Does your credit score affect Personal Loan interest rates?

Why do credit scores matter so much to get loan applications approved? When you opt for a loan, the bank shares your credit profile with credit unions such as CIBIL, which then tracks your repayment records and evaluates you on how effectively your loans have been managed. These ratings give the bank an idea of your borrowing capacities. Depending on your credit score, the bank sets your loan amount eligibility and the loan’s interest rate.

Now, with a good credit score, you can get preferential loan terms to increase the loan’s affordability. For instance, IDFC FIRST Bank offers FIRSTmoney, a smart Personal Loan through which you can get a sanctioned credit line if you have a credit score of 730 or more. This blog provides a detailed understanding on the importance of credit scores and more about FIRSTmoney loans in detail. 

What is a good credit score, and why is it important?

Your credit score is a measure of your creditworthiness as a customer. In other words, your credit score reflects your capability to assume debt. This score falls within the range of 300 and 900. Lenders generally consider a credit score between 730 and 900 as ideal and are most likely to approve loan applications with good credit scores without any delays. In addition to this benefit, a good credit score helps you negotiate with the lender while availing a personal loan. 

Why choose FIRSTmoney if you have a high credit score?

A FIRSTmoney credit line keeps your dynamic financial needs on top. Take a look at why you should opt for a FIRSTmoney loan if you have an exceptionally good credit score:

Multiple withdrawals from your sanctioned limit

FIRSTmoney offers you the flexibility of unlimited fund withdrawals. You can make multiple withdrawals up to the approved limit which can go up to ₹10 lakhs without any restrictions in multiples of ₹5000, allowing you to meet your financial needs whenever required. 

Instant approval & quick disbursal process

You can apply for a FIRSTmoney smart Personal Loan through a completely digital application process. The approval and disbursal processes are quick and once your documents are successfully verified, you can get your FIRSTmoney credit line sanctioned. Once this is done, you can immediately start withdrawing funds for all your spending needs.

ZERO foreclosure charges

FIRSTmoney also has a zero foreclosure charge policy in place, which means you can utilise the funds as needed and foreclose the loan in full without incurring any additional charges. 

One-time setup of the sanction limit with no maintenance charges

Once you have applied for your FIRSTmoney loan, you will get a sanctioned limit for your credit line based on your creditworthiness. There are no maintenance charges that you would have to incur on your sanctioned credit line. 

How to apply for FIRSTmoney smart loan?

To apply for a FIRSTmoney smart loan, follow these 5 simple steps - 

• Start by scanning the QR code or clicking loan from your smartphone.
• Register using your mobile number and confirm basic/personal details to check your eligibility.
• Select the loan amount of your choice starting from as little as ₹5,000 up to your full credit limit and choose flexible repayment terms.
• Link your bank account where you wish the funds to be disbursed.
• Complete the video KYC verification process with your physical PAN card.

After you get approved of your credit limit, start using the funds right away as per your needs and withdraw funds in parts or at once.

Making the smart choice

Your credit score is an important factor that the bank considers while evaluating your Personal Loan application. If you are salaried and self employed indivisuals with a good credit score (730 or more) earning a stable income, you can apply for a FIRSTmoney smart Personal Loan that is designed to offer you flexibility to access funds anytime whenever needed. It is a favourable loan option since you have to pay EMIs only on the consumed funds instead of the entire sanctioned limit, which can prove to be quite cost-effective.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.