What should be the credit score for applying for a personal loan online or offline
A person may require a loan at any time in life. Urgencies of several types compel a person to seek a personal loan, either from a bank or other financial institution. You also might have come across advertisements that highlight the personal loan online apply process.
Apart from all other requirements that personal loan online apply applicants need to meet, the key requirement is of a good credit score particularly the CIBIL score also needs to be met.
Whenever anyone https://www.sc.com/in/loans/personal-loans/, it has to be foremost ensured that the applicant has to maintain a good credit score or CIBIL score. This is applicable in both cases i.e personal loan online apply a medium or even if the loan is being applied by the offline mode.
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What should be the ideal credit score?
In normal circumstances, the applicant should ideally have a credit score of 750 or above if he wishes to qualify for a personal loan. This is equally relevant in case of a personal loan online apply process is being sought. A credit score is a three-digit number (between 300-900) that provides an insight into the financial health of a person, seeking a personal loan. Higher the score a person has, the better are the chances of the loan being approved.
Lenders in all cases approve personal loans for seekers who have a credit score of a minimum of 750.
Role of Credit score in personal loan processing
CIBIL is an agency that has been authorized to collect, manage and maintain credit records in any activity that relates to a bank, credit card companies, and other lender parties. The lenders which might be a bank or credit card agency provide reports on a monthly basis to CIBIL for all the transactions. This information includes all the EMI related reports and credit card payments as well. This also includes details of due and late payments of credit cards, any outstanding balance and any other details which might be relevant to the credit profile of the person who is seeking the loan.
A mathematical formula is thereafter used to calculate the credit score of the person. The score reflects the credit behavior of the person and gives the lending agency insight on his financial status and spending habits. People who have a good track record and have been making all the payments on time often get a good credit score. This makes the work of lending agencies easier as they can rely on the financial strength of the person. Issuing personal loans, both online and offline mode thus becomes easier for the lending agencies.
Any default in payments made leads to the credit score falling down and the person will naturally have difficulty in getting the loan approved.
Appropriate credit score
Though it is always recommended that credit score should be above 750 for quick approval of the loan, those with a credit or CIBIL score in the range of 600-749 can also get a loan approved by some lenders. In such cases, the approval of the loan is at the discretion of the lender and it will look at the stability of the job of the borrower, monthly salary and the extent of liabilities. If the lender finds that the person will be able to repay the loan installments at a specified time, they will not have much hesitation in approving the loan.
In cases when the credit score is less than 600, the chances of the loan being approved are virtually nil. Thus, in a nutshell, it is always advised that the credit score should be maintained at an optimal level of 750 for easy and hassle-free loan approval.