How high CIBIL score can help you get cheaper loans; Check details

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Even though the RBI’s MPC raises the key repo rate to control inflation in the country, lending to borrowers is also becoming more expensive. Many banks have raised interest rates on loans under the country’s tight monetary policy regime. However, there is a way for borrowers to get relatively cheaper loans – a good CIBIL score.

The CIBIL score is an individual’s credit score. It rates a person’s credit discipline between 300 and 900. The higher the score, the better. Generally, a score above 750 is considered good where the chances of loan approval become higher. The score gives an overall indication of the individual’s creditworthiness and track record. In addition, the CIBIL report (which contains the CIBIL score) reveals whether the person has ever defaulted on a repayment in the past.

Apart from easy loan approval, CIBIL score also helps borrowers get cheaper loans. For example, on home loans, the State Bank of India (SBI) offers lending rates based on the credit score of the borrower. It offers a regular home loan at 8.05% for those with a CIBIL score above 800, 8.15% for those with a score of 750-799, 8.25% for those with a CIBIL score of 700-749. Those with a CIBIL score of 650-699 can get the home loan at 8.35%, and those with a score of 550-649 can get it at 8.55%.

There are different ways to get approved for a loan, including having a stable job, earning a viable income, credit history, your relationship with the bank and most importantly – the CIBIL score, which will help you get a loan easily and effortlessly, according to microlending platform SmartCoin CEO and co-founder Rohit Garg.

According to a TransUnion CIBIL report, approximately 79% of loans are made to people with a CIBIL score of 750 and above. Having a higher CIBIL score not only makes the applicant easily obtain loans but also gets the loan at relatively lower interest rate.

How to check CIBIL score online?

CIBIL provides one report per year free of charge. This can be checked online. Here are the steps by which you can check the CIBIL score:

1) Go to the official CIBIL website https://www.cibil.com/

2) Select “Get your CIBIL score”

3) Click on ‘Click here’ to get your free annual CIBIL score

4) Type your name, email address and password. Attach ID (passport number, PAN card, Aadhaar or voter card). Then enter your PIN code, your date of birth, as well as your telephone number

5) Click on ‘accept and continue’

6) You will get a one-time password (OTP) on your registered mobile number. Type the OTP and select “Continue”

7) Select “Go to Dashboard” and check your credit score

8) You will be redirected to myscore.cibil.com

9) Click on “member login” and once logged in, you will be able to see your CIBIL score.

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