior may lead to denial of home loan. As i have not checked your credit report therefore cannot say the same with 100% conviction.

You should opt for Credit Score Masking of settled or written off accounts. To know more, check following link
https://www.nitinbhatia.in/improve-credit-score/

rajesh
rajesh
7 years ago

Sir,

My Cibil score in 753.I don’t have any loan as of now.Earlier i had personnel loan and home loan which i had defaulted around 10-12 installement.But later i have cleared and paid all my dues(I did’t done any settelement).i want to apply for home loan of 30lac so will i get the same,

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  rajesh

It depends how the personal loan and home loan is reported in your credit report. As i keep highlighting that banks check credit behavior and only good credit score is not sufficient.

Raj
Raj
7 years ago

Hi Sir,

Thanks for the information.
I dont have a credit card/past loans. But I earn 7 lakh per anum. And my father has a credit card but he never used it, but he has loans that he has cleared regularly. But his yearly income is 5lpa. We want to apply for home loan of 30lakhs. As I don’t have credit history, will bank (nationalized banks) approve my loan if I apply individually. If not can I include my father and I be a co-applicant and apply for joint loan. As my father has credit history, will our loan get approved.
Thanks in advance for your reply

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Raj

Normally banks don’t home loan in case credit history is not available. I suggest you to apply for secured credit card and then apply for home loan after sometime. Please check my following post for more details
https://www.nitinbhatia.in/personal-finance/secured-credit-cards-repair-cibil-score/

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