A Personal Loan is an unsecured loan that requires no collateral. The lender gives the loan with the intention of getting the money back with interest. So, the borrower’s credit score and income stability become key factors here. If you are looking to take a Personal Loan, it would be helpful to check your eligibility. See if your credit score and income are good enough for you to get the loan.

Credit score and Personal Loan

When you apply for a Personal Loan, the first thing that the lender looks at is your CIBIL score. The CIBIL score is also known as your credit score. It is a reflection of your financial discipline. A high credit score results from the timely repayment of loans, credit card bills, and other debts. A good credit score brings many benefits when you opt for a Personal Loan. Some of them are:

  • Quick availability: A high credit score often translates to instant approval. You will not have to wait for any confirmation or verification.
  • Better interest rate: Poor credit scores may lead to difficulties in loan approval. People with poor credit scores may also end up with a high rate of interest. A poor credit history hints at the borrower’s probability of defaulting. So, the lender charges a high interest rate to minimise the risk. With a high credit score, you can expect a much lower rate of interest.

Read Blog : Tips to Improve Your Credit Score

If you are not sure about your credit score, you can log on to the CIBIL website and check your score. It is a good idea to know your credit score beforehand. This would help you to negotiate the interest rate better with your Personal Loan provider.

Income Stability and Personal Loan

A Personal Loan is given on the basis of trust. But lenders are intelligent. They back up the trust factor with some solid figures. As a result, they scrutinise the borrower’s income to see whether he or she can afford the Personal Loan. A Personal Loan is expensive. It carries a high interest component that increases the EMIs. Sound finances and a stable income are important. This implies you have the resources to pay off the EMIs. This is why income is a key factor in loan approval.

How to Apply for a Personal Loan

You need a certain level of income and a high CIBIL score to get a Personal Loan. If these pose no problems, you can submit your application right away. A Personal Loan is commonly an online loan. From the application to the approval process, everything can happen online. Simply log on to the Bajaj Finserv website today.

The bottom line

Credit history and income stability are key factors for a Personal Loan. If you have a good CIBIL score and your income is stable, you can apply for a Personal Loan without any problems. You can use an EMI calculator to get an idea of how much the loan will cost you. Always negotiate the interest rate with your lender if you have a good credit score.

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