Many people apply for loans and credits from financial institutions for financial assistance. The financial requirements may be for various reasons like buying a home, debt consolidation, financing higher education, travel expenses etc. However, to get a loan, you need to make sure you fit in the eligibility criteria set by the lender. One of the significant considerations for eligibility is your credit score. With a good credit score, you can easily avail a loan of your choice as you will be considered creditworthy by the lender.
Your CIBIL report and CIBIL score are what sets the first impression in front of the lender. It is a three-digit number that is calculated based on the financial history of the loan borrower. CIBIL score ranges from 300 to 900, having a higher score makes you more eligible to avail a loan. Usually, a credit score in the range of 650 to 850 is considered as a good score by the financial institution. A score lower than 550, will strongly curtail your chances of getting your loan application approved.
- An applicant with a score above 760 means Excellent Credit
- An applicant with a score above 700 means Good Credit.
- An applicant with a score above 640 means Fair Credit
Most of the loan applications get approved based on your CIBIL score. The score indicates your financial payment behaviour. The loan application approval is strictly based on a score only individuals with a credit score of about 750 and above are sanctioned for a loan.
Advantages of CIBIL Score
- Smooth Loan Application
A good CIBIL report and credit score help in getting all kinds of loans and credits from lenders quickly. When you apply for a loan, the lender usually runs a check on your credit history and report. When they look at a good credit score and a history of timely repayments on your report, the lender is assured of your ability to repay the loan amount, and the loan application gets processed quickly.
- Quick Loan Approval
To get quick approval on your loan, you need to have an excellent credit score. A good score will boost the speed of your application process and makes you an ideal prospect to lend money. This way, you can get a loan quickly in case you need money for emergencies without facing any delays.
- Low-interest rate Credits
You can get lower interest rates on loans, which help in reducing the chunk of EMI that you need to pay every month. With a good credit score, you can lower your financial burden with ease.
- Easy Negotiation
When you get a loan, you look for lenders that offer you a loan at a lower rate of interest. With a good score, availing a loan becomes easy; this increases your chances of negotiating with your lender for a lower rate of interest on the loan amount.
- Avail a Higher loan Amount
If you have a good score and require a high loan amount, you can improve your chances of getting the loan approved at a low rate. For a higher sanctioned loan amount, it is essential to have a good credit score. With a good score, the lender sees you as a responsible borrower, and they allow you to avail a more significant loan amount with ease.
Check CIBIL Score
To have a good CIBIL score, you need to maintain a good credit history. It’s best to have a habit to check and keep a track of your CIBIL report. Ensure that you inform the CIBIL bureau to update your name’s spelling, surname and other such details correctly. You may also choose to raise a CIBIL dispute and state any errors in your CIBIL report to be corrected, this report is an essential document that determines whether you are eligible for a loan. As per the regulations set by the RBI (Reserve Bank of India), all banks must check with their CIBIL report before the loan application is approved. Hence, you need to keep your report up to date.
Also, keep in mind to avoid applying with multiple lenders within a short duration. Every bank and financial institution follows the usual procedure to check with the borrowers CIBIL Score and CIBIL Report before approving a loan. By applying for a Bajaj Finserv personal loan with the Finserv MARKETS app, you can get a free CIBIL Score check, with a Financial Health Check Report where you get a report of your finances and apply for a loan accordingly. The loan process is carried out online and is quite simple and easy. At Finserv MARKETS you can avail a collateral-free loan amount ranging between Rs. 25 Lakhs to Rs. 40 Lakhs using personal loan app. The interest rates on personal loans start from as low as 9.85% per annum. The repayment tenure is flexible where you can choose your tenure and repay the loan amount with ease.