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Instant Personal Loan: Bank or NBFC gives you loan on the basis of your credit score. If your credit score is good, you can easily get a loan even without a guarantor. Many times loan is available even at low interest rates. The interest on loan usually depends on your credit score.
What is credit score?
Credit score is a 3-digit number which, along with your behavior, also shows how responsibly you have paid the previous loan. The higher your credit score, the greater are your chances of getting a loan.
Credit score ranges between 300 to 900, but a score of 750 or above is considered the best. If your credit score is less than 650, the bank considers you as a risky customer. The bank feels that you will not be able to repay the loan on time. To increase credit score or CIBIL score, it is important to pay the dues on time.
Loan against 500 credit score
If your credit score is 500, it shows that you have not paid your previous loan on time. Besides, you may have also committed many defaults. It also shows your financial ability is low, due to which the bank or NBFC feels that there may be difficulty in recovering the loan amount from you. However, this does not mean that you will not be able to get an instant personal loan with a CIBIL score of 500.
You will get many offers on loans, but the interest rates on these will be higher than required. In some cases you will also need a guarantor. In such a situation, the chances of getting a loan on one’s own terms with a credit score of 500 are negligible. It is important to improve your credit score before applying for a loan. For this, pay the outstanding bills as soon as possible.
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