Every time people ask me ” can we get loan on silver ?” and “Loan against Silver”
My answer for these queries is “Why not !”
Silver also have a value. Valuations of silver is almost same as gold or other precious metals
Even price of Silver was 72000 rupees per kg in 2008, which was three times against Gold price, which was 16000 per gram that time.
In India very few financial institutions are providing loan against silver.
How lender value Silver for taking loan against silver?
Bank calculate the value of Silver at standard rate, which India bullion and jewellers association (IBJA) announce each day. Banks or pawn broker takes a haircut of 40-60 % on the market value of Silver for providing loan.
Forms & Documents for loan against silver
KYC (Know your customer) is the primary requirement for availing any type of loan from banks. Further following are the requirements.
Appropriate DPN note.
Letter of continuity.
Hypothecation of agreement.
Letter of general lien and setoff.
Hypothecation of assets other than agriculture.
Agreement for pledge of silver ornaments.
Undertaking from borrower /Guarantor for disclosure to CIBIL.
Any other required document mentioned for a sanctioning loan against silver.
Eligibility for loan against silver
Any person engaged in agriculture or allied activities and persons engaged in activities permitted by GOI /RBI to be classified under agriculture. The applicant should satisfy the KYC guidelines & Lender will give loan based on declaration. Additionally, proof of pursuing the activity with the amount of loan to be given for loans above Rs 1 lakh.
Type of Loan
There are two types of loans against Silver
(i) Short Term Production Credit. Loan seekers can avail short term Production credit as a UGC/Cash credit/Short-term loans (tenability/tenor for a period up to one year).
(ii) Term loans: Loan seekers can avail loan as short-term loan for a tenure from 36 to 60 months depending upon the purpose.
Purpose of the loan [loan against silver]
Generally, RBI made provision of bullion loans to meet any unexpected requirement of rural or unsalaried peoples. Agriculture Silver loan is for meeting crop production expenses and/or for creation of assets to be used in his/her farming operation or for allied agricultural activities like diary, poultry fisheries etc and Agri related activities.
The purpose of loan can be for anyone/variety of purposes for meeting the farm activity related expenses including that for allied activities.
Lender will do loan assessment on the scale of finance for crop production and actual credit requirement of farmers for other purposes. However, this shall be based on the declaration of the farmers in the application form.
Lender will extend the loan against silver only against pure silver jewellery and not against silver vessels / articles, etc
Maximum amount which lender provide for a loan against silver is Rs.5.00 lacs
As education cost is galloping along with increasing inflations. There is need of student loan for keeping pace with increasing education cost.
Quality education is a must for a complete and successful life all together. For many, it is equivalent to graduating from a top institution in India or abroad.
Keeping this in mind, parents/guardians, who want to provide their children with the best possible education, invest their money in different asset classes viz. Mutual Funds (MFs), ULIPs, Fixed Deposits (FDs), Sovereign gold bonds, etc.
Despite all this, one may still encounter a shortage of funds. A student loan, therefore, plays a vital role in such a scenario by helping to bridge the gap between the shortfall and the required amount.
Education loan in India
HDFC Bank provides student loan up to ₹ 20 lakhs. There is no collateral for a loan of up to ₹ 7.5 lakh.
Loan Amount (Rs.)
Effective ROI (Linked to Repo Rate)
Up to 4 Lakhs
Loans greater than Rs. 4 Lakhs and up to Rs. 7.5 Lakhs
Loans greater than 7.5 Lakhs
Loan rates of a Pvt Bank
The Bank is free to decide the spread over the Repo Rate. The spread may undergo a change during the tenure of the loan.
Customers who have already availed disbursement or received a sanction prior to October 1, 2019 will continue to operate on MCLR. Existing customers can get in touch with our customer care, if they wish to switch to Repo Rate.
Increasing education Cost
According to studies, the cost of education is increasing at an average of 15% per annum. The tentative cost of an MBA is up from Rs 2.5 lakh to Rs 20 lakh in 15 years. So if a couple saves Rs 2,000 per month for 15 years, at an average rate of 12%, they will save approximately Rs 9.5 lakh.
Educational Loan: University grant commission
Vidya Lakshmi is a first of its kind portal for students seeking Education Loan. They have developed this portal under the guidance of Department of Financial Services, (Ministry of Finance), Department of Higher Education (Ministry of Human Resource Development) and Indian Banks Association (IBA). NSDL e-Governance Infrastructure Limited has developed and maintaining this portal.
