Personal loans can be accessed very easily. It is said that these loans are for everyone and everything. The banks and non-banking financial companies have a straightforward process, and a very basic eligibility criteria that a person who wants to gets a personal loan has to be a minimum of 21 years of age with a stable source of income. There are several factors considered by the lender before granting a personal loan. Some factors are:
1. Credit report,
2. Income source,
3. Employment history, and
4. Repayment history.
These factors can differ for lenders. Any lender who provides the facility of personal loan will take a look into the credit history of the applicants. The credit report has the details of the credit taken before, repayment pattern, the amount of credit outstanding past due dates, and the credit score. The credit report of an individual is prepared and maintained by an external agency. Credit Information Bureau India Ltd. is one of the third party that looks after the reports. This is why the credit score is also popularly known as the CIBIL score. Every single financial decision or action taken by an individual is reflected in the credit report.
The credit score is the summarized numerical presentation of the creditworthiness of an applicant. It is a three-digit number with a range of 300 to 900. The preferable score is 750 and above. The credit score requirement of SBI personal loan is a minimum of 650 and above. The personal loan interest rate of SBI personal loan policy is a rate starting from 10.50% per annum.
The credit history and the creditworthiness is a crucial factor that convinces the lender to grant the personal loan. The loan amount and the personal loan interest rate depends on the credit score of the applicant. A person with a good credit score will get a better deal i.e. larger loan amount and low personal loan interest rate. Good credit implies that a person hasn’t made any delays or defaults in the past. With a bad or a low credit score, it is difficult to get a loan but not impossible. To have a pleasant impression on the lenders it is necessary to have a good score.
Having a good credit report is always beneficial for a personal loan applicant. Maintaining a good credit history is also equally important.
Comments