Need credits to buy your dream car? Get a car loan!
Do you need to get a bigger house? House loans can definitely help you!
Are you moving to a foreign country for higher education? Education loans can help you get funds and accomplish your dreams.
But what if you need a loan for your wedding or for going on a holiday trip to the Maldives or buying your favourite electronic gadget? That’s where personal loans can help you. Do a CIBIL score login and then a CIBIL score check to know your credit score, which is a big factor determining your eligibility for a personal loan.
What Is A Personal Loan?
A personal loan is a loan that you can use for multiple purposes. A personal loan is simpler to avail because no collateral is required, and there are very few limitations on how you can use the funds. The best part about taking a personal loan is that there can be multiple reasons for which you can avail of a personal loan.
However, you must know your credit score before applying for a personal loan. You can do so via a CIBIL score check.
Personal Loans: How Are They Different?
There are significant differences between personal loans and other kinds of loans that include –
- Interest rates in personal loans: Interest rates for personal loans can vary depending on factors like tenure, income, occupation, and credit history. Interest rates of personal loans are not floating; they are fixed. These rates are generally high in the case of personal loans.
- Unsecured loans: Since no security is required, personal loans are considered unsecured. A home becomes the security for a home loan, and your car is the security for your car loan. But there is no security for your personal loans. It is one of the reasons for the high-interest rates of personal loans.
- Tenure and repayment terms: The repayment terms of a personal loan are more or less similar to other loans. But the tenure of a personal loan is different from other loans. Personal loans are generally shorter because they are taken for a short-term purpose.
What Is A Good CIBIL Score For A Personal Loan?
Having a good credit score helps to avail of all kinds of loans, but it is highly significant in the case of personal loans. Due to personal loans being comparatively riskier than other standard loans like car loans, home loans, and education loans, having a good credit score is crucial for availing of a personal loan. These loans also require minimum documents when compared to other loans.
You can do a check on you Credit by CIBIL Score Login on various websites to know your credit score. For a personal loan, it is best to have a credit score above 750. You are almost guaranteed a personal loan if your credit score is above 825, but there are also other factors to consider. The minimum credit score required to get a personal loan is between 720-750.
Getting the desired loan is difficult if your credit score lies in this range, but you can still manage to get one if you fulfil other vital factors. It is always recommended to maintain a credit score above the given range for faster and easier approval of your personal loans.
Thus, a personal loan significantly gives the freedom with the offered credit since you can use it for any purpose you want. However, it also becomes crucial that you maintain a healthy credit score to avail of the desired credit of a personal loan.