A personal loan is one of the most common borrowing options for people seeking funds for a variety of personal reasons. In India, some of the best personal loans help borrowers access a high-value sanction which is done online and within a matter of minutes.
Among the many factors, this ease of access is totally dependent on your eligibility, of which one of the main factors is the credit score. Usually, lenders in India will require the borrower to have a minimum CIBIL score of 750. The higher the CIBIL score, the easier will be the qualifying time for these loans to process.
What is CIBIL score?
It is a three-digit credit score assigned by TransUnion CIBIL Limited. CIBIL score or credit score is a number that lies on a scale from 300 to 900 points. With these points, based on your credit history, lenders are able to decide a person’s credit worthiness or capacity to repay a loan. Then they accordingly decide on loan eligibility and applicable loan terms.
A credit score above 750 is considered excellent and can get approval for a personal loan at lower interest rates. However, if your CIBIL score is below 750, an individual can still apply for a personal loan, but the chances of interest rate might be high.
The CIBIL score is calculated on 4 key factors, which are:
- Frequency of loan inquiries: Individuals with multiple credit inquiries or past loans can have a negative effect on the score as it signifies that past loans might add up to the current
- Payment history: If an individual has a credit history that reflects late payments or defaults is likely to lower your credit score
- Credit utilisation: Borrowers who utilise a high percentage of their assigned credit limit indicate a rising dependency on credit. This can also be another negative factor that can affect the credit score
- Credit mix: To have a positive impact on the credit score, an individual should have a balance between secured and unsecured debt
Steps to calculate CIBIL score for free:
Step 1: Log in to the CIBIL website https://www.cibil.com/ and click on the tab ‘Get Your Free CIBIL Score & Report’
Step 2: Create an account by entering your personal details, such as name, email ID, ID proof, PIN code, and phone number
Step 3: After creating an account, click on the ‘Accept & continue’ tab. You will receive an OTP on the registered mobile number
Step 4: Enter the OTP and complete the verification process (Before that you will be directed to a new window, where it confirms your enrollment)
Step 5: Finally, click on the ‘Go to Dashboard’ option to view your credit score.
from Firstpost India Latest News https://ift.tt/3p1jRzU
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