Quick solutions for funding can often come via personal loans. These are the most common types of loans taken by individuals. Unsecured loans as you don’t need any collateral against the loan you take, personal loans may be availed of for any reason from paying for a holiday to home renovation. Since a personal loan is an unsecured loan, lenders take a significant amount of risk. Hence, lenders need assurances that loans will be repaid. This is where CIBIL score checking comes in.
About Eligibility Criteria to Avail a Loan
One of the key aspects of availing a loan is for the borrower to fulfil key eligibility criteria. One of the main criteria to avail a personal loan is to have good financial standing. If you have creditworthiness, you get loans faster and easily. Furthermore, you get flexible tenors between 1 – 5 years and low interest rates. To show that you are in sound financial health, you need to have a satisfactory CIBIL score. Checking this score will be the primary goal of your lender when you apply for a loan.
What is CIBIL Score and its Importance?
Established in 2000, TransUnion CIBIL is an agency that assigns each individual a rating in the form of a numeric code. This rating translates to a person’s credit history and consequent financial status. The numeric code is a three-digit number (from a range of 300-900) and this number has a report of an individual’s financial history attached. Whatever product you apply for, be it a credit card or a loan, banks will have information they can access of your full history of financial transacting. You, as an individual, can check CIBIL score by PAN card, by visiting the CIBIL site. It’s importance lies in maintaining a good score so you don’t have any problems getting loan approval.
A Good CIBIL Score
By the standards of banking and other financial institutions, a satisfactory CIBIL score is one that is in the range of 700-750 or more. Such a score gives any lender an indication that your financial track record has been consistently sound. If you have a low CIBIL score in the range of 550, there are ways to increase it. Here are some ways:
- Settle old loan repayments/debts
- Don’t overspend in case you have a credit card
- Get a guarantor to back you
It’s a good idea to check your CIBIL score on the CIBIL website regularly, and you can check CIBIL score by Pan Card. You need to enter PAN Card details and follow a menu-driven process. You can get loans with low scores of 550, but you should be prepared for higher interest rates and shorter loan tenors. With low scores, you may also have to be compelled to take a loan of a smaller amount than you’d get with a high CIBIL score.
You may face challenges in getting loans with low scores. However, some lenders may be prepared to give you loans. It’s better to always see your finances are in order so your CIBIL score remains decently high. You can get more comprehensive information at Finserv MARKETS.