Planning a loan? Know this first!
When planning a loan, it’s crucial to understand your credit score, income, job stability, existing debts, and loan options. Knowing these factors helps you determine loan eligibility, interest rates, and repayment terms. By assessing your financial situation and loan requirements, you can make informed decisions, choose the right loan, and manage repayments effectively, ensuring a stress-free borrowing experience.
What is a credit score
Your credit score is a 3-digit number showing how trustworthy you are with credit.
It ranges from 300 to 900.
Higher score=Better loan terms
What's a good credit score?
750-900: Excellent- Fast approval, lowest interest
700-749: Good- Eligible for most loans
600-699: Fair- May get approval with higher rates
Below 600: Poor- Difficult to get approved
How it impacts EMI
Your credit score directly impacts your EMI amount. Higher interest rate= Lower EMI
Example(Rs. 5 lakh, 5 years)
Score 800-EMI Rs. 9,500
Score 650-EMI Rs. 10,500
you could save Rs. 60,000+ over the loan term!
How to improve your score
- Pay bills and EMI on time
- Keep credit usage below 30%
- Don't apply for too many loans at once
- Monitor your credit report regularly
- Avoid loan defaults or settlements
How to check credit score online?
To check your credit score online, visit the website of credit bureaus like CIBIL, Experian, Equifax, or CRIF High Mark. Create an account, provide required details, and pay fee. You can also use online platforms like paytm, Freecharge etc. Simply log in, verify your identity, and view your score.
Other loan factors
When applying for a loan, lenders consider factors like income, job stability, existing debts, and loan amount. However, a good credit score gives you a significant advantage. Knowing your score beforehand, comparing loan offers, and planning EMIs within your budget enables smart borrowing and stress-free repayment.
