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CIBIL stands for Credit Information Bureau Limited. It is a database that holds the complete data of the borrower to the bank. The phenomenon completes its circle when a borrow applies for a bank loan, the bank first checks out his/her credit history by getting a Credit Information report which is generated by CIBIL. After going through the report, the bank then decides whether to grant loan to the certain borrower or not. CIBIL in a way helps banks contain bad loans.
Lenders measure your ability to repay a loan by checking your credit score. It summarises your credit history, the amount of credit you have taken, how you have repaid it, and other factors. All this helps a lender determine if granting you a personal loan is a risky proposition or not, since a personal loan is an unsecured loan and the lender has no other assets to fall back on. While you may have heard that you cannot get a personal loan with a bad CIBIL score, this isn’t entirely true. You can still get a personal loan despite a poor CIBIL score. Here are the measures that you should implement to do so.
You can avail a Credit Information Report from CIBIL and verify whether your name figures on the CIBIL defaulters list. After an initial request to the bank, you get your credit information report while the bank furthers the request to CIBIL. Once this is done, you will be sent a code containing a 9-digit control number. Now, you need to send a demand draft worth INR 142 to CIBIL along with your control number that you received from the respective bank. During the complete procedure, you will be gathering documents that need to be processed. The required documents are:
Here, we’ll tell you how your loan application will be approved, while you still have a bad CIBIL score. Follow these tips that may help you get a personal loan irrespective of your CIBIL score.
What is the connection between Personal Loan and CIBIL score?
Basic CIBIL requirement for a personal loan is at 750. A score beneath 750 means the applicant is not creditworthy and the application will not get processed most likely. Generally, credit scores have a range of 300 to 900. 300 is the base end of the range, while 900 is the upper end.
What is the connection between a bad CIBIL score and high interest on loan?
There are some cases where banks and financial institutes will give personal loan credits to CIBIL defaulters. However, this happens at a high interest rate. Banking firms will offer personal loans to individuals even while they are CIBIL defaulters, at a much higher interest rate.