MCLR is the minimum interest rate of a bank below which a bank cannot sanction the loan.
If you have been planning to buy a house for yourself and also have a good credit score, then Bank of India is the place for you. Bank of India will offer preferential pricing rates to borrowers with good CIBIL scores for home loans of Rs 30 lakh and above. The state-run lender in its official statement said that it will offer cheaper home loans to customers with good credit score.
Customers with a score of 760 and above will be offered loans at the minimum home loan interest rate or the marginal cost of leading rate (MCLR) for a year. MCLR is the minimum interest rate of a bank below which a bank cannot sanction the loan. The lowest home loan rate given by BOI is of 8.40 percent per annum.
Moreover, for people with a score of 759 or less, the rate of interest for loans of Rs 30 lakh and above will come at MCLR plus 0.10 basis points for a year. One basis point is 100th of a percentage point.
What is CIBIL score?
The state-run lender said borrowers availing home loans of over Rs 30 lakh will be benefited from the reduced rate of interest. A consumer’s CIBIL score is a three-digit numeric summary of the credit information report (CIR) summarising the past credit behaviour and repayment history and ranges from 300 to 900.
Consumers need to note that the higher the credit score, the better are the chances for them to get their loan sanctioned. Most banks check a subscriber’s CIBIL score and report before approving a loan.
“Consumers with a good credit discipline should be rewarded, as it helps to propagate the importance and need to maintain a good financial history. Our preferential pricing model aims to reward high-scoring home-loan aspirants with competitive ROI, thereby helping them making their dream home a reality,” Bank of India said in a statement.
Credit information company TransUnion CIBIL’s Head of Direct to Consumers Interactive Hrushikesh Mehta said: “Bank of India’s CIBIL score-based incentive helps further highlight the need to monitor and build a positive credit profile through good credit habits.”