Among every type of loan, Personal Loan is the unsecured one, taken by borrowers to meet their varied financial needs. It is known as an All-purpose loan as there is no restriction on the end use of the funds. Personal loans are used by borrowers for various motives such as debt consolidation, vacations, refurnishing their homes, buying a new appliance, to fund weddings, pay education or medical expenses etc. But Personal loans can be used judiciously thereby turning it beneficial in improving your finances and your credit score. There are some important factors to avail a personal loan. Among them cibil score is the most important factor. Higher CIBIL score will make you stand for a great chance of availing a loan at competitive rates of interest. Your positive CIBIL score provides you the power to negotiate with your lender. In fact, waiving off the processing and pre-payment charges can be done by some banks or lenders. On the other hand, a low score favours the lender, when it comes to determining the interest rate.
One of the most important parameters that facilitate your loan approval is your credit score and report. Since you do not have to provide a security/collateral to the lenders, there is a risk of losing money in case you default on your payments. Hence, careful analysis and evaluation of your credit history before approving your loan application is required by the lenders for 100% assurance. A CIBIL Score of 750 or more increases your chance of loan approval.
Tailor-made loan and credit card offers based on your CIBIL Score and Report can happen through CIBIL MarketPlace which is an online platform for lenders and borrowers. Here you get offers for Credit Card, Personal Loan, Home Loan, Gold Loan and Loan against Property, based on your eligibility criteria. You can also compare interest rates, credit limits, annual fees and other features of an offer and apply for your preferred loan or credit card with the participating bank/financial institution, at CIBIL Market Place, all at one place. Therefore, your CIBIL Score plays a critical role in the loan approval process. Before approving your loan application, lenders always check your CIBIL Score. Higher your CIBIL Score, higher are the chances of your loan approval. There are occasions in life where you need access to additional finance to fulfill your short and long-term goals. Your short term-goals may include home renovation as well as going on a vacation, and long-term goals can be buying a home or marriage. A personal loan is an ideal funding option to address these goals. However, prior lending, financial institutions look at certain parameters to measure your creditworthiness. CIBIL score is most significant among them.
Your financial journey will affect various aspects of lending and this is integrated with your cibil score . You can connect with a financial advisor to know the importance of CIBIL score, while availing a personal loan.
Your Creditworthiness indicates your loan eligibility
The first impression to your prospective lender about your creditworthiness goes from your CIBIL score. It tells them whether you can repay the loan on time or not. While a high score implants a sense of confidence among lenders, a low score raises a red alert which proves that you cant avail a personal loan with a low credit score. However, it will come with various terms and conditions attached. A high score brings about eligibility for a higher amount and also leads to minimum documentation and hassle-free borrowing exercise is ensured. The cibil score ranges between 300 to 900. If you are closer to 900, the better are the chances of your loan approval.