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  • Category: Miscellaneous

    At what credit score can a person get loan from banks?

    Want to apply for a bank loan based on your credit score? Find out from this forum discussion thread if it is necessary to have a good credit score in order to get a bank loan and if so how much it should ideally be.

    Nowadays credit score has become an important aspect. Banks and other financial institutions sanction loan to a person on the basis of credit score. The credit score is generally given by CIBIL. As per the website of CIBIL, around 80% of the loans get approved for a score of 750 and above. However, it may be noted that there is 20% chance of rejection of loan application if the credit score is around 750. Financial experts opine that if a person's CIBIL credit score is above 780, he/she can expect that his/her loan application will be accepted by any bank or any other financial institution.
  • #574208
    Normally loans are given to the beneficiary after total verification of all their details. Then they will be closely watching the payment being made regularly. If the customer is sincere and making payments without even one month default, surely within five or sixth month of installments, they send message for having sincerely honoring the payment and they are now eligible for further loans if interested. Last year , I have taken loan for my two wheeler and the payment period is 24 months. Now already 11 months have passed and the installments are paid regularly. Now the finance company is directly sending message for addition loan or any other property loan. So what I mean to say that at first instance they are contacting us through broker and from next transaction , they are keeping direct tract with the customer.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #574210
    Credit score makes only the first impression. Loan application of an individual with a poor credit score will not be viewed further by the bank loan officials. However, a good credit score doesn't necessarily mean that the loan will e granted automatically by the bank loan managers. They will process the application further in their own way and take a decision to grant a loan or otherwise only after being fully satisfied that the individual concerned has a credible repaying capacity.
    In my personal opinion taking loans should be avoided as far as possible except for cases like a home loan which provide attendant tax benefits as well as help in the creation of an asset. Moreover, such loans are secured loans in the terminology of the banks instead of unsecured loans like a personal loan or credit cards etc.
    It is better to avoid taking loans for luxury purposes like travelling or buying a fancy electronic gadget or jewelry.
    A credit score can be improved by paying all dues in time, maintaining a healthy mix of secured and unsecured loans, keeping outstanding balances low and applying for new credit in moderation.

    Let us encourage each other in sharing knowledge.

  • #574217
    Kailash, your information that credit score makes only the first impression is quite wrong. My experience says it is not like that. Banks do pass the loans if the credit history of the applicant is good enough. They do not even need any ITR or something. Once I went to a car showroom & selected a car, bargained for the price and was referred to the in-house executive of HDFC Bank for financing of the vehicle. The executive asked for my ITR and I told him that I do not file an ITR, he asked whether I use a credit card, I said yes. I gave the executive my credit card number and he told me that he will contact me within 2-3 days and inform about the bank's decision about financing of the car. Here, mind it that the car was not some Maruti 800 or anything similar to that.

    I left the car showroom & was on my way back to my office, must have been 15 minutes only that I got a call from the same executive. He told me that Bank has approved the loan for the car and I can take the delivery of the car whenever I want it. I took a u-turn and reached the showroom again and met the executive. I asked him and he confirmed that my loan for the car was approved on the terns which we had agreed upon. He also confirmed that I can take the delivery within half an hour. I asked him how was it possible that I can take the delivery in half an hour and he told me that my credit history was so good that the bank approved the loan on that basis only. I asked the executive about the address verification etc and he told me that they will do it afterwards as it was mere a formality in my case. I rang up my brother, asked him to bring the check book & the upfront-money. My brother came within 15 minutes and I literally took the delivery of the car within an hour or so without any type of verification.

    So, Kailash, my experience says that your information about the importance of the credit score is 100% wrong.

    When you talk, you are only repeating what you already know. But if you listen, you may learn something new!

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