If you’re looking for an unsecured loan with the least loan application formalities to obtain quick access to funds, then a personal loan is the best option. A higher credit score is crucial to get personal loan approval, and you need to avail of a personal loan to improve your credit score. However, if you manage it properly, you can get them at reasonable interest rates and improve your credit score.
Usually, we see that a good CIBIL score helps get an easy personal loan. You should keep in mind that only an excellent CIBIL score for a personal loan is not the criteria for lenders. You can find many lenders who will grant you personal loans even when you have a Cibil score lower than 450. However, you have to fulfil their other essential criteria.
Let us explore the five ways personal loans help in boosting your CIBIL score.
- Fewer loan applications
Having multiple loan applications is not a good idea to avail of an easy personal loan. Doing so will make you look desperate for credit. First, you need to check your CIBIL score for a personal loan to evaluate your chances of success. You should also consider your repayment capacity to pay back the monthly instalments before applying for the loan. It will help you improve your CIBIL score! Aside from this, you should look up the eligibility criteria of your shortlisted loan providers beforehand. It will remove any confusion from the beginning, saving you time and preventing your credit score from a dip.
- Pay attention to the rate of interest and processing charges
For this, you can choose a reliable Financial Services company, offering reduced processing charges and flexible repayment duration. Look for one which offers at least 12 to 16 months for repayment. It will further enable you to repay your loan amount on time, enhancing your payment track records on your CIBIL report.
- Evaluate your repayment capacity
Although you can get easy personal loans with high sums, stick to the amount, you can payback. Be extra careful while applying for the loan amount. You should always take loans for specific requirements like resolving debt or tackling a financial urgency. Avoid taking out loans for an impulse purchase. Go through available loans for different purposes and apply as per your requirement. Taking care of these factors will prevent any delays in repayment. Further, it will boost your CIBIL score for a personal loan.
- Avoid any default behaviour
Undisciplined behaviour regarding your EMI payments will negatively affect your CIBIL score. Unsecured Personal loans come with high risk causing lenders to become additionally careful while providing such loans. They also carry out multiple financial health checks on your accounts. So if you take a personal loan, make sure to clear out your delayed records debts. Maintaining disciplined repayment behaviour will automatically boost your CIBIL score.
- Do not take multiple loans
When you regularly pay back your monthly instalments, your CIBIL score increases. While it’s a good thing, it also puts you in the sight of financial firms that offer multiple debt instruments. It can trap you into paying multiple monthly instalments, which will affect your daily expenses. This type of instalment becomes challenging to repay and causes delays and defaults. Due to this, financial firms also impose penalties on you. Therefore, you need to prioritise your financial capacity requirements while opting for multiple loans. Being considerate in this area will help you to secure loans in the future.
Having a good CIBIL score for a personal loan comes in handy during financial emergencies. However, paying your debts and following well-planned procedures for delivering personal loans can also boost your CIBIL score. Follow the methods mentioned above to make the most of your loans to raise your CIBIL score.
Moreover, you can contact EarlySalary, a platform that will assist you in availing of unsecured personal loans. To take advantage of their offers, you will need to download the EarlySalary app. Next, you have to provide essential information and browse loan offers suitable for you. This platform also offers personalised services to their customers, making the environment more convenient. So, if you want to avail of unsecured personal loans, make sure to check out the platform.