PERSONAL LOAN

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What is a Personal Loan?

A Personal Loan is a loan that does not require collateral or security and is offered with minimal documentation. You can use the funds from this loan for any legitimate financial needs. Like any other loan, you must repay it according to the agreed terms with the banks. Personal loans are a form of installment credit. Unlike credit cards, a personal loan delivers a one-time payment of cash to borrowers. The borrowers pay back that amount plus interest in regular, monthly installments over the lifetime of the loan, known as its term.

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Features of Personal Loan

A personal Loan is a loan taken by the salaried individual to finance any personal expense like Wedding Expenses, Hone Renovation, Medical Expenses, Bill Payments, Dream Vacation Tours, Starting Aa Business, and Higher Education. In a Personal Loan, the borrower has full freedom to use the money for any purpose they want.

Collateral-free Loan
Minimum Document Required
Flexible Repayment Option
Lowest EMI
Maximum Loan Tenure
Door-Step Services

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Who can Apply for a Personal Loan?

Regular Income: if you are a freelancer, a business owner, a contractor, or anyone as such who does not receive a salary slip, you can easily get a personal loan by providing the lender an alternative proof of stable income.

Citizen of India: you need to be a residing citizen of India. You should be aged between 21 years and 67 years. You need to be employed with a private, public limited company, or an MNC.

Ideal CIBIL Score: the minimum CIBIL score for a personal loan is between 720 and 750. Having this score means you are creditworthy, and the lender will approve your personal loan application quickly. They may also offer you your chosen loan amount at a normal interest.

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What is CIBIL Score?

CIBIL Score is a three-digit numeric score, which gives the summary of your credit history. CIBIL Score is provided by the organization (TransUnion CIBIL Limited) who has all data of each individual, businesses, or organizations. Credit score range starts with 300-900. The closer your score is to 900, the better your credit rating is.

CIBIL Score mainly based on:

Repayment history - your payment history is a record of all your past and present payments made to your lender, which can affect your CIBIL score either in bad or good ways.

High credit utilization - Typically very high utilization, say more than 70/80% of your overall limit may negatively impact your credit score. Very high utilization may result in you missing the payments and hence, is always seen cautiously by lenders.

Multiple Enquiries - This means applying for multiple credit cards over a short period of time will lead to multiple hard inquiries and that could hurt your credit scores more than a single hard inquiry.

Credit Mix - credit mix is a comprehensive report of a consumer that shows which kind of credit you have and how successfully you have been maintaining them.
- Better cibil Score means cheaper loans and faster approvals
- Lower cibil score means delayed approvals/rejection of loans
- 750+ is a good score
- NA – no credit activity in last couple of years
- NH – no credit history i.e., either you knew to the credit system or you don’t have enough credit history

What credit score is needed for a personal loan?

Your CIBIL Score shows your creditworthiness and repayment ability. It is an important eligibility criterion, which is needed when you want to borrow an unsecured loan. This is because, in the absence of collateral, your credit or CIBIL score provides reassurance of timely repayment to the lender. The higher your credit score, the more likely a lender is to approve your loan application and offer you more favorable terms, such as a lower interest rate. While each individual has its own criteria, in general lenders view scores more than 670 as an indication that a borrower is creditworthy.

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Summary

The CIBIL Score works as a first as well as good impression for the lender, the higher the score, the better are your chances of the loan being reviewed and approved. A high credit score means that you will most likely qualify for the lowest interest rates and fees for new loans and lines of credit.
Our CIBIL Score ranges from 300 to 900. It is basically the probability of, what is our default probability.That if we take a loan or credit card, we make it’s payments on time or not. So 900 would be your maximum score and we considered above 750 as a good score on which we can get loan easily.Then the weightage of the credit score includes, the score of 30% in it depends on your past performance, whether you have made repayment of loan in the pastor have you did some default. Second is your credit mix and duration,what is your unsecured and secured loans?Leverage is your third point, that’s also 25%, leverage means what percentage of your total credit limit you use and there are some other factors which comprise about 20%.