Your creditworthiness is totally assessed with a CIBIL score. It is considered to be the primary factor In the successful application of a personal loan, home loan, or another credit line. Since a personal loan is unsecured, there needs to be appropriate yardsticks for loan approvals. An instant personal loan being versatile can be used planning a vacation, pay off medical bills, do away with wedding expenses, handle day-to-day expenses, etc.
Plus, it’s a collateral-free loan so there’s no worry about pledging valuables. However, lenders are always interested in checking up whether your credit standing is worthwhile or not to ensure the borrowed sum is paid back.
Essentially, apart from the general eligibility, you will be required to have a good CIBIL score as well. This is important for your personal loan approval.
What CIBIL score is required for an instant personal loan?
Typically, a credit score falls within a range of 300 to 900. Any score closer to 900 or below works well to get an instant personal loan. It potentially helps to get better deals and credit cards. A CIBIL score of 700- 750 is considered ideal for major lenders. You can also get a personal loan with a CIBIL score above 750 or more. You can very conveniently get your loan approved if your credit score is above 750.
This provides extra cushion to lenders that their money will be repaid well in time. An assurance can work in favor of quick approval & transfer of cash money. A credit score helps to reduce your overall default risk. This way your credit paying capacity is judged and taken into further consideration for later.
3 important things to do before applying for a loan:
Check your CIBIL score:
It is good to know your credit standing before thinking of a personal loan. You should check your CIBIL score regularly to know where you actually are & how much can be improved. With a low credit score, it will be difficult to get an instant loan & eventually take corrective measures.
Get your Free CIBIL report:
Simply visit the official website of CIBIL & apply for a Free CIBIL report. The RBI (Reserve Bank of India) has already declared how credit bureaus must share free credit reports in a year.
Scan potential lenders:
Whenever you’re sure of taking a personal loan, next would be to look for potential lenders offering good deals. It is best to look at shortlist lenders who fulfill your expectations. Since personal loans can have a slightly high rate of interest, so it’s better to have a thorough check-up.
Apply with selective lenders:
After shortlisting your lenders, you can decide your loan suitability & needs along with pros & cons. Only a few lenders can be kept in mind for future applications. Mainly avoid multiple inquiries/ applications. This potentially hits your credit score negatively. Several hard inquiries take a toll on your CIBIL score for a good personal loan.
Read More: 6 Simple ways to increase your credit score
If you don’t have a credit history at all, then there are multiple ways to fix it asap. You can apply for a secure credit card which is maybe issued against a fixed deposit. It can be used as a typical credit card and paid back when necessary. Paying all bills on time has a great impact on your current credit score. Though, a credit score alone doesn’t determine your loan eligibility. Taking as a simple tip, pay up responsibly with your money and handle your credit cards and loans timely.