CIBIL Score Tips: These are the major disadvantages of having a bad CIBIL score..
Often people do not pay attention to the CIBIL score, but if the CIBIL score or credit score is low, then there is a problem in getting a loan. On the other hand, if your CIBIL score is good, then you get a loan easily. CIBIL score can make many of your tasks easier in the banking system, while a bad CIBIL score can stop many tasks. Let us know what is CIBIL score (bad CIBIL score side effects) and what are the 5 disadvantages you have to face due to its badness.
First, know what is CIBIL score.
It is a three-digit number or say a score. Its range is from 300 to 900 points. It shows your loan eligibility. This number is decided based on your old loans, credit card bills, etc. If you keep paying all your loans and card bills, then your CIBIL score keeps improving, whereas if you default, then your CIBIL score keeps getting worse.
What are the benefits of a good CIBIL score?
If your CIBIL score is good, then it has many benefits. Every bank checks the CIBIL score of the person before giving a loan. In such a situation, you can get a loan easily and cheaply. You can even get a pre-approved loan offer many times and you can also get the facility of instant loan i.e. money coming into the account in a few minutes.
Disadvantages of a bad CIBIL score
If the CIBIL score is bad, then you also have to bear its loss. You have to face difficulty in all the work related to the bank. Let us know the 5 disadvantages of a bad CIBIL score.
1- There will be difficulty in getting a loan:
If your CIBIL score is bad, then you will have difficulty getting a loan from any bank, small finance bank, or NBFC. Banks fear that your CIBIL score is bad, that is, you may default.
2- A higher interest rate will have to be paid:
Even if some banks agree to give you a loan despite a bad CIBIL score, they will charge a higher interest rate. They try to manage their risk. They think that even if the person defaults on the last few EMIs, the bank should not incur any loss, so the interest rate is kept high.
3- You may have to pay more premium:
Many times insurance companies may also ask for more premium from you when the CIBIL score is bad. Actually, in such a situation, insurance companies feel that you can make more claims, so they can ask for more premiums. Many companies may even refuse to give insurance.
4- Difficulty in taking a home-car loan:
Just like personal loans, you may also have problems in taking a home loan or car loan. You may even have to pay more interest. There is also a problem in taking property on lease for business. The company may also ask you to mortgage something in exchange for giving you the loan.
5- There may be a delay in getting a loan:
The bank that will agree to give you a loan will also check the documents thoroughly before giving you the loan. Even if you apply for a gold loan or securities loan, there will be a thorough investigation. Even if you pledge something, the bank will look at you with suspicion and will do a thorough investigation. All this can take a lot of time, which can lead to a delay in getting your loan.
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