Yes, you can apply for a home loan even if you have bad credit, but approval is more challenging. It actually depends on how low your credit score is and other financial factors. In India, if you see, lenders typically prefer a CIBIL score above 700 to 750. But having a lower score doesn’t completely block your chances. It just affects terms, approval chances, and interest rates.
Is It Possible to Apply for Housing Loan with Bad Credit?
Yes. A “bad” credit score usually refers to a CIBIL score below about 650. This suggests past credit issues, like late payments or defaults, making lenders view you as a higher-risk borrower. Some lenders (especially NBFCs or housing finance companies) may consider applications with CIBIL scores in the 550 to 650 range, though they often apply stricter conditions.
In India, excellent and bad credit scores are often defined by the following ranges:
750 to 900: Excellent
700 to 749: Good
650 to 699: Fair
550 to 649: Poor
Below 550: Very Poor
With a poor score, expect higher interest rates to offset lender risk. Lenders might sanction a smaller loan amount than you applied for. You may need a longer income history or stronger proof of repayment capacity.
Ways to Improve Home Loan Approval Chances
Include a co-applicant with a good credit score to strengthen the application.
Make a larger down payment. This reduces the lender’s risk.
Reduce existing debt: Repaying outstanding loans helps improve your profile.
Consider a guarantor: A guarantor with strong credit can increase your approval odds.
If time allows, improve your credit score before applying by paying bills on time and lowering credit utilisation. I hope this answers your query about can I apply for home loan with bad credit.
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Can I Apply for Home Loan with Bad Credit?
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2025-12-30T19:17:57+00:00 2025-12-31T09:41:05+00:00Comment
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