Personal loans being unsecured, which makes them more risky for banks, a good CIBIL score is main requirement
A CIBIL score is a number assigned to each person representing their creditworthiness and the number plays a major role in availing a Personal Loan Instant Approval.Depending upon the score, banks consider whether the person is loan worthy and the amount be approved.
TransUnion CIBIL Limited, a credit information company, receives information from banks and other financial institutions about the financial behaviour of their customers and aggregates information to produce a score or number which indicate customers’ creditworthiness.
What CIBIL score is required for a Personal Loan Approval?
According to Banks Norms, the minimum CIBIL score for a personal loan is 750. Anything above this would mean that the applicant is creditworthy and applications are processed without hassle.
In general, credit scores range from 300 to 900; 300 being on the lower end of the range and 900 on the higher end.Online Personal loans being unsecured, which makes them more risky for banks, a good CIBIL score is main requirement . A good credit score indicates that the borrower is responsible when it comes to repaying their loans and credit cards.
There are many factors that affect credit scores, either positively or negatively.
Factors that affect credit score positively are:
- Making timely payments towards credit cards.
- Paying loan EMI’s on time.
- Paying not just the minimum due but the entire outstanding balance.
- Factors that affect credit scores negatively are:
- Non-payment or late payment of credit card bills and loan EMIs
- Maxing out credit cards or consistently using more than 75% of the credit limit.
- Paying only the minimum due on credit cards; the remainder is still considered overdue.
- Possessing too many lines of credit especially unsecured forms.