A bank or NBFC (Non-Banking Financial Companies) assesses their risk which they will have to consider if they grant the personal loan. A personal loan is an unsecured form of a loan. The risk for the lender is high while granting a personal loan. The banks and NBFC (Non-Banking Financial Companies) consider the credit profile very thoroughly.
Many personal loan applications are rejected due to a lack of good credit history. Credit Information Bureau India Limited, popularly known a CIBIL, prepares this report that confirms the creditworthiness of an individual. A credit report is attached to the loan application while applying for a personal loan.
This credit report includes the credit history of an individual. The credits that were taken before, repayment pattern, and amount due outstanding, these things form an integral part of the credit report. The lenders will specifically check for any delays or defaults made by the individual in the past.
The credit report has a three-digit summarized number known as the CIBIL/credit score. The range of the credit score is from 300 to 900. Every delay or default you make will be immediately reflected in this score. Ideally, the score that is required by the banks and NBFC (Non-Banking Financial Companies) is 750 and above. With a low credit score, a personal loan can be availed only at a high personal loan interest rate. Your credit report plays a huge role in convincing the bank or NBFC (Non-Banking Financial Companies) to provide you with a personal loan.
You can get SBI personal loan policy with a minimum credit score of 650 and still enjoy the benefits of the low personal loan interest rate.
Having a good credit history and a credit score above 750 is not the end of the story. It is important on your path to maintain this score in the future as well. Any delays or defaults may deteriorate the score you have now.
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