Bank of Baroda, which announced lowest rates on home loans, will be the first bank to link interest rates on home loans to credit scores of borrowers. The bank will initially rely on credit scores of Credit Information Bureau of India (CIBIL) wherein those with scores above 760 points will be charged 8.35%. Other banks are likely to take a cue from BoB's latest initiative.
Customers of BoB having credit score in the range of 725 to 759 points will be charged 8.85% while those having credit score below 724 points will be charged 9.35% on home loans. First-time borrowers, with no credit history with any credit information bureau, will be charged 8.85%. Officials from the bank who did not want to be named said that it wanted to reward customers with better rating by offering them better rates. The new rates charged by the bank is irrespective of the tenure and the amount.
