Impact Of Bad CIBIL Score On Your Loans

Credit information bureau of India keeps the records of all the information on loans and credit card payments attained by an individual.

This information is maintained for all member institutions and banks of cibil and is made available to them whenever they need it. The bureau gets this data from its members only and this data helps the banks in decision making process, whether a loan should be given or not, credit card should be issued or not to a particular customer.

On the basis of the records of the payments that a customer has made towards its accounts, cibil issues a score to every individual and this score is known as cibil score.

This score plays a very important role in fetching you a high or low interest rate from your lender on a secured or unsecured loan. Secured loan is something in which you put something as a guarantee and an unsecured loan is a one, wherein nothing is kept as a guarantee and the funding is based on your income financials.

Cibil score impacts secured and unsecured loan in equal way. People might think that, they are keeping their property papers as a guarantee, which is a big deal and so cibil score would not matter much. But this thinking is wrong; you need to keep in mind that your lender would not grant you funds, if you are a defaulter.

• It would not matter, whether you are going for a secured loan or unsecured loan; the interest rate would be high if your cibil score is low and rate would be low if the score would be high.
• You may have to face rejection in both the cases, if the cibil score is below average. No point would be taken into consideration for a secured loan, as they are considered to be less risky.

The policies of a secured loan are different from that of an unsecured loan, and so the funds granting decision would depend on several factors. There might be a possibility that you may get some waivers on your case, if something is coming out of the policy, but cibil rules are same for both secured and unsecured funding with no much difference.