Do number of credit card and high credit limit affect home loan credit limit?

[karthikeyanraman94]

Do number of credit card and high credit limit affect home loan credit limit?

Suppose i have 8 credit card and 15L total credit card limit and when Im eligible for home loan of 1Cr, do thy reduce the 15L and provide only 85L?

 

[RaviAglRaviAgl is verified member.]

Do number of credit card and high credit limit affect home loan credit limit?

Suppose i have 8 credit card and 15L total credit card limit and when Im eligible for home loan of 1Cr, do thy reduce the 15L and provide only 85L?

Not sure about India, but in Australia they do use this formula (happen to know about this as my brother is there and he recently applied for a home loan).

So, if you are going for a home loan, close unnecessary cards (keep the oldest one though) and keep your credit utilisation to a minimum. This will help you boost your credit score.

One more point, if you have purchased anything on EMI, and it is of little value, foreclose it before applying for home loan. Overall, you will be better off paying foreclosure charges rather than getting a higher rate of interest on the home loan (the amount sanctioned for your home loan will tend to be lower if you already have a burden of running EMIs).

Thanks!!

 

[ltf4ever]

I don't think so, because these factors are already considered in cibil and other scores.
so if you are eligible for 1cr home loan, that number is arrived at after considering this score.

Plus, home loan is a secured loan so it wouldn't affect the 1 cr. and that 15lac credit limit won't be subtracted (which is unsecured).

 

[jk51]

Do number of credit card and high credit limit affect home loan credit limit?

Suppose i have 8 credit card and 15L total credit card limit and when Im eligible for home loan of 1Cr, do thy reduce the 15L and provide only 85L?

Yes it does. Any form of loan sanctioned takes into consideration your overall existing credit exposure as well as repayment capacity. If you close some of your credit cards then not only it will boost up your score in terms of credit exposure but from banks perspective there’s more space for that EMI to get debited from that regular paycheck hence less risky applicant leading to better terms on loan.