India’s most trusted financial worthiness metric CIBIL introduced by Trans Union metric is the leading and fundamental worthiness indicator for the financial institutes.
Banks and non-banking financial companies use the CIBIL score of the borrower for processing the borrower’s loan application. CIBIL is now become the mandatory requirement for borrower to show his or her creditworthiness.
Money Lenders use credit scores to determine a borrower’s creditworthy. If you manage your balance sheet well and have a better credit history, you can have a excellent score. For most banks, 750 or above is considered to be an excellent CIBIL Score for a Personal Loan.
Borrowers with lower CIBIL scores may have a difficult time getting loans from loan companies. They usually end up paying higher rate of interest on loans, or may even be refused by the lenders.
How is Your CIBIL Score Computed?
Lenders also use various criteria such as location, age, work-experience, income stability, nature of the employment, etc. to determine your eligibility. Despite that, when it comes to applying for a personal loan, having a great CIBIL score for loan approval goes a long way in attaining a nod from the bank of your choice.
Why is the CIBIL Score Important For Personal loan?
• Minimum Credit Score
CIBIL gets data from Banks and analyses the data to create a record for every individual and delivers a 3-digit score established on the same. Your CIBIL score can vary from 300 to 900 points score. The bigger your score, the better is your opportunity of securing loan confirmation.
Simply put, your CIBIL score is the measurable representation of your creditworthiness to a bank. It conveys to your lender how likely and competent one may be to repay EMIs as per the loan schedule. A lender will check CIBIL score and sort out the applicant’s risk factor and if proven non risky would be ready to give excellent offers on loans to applicant, who have hig h credit scores. It is not that, individuals with less CIBIL scores don’t get approval personal loan but it depends on banks and financial institutions, which are most likely to charge higher rates of interest and insurance compared to that of the higher CIBIL score once. Applicants with very poor credit history or defaults, will surely be rejected because banks wouldn’t take such risk of giving another loan to such an individual.
• Application Approval
A high CIBIL score acts as a catalyst in the transition of your loan application. When a lender receives a loan application with a high credit score, it will take less process time because credibility has already been proven.
This, in turn, will lead to a fast release of funds to you.
• Interest Rate
The personal loan rate of interest is the most crucial part when you are applying for a personal loan on CIBIL score. A borrower with an excellent CIBIL score is in an advantageous position. Anyone can potentially command a personal loan interest rate of choice and pick from a factual list of lenders who offer the most favorable terms and conditions for the loan.
Having authority over your personal loan interest rate can impact your repayment tenure in a significant way. By administering your personal loan interest rate, decision comes into your hands; how early you become debt-free.
You can control loan repayment rate and meet your deadlines every month. By timely repayment of your loans EMIs.you can also provide a strong boost to your credit score by doing so.
This will make you stand on good footing for the future, whenever you want to apply for a personal loan online on CIBIL score again.
• Loan Amount
The ticket size of your personal loan will also depend upon your credit score. The better your score, higher is the amount for which your loan will be approved.
In addition to the advantages, A better CIBIL score also ensures that your personal loan documentation process goes through with minimal scrutiny in the banks.
How can we Check CIBIL Score Online using Our PAN Card?
Apart from these, there are also some additional gains of having a good credit score. For example:
• These days, many firms perform credit checks before hiring candidates. A good credit score will add to your opportunities of getting a job.
• Many house owners and housing societies request for credit checks before agreeing to rental conditions and giving out a place to applicants.
• A lot of appliance rental companies also perform credit checks before offering a price to possible purchasers. Having an exceptional score will ensure that you get good offers.
• Thus, before applying for a personal loan online it is desirable to check your credit score so that you can be more ready.
For getting better personal loan, Its always important to maintain a healthy CIBIL Score which gives you advantage over your peers and with the financial institution to demand better loan conditions because of your credit worthiness created over the years. CIBIL Score in the present context of Personal has become next to mandatory and 700 above CIBIL score should be able to get personal loan easily.