A personal loan is an unsecured loan that is taken by individuals from either a bank or an NBFC to meet their financial requirements. But, before applying for the loan from the specific moneylender, you need to consider a few necessary factors such as reliability of the institution, rate of interest, time taken for the loan disbursement, etc. On the other hand, the financial institution also verifies the eligibility of an individual applying for the loan. The eligibility criteria mainly consist of id proof, income verification, credit score, etc. An applicant can avail of the loan if they have a high CIBIL score i.e. you should focus on maintaining a good credit score to be considered eligible for NBFC personal loan.
The majority of the public is not aware of the CIBIL score and its significance. In this context, all facts and figures related to the CIBIL score are described in brief.
What is meant by the term “Unsecured Credit”?
If an applicant is searching for an unsecured loan, then he/she must earn a good salary per month. However, a major hurdle faced by applicants is a high ROI or rate of interest. Banks would take into consideration the risks involved while granting an unsecured loan with a higher rate of interest. There are situations during which banks would reduce the loan amount.
Significance of credit score
A credit score is one of the major factors that are taken into consideration by the moneylender for loan approval. They use two ways to monitor the credit scores of the applicant.
- Soft check or soft pull: In such cases, NBFC procures an individual’s credit score through various means.
- Hard check: When an individual applies for a personal loan, the concerned bank or NBFC have full authority to pull out an applicant’s credit score along with the report that might affect the credit score of an individual.
Role of the CIBIL score in a personal loan
CIBIL score is a three-digit numeric score that rates the creditworthiness of an individual. This score is assigned to each credit holder residing in India to reveal his past records associated with loans. The Credit Information Bureau India Ltd. is responsible for generating the CIBIL score of an individual based on outstanding dues and a diverse range of credit availed. One should pay close attention to prompt payment of EMI’s. Repayment of loans within a stipulated time enhances the credit or CIBIL score of an individual.
Importance of an alternate credit-scoring model
The Credit-scoring model lays special emphasis on the usage of mobile phones and financial information. This is helpful in making sure that each applicant with a poor credit score has access to a personal loan through an online portal.
Factors responsible for a bad credit score
Some of the major reasons behind a lower credit score are due to the following:-
- Overutilization of credit limits would have a negative impact on the CIBIL score of an individual.
- Multiple unsecured loans also pose a drastic impact on the creditworthiness of an individual.
- Default payments are also responsible for a bad credit score.
What is the outcome of a lower credit score?
When an applicant possesses a poor credit score, it implies that he/she is a risky client and concerned banks will be reluctant to provide a loan. Despite having a bad credit score, there are authentic online lenders such as Money View who offer loans at a competitive rate of interest. Unlike other moneylenders, Money view is a reliable and trustworthy online lender as they are looking for people with a minimum CIBIL score of 600 and an Experian score of 650.
What are the various options available for an individual with a poor credit score?
One of the best options available for people with poor credit scores is to pledge assets like gold in the form of collateral securities against property. This type of loan is known by the name “secured credit” wherein potential risks are minimum. Although it is quite difficult for an individual securing a bad credit score to obtain loans from a bank, Money View is the only reliable online money lender that provides it with minimum risks involved.
What are the ways to select a reliable moneylender when an applicant has a lower credit score?
- It is suggested to perform comprehensive research regarding online moneylenders and go through the reviews posted by each customer.
- You need to pay close attention to the rate of interest, loan repayment tenure, and maximum loan amount offered by each lender.
If you are planning to procure a personal loan despite a poor credit score, then it is better to choose Money View as they grant loans at an attractive ROI and do not levy any sorts of upfront costs. Moreover, they do not demand any kind of collateral securities as well.
Which are the best ways to enhance the CIBIL score?
- On-time payment: Prompt payment of EMI is one of the major factors that are responsible for enhancing the CIBIL score of an applicant. This is helpful in boosting the creditworthiness of an individual. You have to make sure that repayment of the loan and monthly dues are covered within a scheduled time. Do not forget to pay credit card bills before the final date as it helps in boosting credit score to avail extra features in the end.
- Put an end to the application of multiple loans: Submission of multiple loan applications at a single time badly affects the CIBIL score of an applicant. The reason is that quite a few applicants have a tendency to apply for multiple loans. Therefore, put an end to such kind of practice and consider only the ones that are most likely to get approved.
What is the maximum time taken to execute an eligibility check through Money View?
- Eligibility check would take approximately two minutes and the entire amount is credited to your bank account in 24 hours.
- The whole documentation process is carried out in digital format.
Individuals should always focus on establishing a good credit score by clearing off outstanding dues or EMI’s at the pre-defined time. An applicant must lay special emphasis on building a decent credit history and improving the credit score exceeding 750. But, if due to any reason, your credit score is not good and you are really in need of a personal loan, you can go with Money View, a reliable and trustworthy online lender.