Can I get a wedding loan with a bad CIBIL score

A wedding is a memorable event in everyone’s life. We want to make it even more special. And to do that, a lot of planning is needed, especially financial planning. These days, many individuals opt for a personal loan or a wedding loan to manage their wedding expenses and reduce their financial burden. A personal loan comes with a flexible term, which allows them to repay the loan amount at their convenience.

Financial institutions grant this loan to individuals who have a good CIBIL score. However, individuals with a poor CIBIL score can also apply for a personal loan. A few lenders may offer them this loan, but will charge a higher interest rate. Thus, it is advisable to always keep a check on your CIBIL score and improve it.

How a bad CIBIL score affects your chances of getting a wedding loan

A credit score of 750 or higher is ideal if you want to qualify for a wedding loan or personal loan. The higher your score, the more likely your application is to be accepted.

Lenders normally look for a minimum credit score of 750. This is the first step in determining whether or not to approve your application. Your credit score shows your creditworthiness and financial health. Maintaining a good credit rating will show that you are financially responsible. If you have a bad CIBIL score, you must improve it before applying for a loan. A good CIBIL score also helps you get a personal loan at a competitive interest rate.

Another thing that financial institutions take into consideration is your Credit Information Report (CIR), often known as a credit report. It helps lenders assess your repayment history. If you have a history of missed or late payments, it shows that you haven’t been able to make your payments on time in the past. They come to know that you are not a disciplined borrower. Having one or more outstanding debts also reflects badly on your report. Such factors may cause your loan application to be rejected.

How to Boost Bad Credit for Loan Eligibility

It can take up to 2 to 12 months to qualify for the loan, depending on the excellent or poor credit score. Here are some tips to increase your credit score.

  • Erase your unpaid debts

Paying off your remaining debts is the first step to improving your CIBIL score. If you have multiple debts with multiple credit cards and lenders, even missing a single payment will negatively influence your CIBIL score.

You should not withdraw money with your credit cards. While there may be cashback benefits available for using credit cards to withdraw cash, there are also a number of additional hidden costs. Eventually, you may fall into a debt trap with a high interest rate. Your CIBIL score would be negatively impacted.

  • Prioritize larger payments

If you have multiple loans, prioritize those with larger monthly payments to maintain your CIBIL score intact.

  • Do not continue to apply for credit if you have been rejected

If your loan application has been rejected, the information will be recorded on your credit file. If you try to apply to another bank after being rejected, they may reject your application due to your low score and previous rejections. In such circumstances, it is better to refrain from applying again and wait for the CIBIL score to improve instead.

If you apply for multiple loans or go over your credit card limit frequently, your CIBIL score will suffer. It can also come across as credit-greedy behavior. The best thing to do is to avoid taking out loans unless absolutely necessary. You must pay your credit card dues on time under all circumstances if you want to improve your credit score.

  • Regularly check your CIBIL score

A low CIBIL score can have a substantial impact on your financial situation. Whether you are applying for a home loan, or any other category, financial institutions will not grant credit without first checking the CIBIL score. Therefore, you should always monitor your CIBIL score and seek to improve it if necessary.

Closing comments

Knowing your CIBIL score can help you immediately assess your financial situation. This is why you should keep an eye on it by regularly consulting your CIBIL report. The CIBIL report is produced by four credit bureaus: TransUnion CIBIL, formerly known as CIBIL, Equifax, Experian and CRIF Highmark. By going to the websites of any of the credit bureaus, you can quickly and easily check your CIBIL score for free.

FAQs

  • What are the different CIBIL score ranges?

Here are the details on the different CIBIL score ranges (may vary by financial institution).

Credit score range Evaluation
Between 300 and 500 Poor
Between 500 and 650 Medium
Between 650 and 750 Good
Between 750 and 900 Excellent
  • How is a CIBIL score calculated?

A CIBIL score is calculated based on the information and facts contained in your credit report. Many factors are considered, including your payment history (35%), amount owed (30%), length of history (15%), new credit (10%) and credit categories used (10%).

  • Do I have to provide a guarantee to obtain a personal loan?

Personal loans are generally unsecured. Therefore, you are not required to provide a guarantee to obtain it. However, if you are unable to provide your payslips, you can use security to receive one.

  • Do I have to pay a high interest rate on a personal loan?

The applicable interest rate varies between lenders. Before making a decision, you need to compare them in order to choose the appropriate option. In addition to this, if your CIBIL score is 750 or above, you can get the loan at a competitive rate.

  • How many credit bureaus are there in India?

Four credit bureaus generate a person’s CIBIL report: TransUnion CIBIL, Equifax, Experian, and CRIF Highmark. You can quickly and easily check your CIBIL score for free by visiting credit bureau websites.

This is a joint publication.

Read it Recent news and recent news here

Comments are closed.