CIBIL score matters for personal lending from fintech companies. It is a 3-digit numeric summary of your credit history which ranges between 300-900. This is mostly the first impression for banks, digital lenders and credit unions. It helps them decide the upper limit or whether or not to grant you the personal loan altogether. The closer your score is to 900, the higher your chance of getting the desired funds. This is because it reflects how reliable you are in fulfilling debt obligations and then comes across as a low-risk customer.
The LazyPay personal loans offer up to ₹5 lacs and a limit extension of ₹1 lac. This is done via a 100% online procedure without multiple visits. Pick a convenient repayment period between 3 – 24 months at pocket-friendly interest rates. The eligibility criteria, application process and documentation are also hassle-free. However, you will have to ensure a good credit score to be able to enjoy these benefits. Look at the role it plays.
Application Approval
A high CIBIL score above 750 is a catalyst to getting your application approved. This is because you have passed the credibility test and stand a good chance of being qualified to get the funds in your bank account. This also speeds up the entire personal loan process which is quite helpful during immediate needs like medical emergencies, last-minute travel or a quick home repair that cannot be delayed. The lender is less likely to doubt or ask for additional documents to be sure about you.
Unsecured Loan
An instant personal loan does not ask for collateral. This means borrowers do not have to pledge their car, home or other valuables to receive funds. But this is where the CIBIL score comes into play. The lender will decide whether to:
- consider the application first
- approve the desired limit and
- tweak the interest rates, if possible
All these will partially depend on your credit report. It is necessary to be careful since they do not have your assets as a safety net. A high score means you are financially sensible and responsible. You are less likely to default on EMIs and pay them in full for all instalments across the tenure. These characteristics make you a reliable candidate to get loans.
Bargain Fees
Impressive scores work in your favour and allow negotiating the charges linked to the loan. For instance, you may be able to command a lower processing fee. This is much-needed to reduce the overall spending on the loan procedure. Lenders usually agree since you are a credible candidate which also makes you a valuable customer. Most digital lenders wish to lend funds to customers who are trustworthy and minimise costs to ensure long-term loyal relationships and goodwill. But try not to haggle too much.
Borrow High Amounts
A score above 700 may help you get the desired funds. Lenders are less likely to hesitate about offering a higher credit limit, fearing an EMI failure. Payment history makes up for the largest share (35%) of a credit report and it determines your creditworthiness. It means you have successfully cleared previous debts and bills. A good history also shows that you are well-committed to your financial obligations, which is a big plus point for lenders. So, now you can get a big chunk of money but pay interest on only the borrowed amount and not the whole credit limit that is available. Download the loan app from the Android or iOS stores to start applying for the loan.
Interest Rate
A personal loan interest rate is often a deal breaker. High interest is an unnecessary expense and can lead to unaffordable EMIs. It might especially be difficult for millennials to repay the borrowed amount and break their savings and investments.
LazyPay’s Xpress Cash interest rates start at 18% and can go up to 25% based on the profile and amount. A candidate with a high score may be able to ask for a decent interest. This is critical since the rate of interest impacts the repayment tenure in a significant way. So, you can try to regulate the rate and become debt-free soon. This can further help to boost your CIBIL score and put you in a favourable position to borrow in the future.
A fintech might not even consider your application anymore if you have a low score. This is when your bank balance will not matter either. So, try to achieve at least 700 points which is ‘good’ in the eyes of the lender to get loans. This can be done by paying your bills on time, checking your credit reports frequently for errors, keeping old accounts intact, increasing your credit limits and maintaining older credit cards. Avoid delaying the EMI payments since this may also lower the score. Know that being consistent and careful may help increase your score within the 6-8 months easily.