4 Ways Your Credit Score Helps You Get a Low Interest Loan
Credit, in its various forms, can be a very useful tool when used wisely. It can help you achieve your goals and bridge financial gaps, sometimes even profitably. But, to qualify for the credit, you must meet the prerequisites set by the issuers. Among these criteria is your CIBIL score, which is normally between 300 and 900. In general, lenders will require you to achieve a minimum score to qualify for a loan and failure can be an issue. For example, you can get a personal loan with a low CIBIL score, but you may not get favorable terms.
Indeed, your credit score is a direct indicator of your financial well-being. As such, having a good or excellent score is important because lenders also use it to assess your creditworthiness. If you have a low score, you are at a higher risk of lending and some lenders may even reject your applications. On the other hand, an adequate credit rating has several benefits, one of which is that it helps you qualify for and qualify for low interest loan deals.
To learn how your credit score helps you get an affordable loan, check out the following tips.
Simplifies access to credit
Every time you apply for a loan, lenders will check your credit score and your credit report. This is usually the first part of the screening process and having a strong credit profile will make things much easier. Ideally, you should have a CIBIL score of at least 750 with no previous defaults on your credit report. By meeting these two conditions, it is fairly easy to access most forms of credit as you will be considered a creditworthy applicant. In some cases, you can even take advantage of immediate loan approval. Lenders offer such benefits to truly deserving applicants, especially those with excellent credit ratings.
Improves chances of accessing exclusive offers
Modern lenders will have exclusive personal loan offers reserved for the most creditworthy applicants. These loans generally have lower rates and are much more profitable. Additionally, some lenders also offer pre-approved offers. These are personalized loans designed to match your profile and offered according to your credit profile and financial situation. So, if you have a high credit score, your chances of getting such offers are much higher. Although rare, special loan offers like these from the right lender can help you secure a loan at the most affordable rates.
Improves your bargaining power with lenders
Although some lenders may give you an offer based on your credit score, you can negotiate better terms. Depending on your profile and the lender, you can obtain the loan at a lower and more affordable interest rate or even obtain a waiver of certain administrative costs. It can save you a lot of money, but it’s a benefit that only some candidates appreciate. You need an excellent credit score, which is 750 or above, to negotiate such a deal. Lenders are less likely to offer you such an offer if you have a low score.
Provides access to loans with higher limits
In addition to facilitating access to affordable loans, your credit score can also determine the total penalty you can qualify for. Although personal loans come with a maximum penalty, you may not always qualify for the full amount. This may be because your financial or credit profile may be lacking in certain respects. However, you may qualify for a bigger penalty with an excellent credit score because you have a lower risk of default. So, if you need a personal loan for a major expense, be sure to build up your credit score so you don’t run into any trouble getting the sanction you need.
Your credit score is an essential facet of your financial profile and is one of the key factors evaluated by lenders. Given its importance, you should be aware of the benefits of your CIBIL score, how to check it, and ways to maintain it. This will help you both in the short and long term, as your credit score also comes under scrutiny in other financial dealings. For example, your credit score will determine your eligibility for a home loan. Plus, he can help you with visa applications for countries like the UK or the US.
So be sure to do everything you can to maintain a good CIBIL score so you never miss out on credit offers that can save you money. To monitor your credit history and easily access your credit report, check your CIBIL score on Bajaj Finserv for free. This simple and quick process can be completed in just 3 steps and has no negative impact on your CIBIL score.
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Posted on: Thursday, February 10, 2022 at 8:29 PM IST