Vidya Lakshmi education loan [student loans in India]
Honourable Union Finance Minister Arun Jaitley in his budget speech for FY 2015-16 said: India is one of the youngest nations in the world with over 54% of the total population below 25 years of age. Our young should develop in both field, education and employable for the jobs of the 21st century. The Prime Minister has explained how Skill India should coordinate with Make in India.
Yet, today less than 5% of our potential workforce gets formal skill training to be employable and stay employable. With a view to enable all poor and middle-class students to pursue higher education of their choice with no constraint of funds, I propose to set up a fully IT based Student Financial Aid Authority to administer and monitor Scholarship as well Educational Loan Schemes, through the Pradhan Mantri Vidya Lakshmi Karyakram. We ensure no student misses out on higher education for lack of funds. We expect the based mechanism under the Pradhan Mantri Vidya Lakshmi Karyakram to provide to students a single window electronic platform for Scholarships and Educational Loans.”
[loan for students in India]
Vidya Lakshmi is a first of its kind portal for students seeking Education Loan. We have developed this portal under the guidance of Department of Financial Services, (Ministry of Finance), Department of Higher Education (Ministry of Education) and Indian Banks Association (IBA). NSDL e-Governance Infrastructure Limited (NSDL) has developed and maintaining the same. Students can view, apply and track their education loan applications to banks anytime, anywhere by accessing the portal. The portal also provides linkages to National Scholarship Portal.
The Salient features of the scheme are as under:
The scheme promises loans up to Rs.7.5 lakh for studies in India and up to Rs. 15 lakh for studies abroad.
There is no collateral or margin for loans up to Rs. 4 lakh and the interest rate is not to exceed the Prime Lending Rates (PLR). For loans above Rs. 4 lakh the interest rate will not exceed PLR plus 1 percent.
The Borrower should repay the loans in 5 to 7 years with provision of grace period of one year after completion of studies
Repayment of an education loan is deductible under section 80E of the Income Tax Act. The yearly limit for deduction is Rs. 40,000 (for both the principal and the interest). The deduction will be available for a maximum of eight years starting from the day you repay.
About NSDL e-Gov
NSDL e-Governance Infrastructure Limited (NSDL e-Gov) was originally setup as a Depository in 1995 and has over the years used its inherent strengths, project management capabilities & technology expertise to deliver state-of-the-art e-Governance solutions which has helped Governments to identify and clear bottlenecks, promote transparency, reduce service delivery costs and deliver public services efficiently. The solutions have efficiently made use of information and communication technologies as a tool for delivering public services and benefits to society at large. Some key e-Governance projects undertaken by NSDL e-Gov are:
Tax Information Network (TIN)
Central Record keeping Agency (CRA) for National Pension System
Electronic Accounting System in Excise & Service Tax (EASIEST)
GST Pilot Project
Registrar for Aaadhar enrolment and eKYC/Authentication Services
National Judicial Reference System
NSDL e-Gov works closely with various Government agencies for designing, managing and implementing e-Governance Projects. Over a period of time, NSDL e-Gov has gained varied experience and expertise in areas that help Governments overcome various challenges faced by them in fulfilling their core responsibilities of delivering public services to the society.
NSDL e-Gov has also established Service Centre network across the country which serve as access points for the public and Governments is using them efficiently to deliver quality services in a user friendly and transparent manner to the citizens.
It covers the basic course fee and other related expenses such as any hostel/ accommodation charges, library, project, exam and other miscellaneous.
Who can apply for the student loan in India?
A student is the main borrower. A parent, spouse or sibling can be the co-applicant in student loan in India.
Whom is the student loan offered to?
They offer it to students who want to study in India or pursue higher education overseas. The maximum amount offered for studies in India and overseas are different and varies from one bank to another.
Types of courses covered under the loan
You can take it for a full-time, part-time or vocational course and graduation or post graduation in the fields of engineering, management, medical, hotel management, architecture, etc.
Education loan eligibility in India
To apply for the loan, one must be an Indian citizen, having secured an admission into a college/university recognised by a competent authority in India or abroad. The applicant must have completed his higher secondary level schooling.
Some banks offer the loan even before one has secured admission into the university.
