Here is a quick take on the relation between a personal loan and the all-important CIBIL score. Go, have a look and know more!
When there is an expensive emergency such as a medical emergency and if you don’t have funds to cover it, what are your options without losing self-respect?
Yes, you guess it right! You can always take a personal loan which lenders approve quickly if you meet the eligibility criterions along with a strong CIBIL score and furnish all documents online.
If you have a good credit score, banks and non-banking finance companies (NBFCs) approve your online personal loan application instantly and offer you a low-interest rate.
If you don’t have a good credit score, you may still get the personal loan under some conditions, but on a high-interest rate.
A good CIBIL score is 700 or more.
Thus, CIBIL score forms an indispensable factor in your path to approval of the personal loan.
So what is CIBIL Score All About?
A CIBIL or the credit score is the usually the indicator of your credit history. Lenders also consider a CIBIL score as the indicator of your financial health. It is a three-digit numeric number.
A credit score ranges between 300 and 900. A credit score of 700 or more is a good CIBIL score.
Based on your repayment history and the CIBIL score, a personal loan service provider decides if you qualify for a personal loan or any type of loan or a credit card.
You should know that a personal loan is an unsecured loan for which a borrower does not need to provide any type of collateral, security or guarantor to vouch for the repayment.
As a result, it is mandatory that you meet the entire eligibility criterion and one of the most important ones is maintaining a strong credit or a CIBIL score.
Personal Loan on a Good CIBIL Score
If you want to apply for personal loan and have a score beyond 700, you have a bright chance of a loan approval from prospective lenders and at a low-interest.
You have always paid all your repayments in the forms of EMIs or bills on time, and your good credit score is the indicator of this.
It also means that it is the time to reap the rewards of a clean repayment history. Yes, creditors are bound to heap loan offers with best interest-rates as the trophy.
With a good credit score, you have all the freedom to make a choice between many lenders and apply to one with the best interest-rate and as per your repayment capability.
Personal loan on a low CIBIL score
If you are in the urgent need of a personal loan and have a low credit score, the banks and NBFCs can still approve your online personal loan application.
Yes, although a good credit score is the most important parameter of a personal loan approval, you can still obtain a personal loan. How?
If you have a decent income, sufficient bank balance, regular salary and at least 2 years of employment history with a known employer, a lender may approve your loan.
However, there may still be a catch that you need to consider. The interest-rates for such online personal loan applicants may be higher than what you could have got on a good credit score.
The Bottom Line
Now you know the basics of a decent and a bad CIBIL score.
You can either go or apply for personal loan if you have a good score or wait and implement some corrective measures such as repaying the old debts to improve.
Always remember that maintaining a healthy CIBIL score will lead to fruitful dividends in the financial spheres.