Banks Concern Good Credit Score for Lending Loans

Banks are getting more cautious about lending loans to the customers. It is observed that banks are picking customers in order to avoid low interest rates. They are more concerned about the credit score of the applicant while prefer lending loans to those with only the high credit score.

Leading credit agency CIBIL has reported that, over 88% of home loan borrowers in 2011 had a credit score of 750 and above. It also shows that the share of those home loan borrowers who have taken home loans with a credit score of about 800 rose to 62% in 2011 from 23% in 2008.

Now, most of the banks offer home loans at floating rates linked to the base rate set by banks. These banks largely depend on the prevailing interest rate scenario. Moreover, the borrower in the current scheme gets to pay less only when interest rates fall.

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