As per the Reserve Bank of India (RBI) guidelines, there are no restrictions on the upper age limit, but some banks may have it.
Documents required for education loan in India
The banks require additional documents such as admission letter of the institution, fee structure, Class X, XII and graduation (if applicable) mark sheets. Also required are the income documents such as salary slips or income-tax returns (ITR) of the co-applicant.
Loan financing, collateral requirement for education loan
The banks can finance up to 100% of the loan depending on the amount. Currently, for a loan up to Rs 4 lakh, there is no margin money required. For studies in India, Applicant needs to pay 5% of the required loan amount. For studies overseas, the required margin money increases to 15% a loan.
The banks also ask for collateral for loans above Rs 7.5 lakh. Presently, the banks do not ask for any collateral or third-party guarantee for loan up to Rs 4 lakh. For loans above Rs 4 lakh up to Rs 7.5 lakh, Bank/financier need a third-party guarantee. Lenders ask a collateral for a loan exceeding Rs 7.5 lakh.
Once the banks accept loan application, they disburse the amount directly to the college/university as per the fee structure.
Interest rate of student loan
The banks use the Marginal Cost of Funds based Lending Rate (MCLR), plus an additional spread to set an interest rate. Presently (in 2017), the additional spread is in the 1.35-3% range.
Repayment of student loan
The student does repayment of loan as soon as he/she get the employment. The repayment starts as and when the course completes. Some banks even provide a relaxation period of 6 months after securing a job or a year after the completion of studies for repayment.
The repayment period of education loan is between 5 and 7 years, but financier can grant an extension of loan beyond that as well.
During the course period, the bank charges simple interest rate on the loan. The payment of simple interest during the course period lessens the equated monthly instalment (EMI) burden on the student for future repayments.
Precautions while availing student loan
While applying for a loan, one should also look out for bank charges such as those related to processing, preclosure, late payment of EMIs,. Most lenders charge processing fee of around 0.15 percent of the education loan amount.
Benefits of education loan under Income-tax
Section 80E of the Income Tax Act allows for deduction on the interest paid on the repayment. They allow this deduction only for the individuals paying interest on the loan for himself, spouse or children or for the student to whom you’re a legal guardian.
You can deduct the entire interest amount paid from your taxable income. They allow this deduction for a maximum of 8 years. The principal amount does not qualify for any tax deduction.
Conclusion: education loans
Taking an education loan helps you in building a good credit score as this is the first loan in a person’s life. So It will create your credit score as soon as you enter your professional life.
If you repay your student loan on time with no defaults, then it also makes easier for you to get home loan, car loan, business loans, etc., in the future.
” This is indeed a bold growth-oriented budget in terms of Indian economy. Absence of the much-feared Covid Tax/Covid Cess and the surcharges on Income Tax is a great relief. Privatization of 2 nationalised banks and proposal of monetization of assets like land are clear positives. Raising FDI in insurance from 49% to 74% is a great step by the finance minister, which will fuel up Indian financial market. Market response to the budget reflects growth optimism and Indian Stock Market triumphed in happiness.
What is Income Tax
First of all let us understand what is Income tax is. Indian Income tax system levies tax on individual taxpayers on the basis of a slab system. Slab system means different tax rates are there for different ranges of income. It means the tax rates keep increasing with an increase in the income of the taxpayer. This type of taxation enables progressive and fair tax systems in the country. Such income tax slabs tend to change during every budget.These slab rates are different for different categories of taxpayers. Income tax has classified three categories of “individual “taxpayers such as:
Individuals (aged less than of 60 years) including residents and non-residents
Resident Senior citizens (60 to 80 years of age)
Resident Super senior citizens (aged more than 80 years).
Income tax slabs FY 2021-22.
Current Income Tax Slab FY 2021-22
(Income tax slabs Applicable for All Individuals & HUF)
The Finance Minister Nirmala Sitharaman has declared several proposals for the benefit of depositors, investors and taxpayers. Sitharaman said that the tax system should put a minimum burden on the taxpayers. The FM surprised taxpayers by not announcing any change in income tax slab rates. Taxpayers were expecting a big change in income tax slabs. Therefore Finance minister disappointed Individual Taxfillers expecting such changes.
There is a big relief in filing ITR for senior citizens above 75 and NRIs.
