Small and Medium Enterprises (SMEs) are rapidly growing in number. Over the past few years, the number of SMEs in the country has risen to an all-time high, which necessitates the need for quick and easy business loans as a majority of these SMEs suffer from a shortage of funding.
Although the eligibility criteria to obtain a loan stays the same across all states, the high demand for funds in Bangalore ensures that an SME can successfully obtain funds at a more lucrative interest rate. These loans are sanctioned by the Indian government and are provided collateral-free (only for MSMEs). It is extremely simple for a business to apply for an instant personal loan online as well.
Achieving or maintaining good credit scores is an important aspect before applying for loans as most banks check the consumer's CIBIL score and report before approving a loan.
If you are credit-vigilant, you will surely know that checking your CIBIL score and report before applying for a loan or credit is an important step. A good credit score is after all an integral part of your financial health.
Before applying for personal loans you must know some key things about CIBIL Score and how they impact your credit-worthiness because a bad CIBIL score may actually ruin your chances of getting an instant personal loan.
What is a CIBIL score?
The Credit Information Bureau Limited or CIBIL issues you a three-digit number that is being calculated on the basis of your previous credit behaviour. CIBIL scores measure your creditworthiness and range between the lower range of 300 and upper range of 900. The closer you are to the upper range, the better are your chances of getting loan approval.
What is the minimum CIBIL score for personal loan?
Usually, you can avail a personal loan if you have a CIBIL score of 750. Points below this may subject you to loan rejection or a loan approval with higher interest rate.
What are the Key factors that determine your CIBIL score?
The CIBIL score evaluates your past debt performance. It accesses the kinds of loans availed by you. It sees your Credit exposure.
How to check your CIBIL score?
You can check your CIBIL report online. Several financial holdings offering you personal loans also have this facility.
Some other factors also need to be kept in mind, which will directly or indirectly affect the time a financial institution takes to process the loan. A financial institution always calculates the creditworthiness of an entity before processing the loan. These factors which affect the eligibility of an entity include CIBIL score, past record of tax and EMI payments, credit utilization ratio, etc. Higher the CIBIL score of an entity, greater are the chances that the entity will be eligible for a higher loan amount. The personal loan interest rate also depends on these factors. In addition to this, if the track record of the entity with respect to past payments is good, there is a good chance to obtain a higher loan amount.