CIBIL score for personal loan: What can an excellent score do for you?

In today’s digital arena, availing an instant personal loan online is often very useful to fulfil specific financial requirements, whether for home renovation costs, marriage expenses, medical exigencies, or personal aspirations like taking a trip. However, the journey towards securing an instant personal loan is not always smooth, especially if your credit score is not up to mark. Your CIBIL score for a personal loan is one of the essential parameters that is considered for your loan approval. 

Why is your CIBIL score crucial for a personal loan approval?
 

Firstly, lenders depend on your CIBIL score to evaluate your credibility. A minimum CIBIL score for a personal loan is 730, which signifies your disciplined credit behaviour, indicating that you are most likely to repay the borrowed proceeds by the due date. In contrast, a low CIBIL score of below 730 raises red flags, suggesting a higher default risk, and making lenders hesitant to approve your personal loan application.

While options like conventional personal loans for low CIBIL scores or instant personal loans for low CIBIL score applicants do exist, it is necessary to acknowledge that such loans typically come with elevated rates of interest and additional charges. Moreover, the terms offered might not align with your financial preferences but rather with the stipulations of the lender.

Secondly, your CIBIL score directly affects the rate of interest that you are offered by the lender. Having a good CIBIL score for a personal loan makes you eligible for a lower rate of interest, translating to considerable savings over the loan repayment tenure. Conversely, those with subpar scores might witness a higher rate of interest, enhancing the borrowing cost. An excellent score may positively impact the loan proceeds you are eligible for. Lenders are inclined to extend bigger loan proceeds to those with impeccable credit records, granting access to proceeds required for considerable expenditures. 

How can a good CIBIL score benefit you?
 

Here are some key benefits that you can enjoy by maintaining a decent CIBIL score:

• Higher chances of receiving loan approvals
  Customers with good credit scores display responsible credit behaviour, thus reducing the lender’s risk, which makes it easier for getting loan approvals.
• Quick disbursements for high loan amounts
  With a high credit score, you are also more likely to get approvals for higher loan amount limits. You can comfortably take care of your expenses with a high loan amount and repay your loan on time, further boosting your credit record.
• Easier access to favourable loan terms
  This is also a key benefit of maintaining a good credit record. With a sound score of 730 or more, you can ensure favourable loan terms such as a low personal loan interest rate and even flexible tenure options for repayment. 

Now, if you are looking for a personal loan with more flexibility, you can opt for IDFC FIRST Bank’s FIRSTmoney – a new-age smart personal loan – for which your credit score would be of vital importance. To be eligible for a FIRSTmoney loan, you would need to have a credit score of 730 or more and be earning a stable income. Read on to learn more about FIRSTmoney in detail.

Significance of IDFC FIRST Bank’s FIRSTmoney
 

Unlike in the case of conventional personal loans or instant loans, where you as a borrower are obligated to pay the interest constituent on the whole loan proceeds sanctioned irrespective of your utilisation, IDFC FIRST Bank’s FIRSTmoney functions just like an overdraft option. For instance, you are approved for a FIRSTmoney loan of Rs. 5 lakh, but you withdraw only Rs. 3 lakh. In this case, you will start paying EMIs only on the used amount i.e., Rs. 3 lakh and not on the entire sanctioned proceeds i.e., Rs. 5 lakh, resulting in considerable interest savings.

Moreover, a FIRSTmoney loan endows other distinct compelling features –

• FIRSTmoney loans offer sanctioned credit lines that can go up to Rs. 10 lakh for a period of 5 years, depending on your repayment history.
• You can take advantage of the withdrawal facility from your sanctioned limit with withdrawal amounts in multiples of Rs. 5000 up to your approved limit without any restrictions on the number of withdrawals.
• A 100% digital application procedure, simplifying the journey with minimal documentation and video KYC authentication. All you require is displaying your physical PAN card during the VKYC process.
• FIRSTmoney loans also offer a competitive rate of interest, making borrowing accessible and affordable.
• These loans also do not include any foreclosure fees, granting you the liberty to prepay the utilised proceeds at your convenience with no additional expenses.
• FIRSTmoney loans offer flexible repayment options, permitting you to choose from tenures ranging anywhere between 2 months and 60 months depending on your preference. 

During times of financial emergencies, taking a loan for dealing with expenses could become a necessity. With the features offered by FIRSTmoney, you can deal with your expenses and effectively handle finances much more efficiently as compared to applying for a standard personal loan. So, in case you do not have a great credit score (730 or higher), make sure to work towards boosting it so as to benefit from IDFC FIRST Bank’s smart loan offering! Both Salaried and Self-Employed Individuals can apply.

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.