Free Articles, Free Web Content, Reprint Articles
Sunday, September 19, 2021
 
Free Articles, Free Web Content, Reprint ArticlesRegisterAll CategoriesTop AuthorsSubmit Article (Article Submission)ContactSubscribe Free Articles, Free Web Content, Reprint Articles
 

CIBIL Score and Car Loan

Finding the right car is a tough job, and financing one is even harder, considering loans for cars are a good choice but not easy, either for the loanee or the lender. The loanee has to maintain certain criteria for the bank to consider them as a perceivable borrower. And in this determining process, a credit score plays a vital role. Credit scores are not just for the account holders and the borrowers but also for the lenders. Having a good credit score increases the loanee’s discount and choices and for a lender, it widens the business.

 

Credit Information Bureau (India) Limited (CIBIL) is a credit company keeping all the records of credit-related activities of individuals as companies, including credit card and loans. This so-called CIBIL score plays a major role in determining one's eligibility to avail a car loan. This series lies in the range of 300-900, a good score is 750+, and a poor is 650 below, a good score increases the chance of eligibility to avail a loan, and a poor score hinders it.

CIBIL report:

A consolidated report containing the customers' credit history, bank statements, loan information, personal information, employment information values and validates the consumer’s loan eligibility at great length.

Factors affecting CIBIL score:

The cibil score is generated by a complex algorithm that looks over the following criteria

Credit history: Credit history makes up 35% amounting to the individual’s timely payment of loans and debts. It has the complete knowledge of your Equated Monthly Installments, thereby making it necessary for one to pay on time.

Credit Mix: This shows a credit mix of secured and unsecured loans and is good if either or both types of loans are availed as they might increase your future possibilities.

Public Records: Apart from the personal information the report also looks over the public record of the customer if they have a criminal record or have bankrupted.

Credit Inquiries: Whenever a lender looks over the individual’s credit report the inquiry number keeps adding. So the more the number of credit inquiries, the more the number of loans taken. The potential lender may sign in green or red depending on the timely payments and the loan types.

Credit utilization: This amounts to 30% of the credit report which refers to the credit per cent you have used and the remaining percent you can use. The higher the percent, the higher the risk of borrowing. Good credit utilization should be below 50%.

New credit: Every time you take a loan the new credit adds up, meaning taking multiple loans at a time isn’t very good and hinders future chances of taking a loan.

CIBIL score and car loan:

CIBIL scores determine the individual’s loan eligibility widely. A car loan is no different from that, the more the credit score, the higher the eligibility.

Loan Approval: The loan approval for an applicant depends heavily on the credit score, you have a high score, your process is faster and hassle-free. If not getting to sanction your car loan is much harder and in some cases not possible.

Tenure: Sometimes the applicants want the longest time of period to pay their principal and interest and the tenure time is affected by the credit score at great length. If your score is less or poor the chances of getting the tenure you want is low.

Rate of Interest: The interest rate is a part of the total amount calculated in percentage that the loanee needs to pay every month for the loan amount. The credit score affects this, for a lofty CIBIL score the interest rate is less (scores like 800), whereas though few banks might approve for loans there is a giant chance that the bank increases your interest rate for each monthFree Reprint Articles, thereby making you pay more than what is necessary.

 

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR


Gaurav S. Khurana is the Founder and CEO of Dialabank and has had a great career in the Banking and Financial Services Sector. He has an experience of 18 years in the sector and has worked at Senior Roles including National Sales Head at ING Investment Management India and as the Vice President Citibank. A post-graduate from IMT, Ghaziabad. Gaurav started his career as a Named Account Manager in Xerox.

Being a part of this field for a long time now, he has written many informative articles and blogs benefiting and assisting many in making decisions regarding the policies provided by various banks and non-banking financial companies such as the Axis Bank Car Loan policy.



Health
Business
Finance
Travel
Technology
Home Repair
Computers
Marketing
Autos
Education
Entertainment
Family
Law
Other
Communication
ECommerce
Sports
Home Business
Internet
Self Help
Partners


Page loaded in 0.031 seconds