Introduction
We all face unforeseen difficulties in our lives. From unplanned medical emergencies to home renovations, unexpected situations appear out of nowhere and disturb our financial plans. Planning your expenses is never an easy task. You may not always have funds lying around to fulfill sudden requirements. It is where instant loans step in. They are a source of instant financial support, which might help you immensely.
You can avail of instant loans anywhere you live. Instant loans in Delhi, Mumbai, Pune, and other cities come with minimum formalities and requirements. The most important aspect of loan approvals is a good credit score. You can get a loan online by knowing your credit score in advance. In this article, we will be analyzing the importance of a good CIBIL score for applying for an instant loan.
What is considered a Good CIBIL Score?
For borrowing money, a good credit score is of paramount importance. Credit scores are measured by the TransUnion CIBIL credit bureau in India. It is the most trusted bureau in the country to generate accurate credit ratings. Most lenders follow CIBIL guidelines when it comes to granting instant loans. Even if you want to get a loan online, a good CIBIL score is the topmost requirement for lenders.
When applying for an instant loan in Delhi, Pune, Chennai, or any other city in India, you need to know what a good CIBIL score is. The following table shows credit scores and their ratings.
| CIBIL Score | Creditworthiness | Probability of Approval |
| Less than 600 | Poor | Low |
| 600-649 | Doubtful | Difficult |
| 650-699 | Satisfactory | Somehow Possible |
| 700-749 | Good | High |
| 750 and above | Excellent | Very High |
Importance of a Good Credit Score for an Instant Loan
The following points discuss the importance of a good credit score to apply for an instant loan.
● Instant Approvals: Most lenders would consider you a low-risk investment if you have a credit score higher than 750. It means that your chances of getting your instant loan approved are very high. You would not have to wait for loan approval. If you want to avail instant loans in Delhi, Pune, Chennai, or any other city, a good credit rating can give you instant approval.
● Low-Interest Rates: People with a good credit score can avail instant loans at lower interest rates than others. It is because they can negotiate interest rates with their lenders. High credit score rating people are also offered low-interest rates.
● Low Processing Fee: It is an added benefit for people who have a good credit score. Processing fees and administrative fees are essential for loan disbursal. Lenders usually demand a hefty amount in the form of such charges. If you have a high credit rating as per the requirement of your lender, the chances are that you would not have to pay huge volumes of processing charges to them.
● Quick Disbursals: People with a high credit score usually get loan disbursal quicker than those with low credit ratings. It is because the loan is approved in a fast manner. Quick approval leads to a faster disbursal. Lenders do not hesitate to transfer funds to people with high CIBIL scores.
● Customizable Repayment: Instant loans are generally small in volume as they are used for emergencies and short-term expenses. Most lenders offer many special options for people with good credit scores. One of such options is the choice to select your repayment mode. Generally, instant loans are repaid through EMIs. With a high CIBIL score, you can choose the volume of your EMIs. It helps you to better plan your finances for the future.
● Less Documentation: If you have a high CIBIL rating, you probably do not have to go through a lengthy documentation process. Many lenders forgo certain details when it comes to low-risk investment. It quickens the process of availing an instant loan.
Conclusion
In conclusion, instant loan approval highly depends on your overall credit profile and your income. People who have been responsible for repaying their debts previously are seen as excellent and low-risk investments by lenders. On the other hand, instant loan procedures are breezy and hassle-free for people with a good credit score.
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