There are times when you need an extra pocketful of cash to buy the things you want and need. Whether it’s for a marriage, buying a house, a vacation or home renovation, or just to keep your head above water financially until your next paycheck arrives, a personal loan can help you fulfill your financial obligations.
If you’re looking to avail of a personal loan, one of the most important things a lender will check is your CIBIL score for loan approval. A Credit Information Bureau of India (CIBIL) score is a report card to check a person’s credit history and financial stability. Banks, lenders, and other financial companies use it to make decisions about accepting or rejecting customers for loans and efficiently deal with them. The CIBIL Scorecard helps with developing credit by establishing your credit history.
While there are other credit scores, such as CRIF Highmark, which are equally accurate, CIBIL is more widely known in India. CIBIL gets data from financial institutions and analyses the data to create reports for every individual and delivers a 3-digit score based on the same. The CIBIL score range is between 300 to 900, and when your CIBIL score is 750 or above, you can easily qualify for the best loan offers.
CIBIL score is important because it can help you get longer loan tenures
Creditworthiness is the most important factor in your CIBIL score. It is a reflection of your ability to manage your finances. If you have a high credit history, you are more likely to be approved for an auto loan or other type of loan.
When it comes to credit, you must have a good track record. The best way to get a good credit score is by paying off all your bills on time and keeping them current. If you are behind in payments, this will lower your score when you apply for new loans or credit cards.
2. Application Approval
The CIBIL score is an important factor in your credit history. It reflects how well you have paid off your loans and how much you pay back on time. This score also helps lenders decide which type of loan they should give you.
If you have a low CIBIL score, then it may be difficult for you to get approved for any loan or credit card. You may even face rejection from some lenders if they find out that you have been late in repaying them and have accumulated a high amount of debt.
However, if your CIBIL score is high, then it will help improve your chances of getting approved for an upcoming loan or credit card. This will help improve your financial standing and reduce the risk of incurring more debt in the future.
3. Interest Rate
Lower interest rates are a result of a good CIBIL score, which increases the credit quality of your loan and lowers the interest rate that you pay. This is because banks want to keep their customers happy and in turn, get them to stay with them for as long as possible.
In addition, lower interest rates mean better financial stability for borrowers, which will encourage them to borrow more money in the future.
4. Loan Amount
The CIBIL score is important because it determines how much you can borrow. If your CIBIL score is higher than the bank’s requirement, then you can borrow more money. So, if you want to buy a house or car, then having a good CIBIL score will definitely help you in getting the loan amount that you want.
5. Longer Loan Tenures
CIBIL score is important because it can help you get longer loan tenures. If you have a good CIBIL score, banks will give you loans with longer tenure. With longer loans, you are more likely to repay your loans on time, but you might be charged a higher interest rate.
If you have a bad credit history, the banks will not be able to provide you with any loans. They will only allow you to get a small loan amount and leave it at that. This means that if you need more money than what they offer, then you will have to wait for them to approve your application again next time around.