Mr. Sunil had been running from one bank to another since March to get a home loan. He wanted to renovate his ancestral property and gift it to his daughter before she gets married. His daughter Sunita had planned to get married in a year. With tight deadlines, Sunil was running pillar to post trying to get a home loan for their ancestral house. The huge ancestral property required large sum of money for repairs and renovation.
CIBIL score was the reason Sunil’s home loan wasn’t getting approved in any financial institution. He rarely used his credit card and had never gotten a loan, so he had no repayment history. Which is why his CIBIL score was low. He had a credit score of around 650, and all the banks required the applicant to have a credit score of 750 for any loan to be approved. This mattered all the more because this is a home renovation loan and is for Rs.20 lakhs.
Only once Sunil started learning about CIBIL did he get to know that the score reflects his credit-standing in the Indian market. And CIBIL score is the most important criteria, after income statement, for a loan to be approved. Credit score shows the income, credit dependency and repayment pattern of an individual. Now that Sunil was in a fix and had to get a home loan, his friend recommended he approach Piramal.
Piramal Capital and Housing Finance, a subsidiary of Piramal Group, offers four housing loans.
- Purchase of a new house
- Construction of a house
- Home renovation
- Transfer of home loan
They were offering what Sunil was looking for. He approached Piramal Housing Finance for home renovation loan and guess what? Sunil’s home loan was approved this time! His happiness knew no bounds. Soon after, when he called up his friend on the phone to share the good news with him his friend said, “I knew your home loan would be approved in Piramal. They accept loan applications whose CIBIL score is above 650. They give everyone a chance.”
Here’s what Mr. Sunil checked before applying for his home renovation loan with Piramal:
What are the key features of Piramal Home Renovation Loan?
Simple application process
Simple application process always makes loan processing faster. This is what Sunil wanted. Funds to be disbursed to his bank account faster so he can begin renovating his ancestral house. It would take quite a few months for the work to get done and he wanted to make sure he had ample time to take care of his daughter’s wedding arrangements later on.
Flexible loan tenure
Since Rs.20 lakhs and the interest of 9.75% on Rs.20 lakhs is a huge amount of money to be repaid to the borrower, Mr. Sunil wanted to make sure that he had ample amount of time in which to repay. He was a businessman and businesses in Covid times are unpredictable. With flexible loan tenure, he could heave a sigh of relief.
Flexible repayment options
The Piramal Home Renovation Loan helped him sort out his home – his palace, from which he is then able to plan his other major expenses and events like Sunitha’s wedding, etc. – and like any Indian family, they had other expenses as well. It made sense to keep the EMIs low, so he opted for a longer loan tenure.
Also, since he already had a low credit rating, he had to make sure he was making prompt EMI payments to increase his credit scores. With flexible repayment options, Piramal gave him the freedom to take care of all aspects of his borrowing.
Rate of Interest
Interest rate for home renovation loan is starting at 9.75% p.a.
What are the eligibility criteria to avail Piramal’s home renovation loan?
Since Mr. Sunil was self-employed, here’s what at the bank looked at:
Applicant age – 23 – 70? Check.
Adequate income? Check.
Adequate credit score? (Low score of 650), but check!
- Self-employed professionals fall in the category of MBBS, MD, MS, Architect and CA.
- Self-employed non-professionals are business owners, Partners in a partnership firm, Proprietorship, and, Promotors of Private and Public Limited Companies that are held closely. Director of Public listed companies do not qualify as self-employed since they are salaried.
What are the documents required for Piramal Home Renovation Loan?
Any home loan application would require relevant documents to be submitted to the lending institution. A simple and easily available list of documents that Mr. Sunil had to carry along with the duly filled home loan application were:
- KYC Documents – PAN card
- Bank statement of the last 6 months
- Form 16
- Financials of the previous two financial years as audited by a CA
- Documents of the property submitted as collateral to receive the home renovation loan
So don’t worry if your credit score is below 750 – you can still get a home loan!