13-Dec-2017 written by : FSI-Team
India is an emerging country and is on its way to becoming a super power. Indians are emerging in terms of standard of living, what once used to be luxury can be availed by ease these days. For example, buying a car almost a decade ago used to be considered as a luxury, but today you can buy a car with ease even if you have a small amount of money with you with the help of car loans.
There are various types of loans which are available in the market which can help you with different requirements. If you are considering buying a house, you have home loans, if you are considering buying a car you have car loans, even if you are considering buying a mobile phone worth 15,000 rupees, you have consumer loans at your disposal.
But how will you get a loan? What is the procedure? What is the main factor which can influence your chance of getting a lesser personal loan interest rate?
The main criteria which influence your chances of getting any type of loan is your credit report. A credit report helps a lender determine if you are loan worthy. There are cibil score ranges which are used to categorize your financial status.
There are a lot of Indians who do not believe in taking a loan for any transaction. They consider making transactions with their existing money and try not to get into the credit world. Because of such reason they do not check their score, or for some people the credit score doesn't exist. What they fail to understand is by having a good credit score you can apply for a loan at any given point, a loan can help you in desperate situations like a medical emergency where you need a lot of money. So it is suggested to check on your cibil score at regular intervals, as it is easy to get one online these days. If you do not have a cibil score do make sure to take a small secured loan to get started.
As mentioned earlier, there are ranges of credit score which helps the lender determine where you stand as per credit worthiness. If your credit score is not good enough, you can work your way to a better score, which will help you in future.
Consider yourself as a non defaulter, you make all your payments on time and there is no scope of your credit score being low. You like the latest phone which is available in the market and you are considering getting yourself one, but when you apply for a consumer durable loan, your loan is denied because of a low cibil score. This can happen because of credit bureau’s mistake while making entries. If you mind such thing happening, you can raise a dispute against the bureau to rectify it.
If you are planning to take a planned loan, you should always check your credit score first. By doing this you will have the upper hand in bank terms negotiation. For instance, if your credit score is excellent, you can negotiate with the bank in terms of interest rates and processing fees which will help you in the long loan run.
There are many instances where your identity can be used for the loan process. This will hamper your cibil score and in some cases, the bank will catch hold of you to make the repayments. If you are a victim of identity theft, you should immediately report it to the bureau and file a legal complaint about the same.
Do not check your credit score more frequently, as a lot of inquiries can lower your score. Check the score once in a year. But do check them atleast one a year as you can apply for one free cibil score report in one year.
An emergency can knock your door at any given point, it's best to be shielded financially to avoid chaos in emergency situations.