We’ve been hearing all the time how personal loans make the best borrowing deal being unsecured & easily available. Plus, anyone & everyone can apply for a personal loan, belonging to even the smallest corner of the city. On top of it, it entails the flexibility to use the loan amount as per convenience, especially if you’re stuck bad.
The important question unanswered here is whether your loan repayment history affects your personal loan eligibility in any way. It’s nothing short of something valuable to have a personal loan whenever you’re financially maxed out. It is extremely simple to apply for a personal loan as it is 24*7 available.
Here, the personal loans are at greater exposure to risk. They do not admit any kind of guarantee or collateral security to protect their lending, So, they make an effort to reduce the overall risk quotient by considering other important factors. One of the eligibility criteria for personal loans to know the prospective borrower can repay on time.
How has digitization improved the personal loan process?
Digitization has most definitely changed the way personal loans were perceived earlier. Application has turned not only convenient but also faster through a simple process. However, that keeps the eligibility criteria almost unchanged to qualify for an instant personal loan.
Loan Repayment History is an important Personal Loan Eligibility Criteria
The loan repayment history is essentially the track record of all the borrowings till now. Every record reflects in the borrower’s credit report & majorly influences your credit score.
If you’re regular with loan repayments, then your repayment history will be positive as well. And so will the credit score. However, if you’re not paying loan installments on time, or miss even a single payment, it will show in your credit report and credit score. In fact, it affects your credit score.
Your future credit standing depends on your credit score
A credit score is one of the prime factors which confirms your eligibility for a personal loan. In essence, whether you’ll be approved or not. The Credit Information Bureau of India Limited (CIBIL) has all the possible records of the repayments made towards instant cash loans and credit cards.
If your repayment track record is clean, then you have greater chances to have your loan approved. However, if you’ve failed to repay in time, then your CIBIL will be low along with low chances of approval of your personal loan.
How does your loan repayment history help lenders?
A full track of your repayment history depicts how dependable you are as a borrower. When you have a good repayment history, it boosts the confidence in the lending institutions. Once a defaulter, always a defaulter. Therefore, lenders feel safe to provide loans to such an individual as compared to low score borrowers. So, this way you can evaluate the credit standing as well.
Instant cash loans are easily available on leading platforms. This can hugely assist in getting immediate funds for emergencies. So, to avail, it’s important to meet a few basic eligibility criteria including your loan payment history. This way its best to keep your records clear & clean!