A credit score is a set of numbers between 300-850 which depict the creditworthiness of a customer. The higher the score the better the image and potential of the borrower. The credit score also depends on the credit history of the client. A total number of open accounts, total levels of debts, the repayment history, etc affects the credit score of a person. A credit score is evaluated first by the company before approval.
The FICO is a scoring system that is used by many financial institutions. The defaulter is considered troublesome and can have a wide range of impacts on their lives and finances. The credit score is a part of signs that are pointing towards their poor financial life.
A personal loan calculator can be used to predict how much a personal loan can cost you as you pay it back every month i.e. it gives the basic pieces of information regarding the loan taken. Savings are saved for the future when an unfortunate situation comes where a person is unavailable to keep up with the funds.
Some of the factors with which a defaulter can get a personal are:
Good salary: A person's salary is a very important aspect of income. when the person has a poor credit score and if he has a good salary, then the person can apply as he has a better chance of paying back the amount, and the company may provide the fund regardless of the CIBIL score.
Using your partner’s credit score: When the credit score of an individual is low and his requirement for a loan is crucial, then if their partner’s credit score is good whether it's a husband or a wife’s, with their assistance your loan can be approved.
With collateral: Normally a personal loan is unsecured, i.e. a person doesn’t always require to submit collateral in the form of assets like a house, car, property, gold, etc. But when that person’s score is less than the expected score, the person can choose to keep collateral in the form of security for the company’s money and get the assured personal loan. TATA capital personal loan also provides a range of deals for defaulters.
Backup by a guarantor: When you are stable and good financially, but the credit score is poor and the loan can’t be grabbed, you can ask for a loan backed by a guarantor. A guarantor should have a good credit score. This will reduce the risk of giving you a loan. But when you choose this method and you become default again then the guarantor will have to repay the outstanding balances.
Raise income: Your credit score can go down if you don’t pay your EMI on time, and when that happens and you don’t get the loan. But if you do find a high-paying job or high-income job, discussing it with the bank can sometimes approve the loan.
Consolidating the debt: If a person has multiple loans on their heads this can lead them to be on the defaulter’s list. But to come back to the normal range of credit score, one can use personal loan money to repay the previous loan i.e. to consolidate the previous debt.
Conclusion: A credit score is a number that can save you from either a lot of money or cost you money, and if you are on the defaulter’s list and wants to take the loan, you can opt for the above-said methods. Some other notable points are withdrawn provident fund, salary advance, peer to peer borrowing.
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