Personal loans are unsecured loans unlike home loans. This leaves the banks to grant you loan only on the basis of your credit history, repayment of debts, credit card payments and number of ongoing loans. And all of this is determined on the basis of your credit score given by CIBIL. The credit score ranges from 300-900, with 300 being on the lower end and 900 representing the higher end. Let’s assume, if you have a credit score of 350, there’s no way the banks will accept your request for a personal loan. On the other hand, if you’ve a score of 750 and above, you’re likely to get the loan without any difficulties. A high credit score translates the fact that you’ve paid your credit card bills on time and your credit record is clean. So, 700 is considered as the minimum CIBIL score for personal loan. Below this, you’ll have difficulty getting a personal loan.
How Important is CIBIL Score for Personal Loan Application Process?
Trust is an important factor whether it is with regards to relationships or business. Banks trust you with the loan money on the basis of your CIBIL score. Trust, nowadays, is synonymous with CIBIL Score (at least in respect to banking). CIBIL is extremely imperative in the case of personal loan. This is because personal loans are unsecured loans, which means they are given without pledging of any security or collateral. So the only way that the bank has confidence in you with its loan amount is the CIBIL Score. It is highly recommended for those who don’t care much about their credit profile, it’s high time you buck up. All of us have dreams and to be honest they can’t be fulfilled by just our savings. We will require personal loans to achieve them. And that is where maintaining a good CIBIL score for personal Loan will help.
Why maintaining a good CIBIL Score for Personal Loan is important?
Credit Worthiness: Maintaining the minimum CIBIL Score for personal loan gives your lender the assurance that you’ll repay the loan in time. It helps lenders assess your credit-worthiness. Whereas, a bad credit score will put you in a tough spot where the chances of you getting a loan is dicey. However, you might be able to get it on the grounds of some terms and conditions.
High Loan Amount: A person with a high credit score can negotiate for a higher loan amount. On the other hand, this privilege is not applicable to a person with a low credit score. Here’s you incentive to receive more funds in your hand.
Rate of Interest: Since time, being good has always an edge over being bad. Similarly, a good credit score puts you in a sweet spot with the bank. It puts you in a position where you can negotiate with your bank regarding the rate of interest. You can demand a low rate of interest if your credit score is extremely good.
Processed with Ease: If you possess a good credit score, the bank approves your personal loan easily without any terms and conditions attached to it. Once it has a vivid picture of your credit health, the funds are released into your account in a short period of time.