If you are a first-time borrower who requires an instant loan, you may have heard the term CIBIL score from your lender. You must have been informed that having a good CIBIL Score improves your chances of availing an instant personal loan.
Instead of worrying about the fact that you may be unaware of this term and its implications, it is important to know what a CIBIL Score is and how it is calculated?
To start with, a CIBIL score is a numerical representation of your creditworthiness. It is a three-digit number that is assigned to you by CIBIL, based on your credit history. A high CIBIL score indicates that your creditworthiness is high, whereas a low CIBIL score signifies otherwise.
If this score determines your creditworthiness, how is the CIBIL score calculated?
There are a few factors that determine the calculation of your CIBIL score. Each of these factors has a certain amount of weightage attached to them. Based on these factors, you can find your CIBIL score.
Your repayment history holds the maximum weightage when it comes to calculating your CIBIL score online. If you have repaid your bills and past loans on time, it would indicate that you have a good repayment history with your lenders.
Credit Balance and Utilisation
Your credit utilization factor is the second factor that holds high weightage when it comes to your CIBIL score check online. Credit utilization will be the amount of credit that you have used from the available credit balance that has been assigned to you. In an ideal scenario, you should utilize at least 30%. If this percentage increases, it indicates that you may be struggling with your finances and can come across as credit hungry.
Duration of Credit
The duration of credit is the tenure you require to repay a loan or credit availed. If you have availed personal loan for 4 years and successfully repaid the EMIs on time, it will have a positive impact on your CIBIL score.
Did you know that constant credit or loan enquiries can affect your CIBIL score? If you are continuously approaching lenders to avail of a new loan or applying for a new credit card, the chances of your CIBIL score falling are higher.
A healthy and balanced credit mix will be a combination of secured loans, personal loans, credit cards, etc.
CIBIL scores range from 300 to 900. Where you stand on this numeric scale will get you your instant personal loan approved.
Chances of approval
Less than 650
If your CIBIL score is less than 650, the chances of your personal loan being approved are very low.
This range is considered to be a good range. A score between 650-699 indicates that you have decent creditworthiness and the chances of loan approval are good.
A score between 700-749 indicates good creditworthiness and the chances of your loan being approved are high.
Anything above 750 would mean that you have excellent creditworthiness and that you have not defaulted on any payments to date.
A good CIBIL score range is between 700 and above. This, though, may not be possible for everyone. However, if you wish to avail of an instant loan with a low CIBIL score, you can do so through Finnable.
If you are applying for a loan for the first time, chances are you may not have a CIBIL score. If you find yourself at that end of the spectrum, you can have a NA (Not Applicable) or NH (No History) mentioned in your online CIBIL report.
Through Finnable, you can avail of an instant loan without CIBIL with NA/NH rating in their report as well.
Now that you have understood how the CIBIL score works, where can you find out what your score is?
You can check your CIBIL report online.
Checking your CIBIL score online is simple. Just by following a few steps, you can generate your CIBIL report as well know your CIBIL score:
Though many lenders’ disbursing instant personal loans ask for a CIBIL score, this is not the case with Finnable.
Finnable understands that everyone cannot have a high CIBIL score or even have a CIBIL score at the start. Hence, they have made it easy for people to avail of instant loans with a low CIBIL score. This can be done through Finnable’s personal loan app by following a simple 3-step process:
You can avail of a wedding loan, travel loan, medical loan, and vehicle loan through Finnable’s online loan app.
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Example of Personal Loan for Salaried Professionals✓ Loan Amount from ₹50,000 to ₹10,00,000✓ Repayment period (loan tenor) options vary from 6 to 60 months ✓ Annual Interest Rate (APR) is 16% to 26% (on a reducing balance basis) + processing fees of 3 to 4% on the principal loan amount ✓ For Example – a loan of ₹1,00,000 with an APR of 16% (on a reducing balance basis), repayment tenure of 12 months, processing fee of 3%. The processing fee will be ₹3,000 + ₹540 GST with monthly EMI will be ₹9,394. The total loan amount will be ₹1,03,540. Total interest payable over 12 months will be ₹9,191. Total loan repayment amount is ₹103540 + ₹9191 = ₹1,12,731 *These numbers are for representation only and the final interest rate or processing fee may vary from one borrower to another depending on his/her credit assessment.✓ Loan Prepayment Charges: 3 to 6% charge + 18% GST on the remaining principal amount (allowed after 6 EMI payments)Why is Finnable the best personal loan app?Instant Loans within 48 hours: Gone are the days when you had to wait weeks & months to get a loan approved.Completely Digital/Paperless: Finnable instant loan app offers a complete digital service to help save time as well as paper!
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