The Finance Minister proposed that If a senior citizens (above 75) is earning only pension and interest income from deposits then there is no need to file Income Tax Return. The government has proposed to allow tax exemption on maturity of ULIP having annual premium up to Rs 2.5 lakh. However maturity of ULIPs was already exempted under EEE (Exempted, Exempted, Exempted) for the ULIP policies falling in that category. Income of EPF (Employees Provident Fund)interest income above Rs 2.5 lakh will be taxable.
EPF : Employees Provident Fund (EPF) is a scheme in which retirement benefits are accumulated. Under the scheme, an employee has to pay a certain contribution towards the scheme and an equal contribution is paid by the employer.
The finance minister also proposed to provide GST relief by reducing inverted GST structures.
Nirmala Sitharaman had earlier indicated previously to present a “budget like no other”. It was hoped that this year it will be a Budget like no other for taxpayers as well. Everyone was epecting from The finance minister to provide relief to the pandemic-hit common man as well as focus more on driving economic recovery. Experts was already expecting that Budget 2021 could be the starting point for picking up the pieces after the economic destruction caused in year 2020 by COVID-19 pandemic.
The salaried individuals were hoping that the government would broaden some tax advantages through Budget. In the run-up to the Budget presentation, several experts and professional bodies like ICAI, and Expert Panel had recommended the government to increase the deduction limit under Section 80 C of the Income Tax Act,1961. Some even suggested the government to allow higher deduction under Section 80D and increase the deposit limit in PPF (Public Provident Fund) to Rs 3 lakh.
PPF: Public Provident Fund scheme is one of the most popular long-term saving-cum-investment products, mainly due to its combination of safety, returns and tax savings. The PPF was first offered to the public in the year 1968 by the Finance Ministry’s National Savings Institute.
Dividend payment to REIT/InvIT are exempted from TDS
Dividend payment to REIT/InvIT are exempted from TDS, FM Sitharaman announced in Budget speech.
With effect from April 1, 2020 there will be a drastic change of Taxes for REITs and InvITs. In India these alternate investment vehicles has raised more than Rupees 250 billion of capital. Until now Indian Companies are need to DDT and shareholders (except non-corporate residents) were exempt. In case of business trusts, dividends used to be exempt at each level. However the government has did not announce any specific relief to such trusts in Buget proposals.
If the SPV has opted to be taxed at the concessional corporate tax rate of 22% (against the general rates of 25%/30%), the dividends declared by the SPV will be taxable in the hands of the unitholders and the business trust would be required to withhold tax at the rate of 10% when distributing income representing dividends received from SPVs.
2. Tax assessment can be re-opened only up to 3 years
3. Dispute Resolution Committee for small taxpayers
4. Additional deduction of Rs 1.5 lakh for purchasing affordable house.
5. Relief from double taxation for NRIs
Income Tax on Gifts/Presents
Gifts or Presents for an amount up to Rs 50,000 are completely tax free. If upper limit of Rs 50000 of exemption is breached, the whole amount of gifts become taxable. However, gifts/presents/offering/Streedhan(hindi) which an individual receive from relatives are exempt from tax by virtue of Section 56 of the Income Tax Act. According to the IT Act 1961,
These undermentioned persons qualifies as relative.
Brother or Sister
Brother/ Sister of the spouse
Brother or sister of either of the parents
Any lineal ascendant or descendent
Any lineal ascendant or descendent of the spouse.
Apouse of the persons referred above.
Friends do not come under ‘relative’ and any gifts which an individual receive from them are taxable. Further, gifts received at the time of marriage (Stridhan) are exempt from tax.
But, gifts on occasions like birthday, anniversary, etc. of an individual will be charged to tax as per above mentioned limits and will be clubbed in income as per tax slab.
Budget 2021: Buyers of affordable houses will get more time to avail additional tax benefits
According to Budget 2021; By buying an affordable house, a taxpayer may avail tax benefits up to Rs 3.5 lakh on interest paid on home loan taken to buy such a house.
Budget 2021-22: This is time to give a boost to the buyers of affordable houses. Therefore Finance Minister decided to extend the time period of taking loans to buy such houses by one year – i.e. from March 31, 2021 to March 31, 2022 – to avail additional tax benefits of Rs 1.5 lakh under section 80EEA of the Income Tax Act.
Section 80EEA on affordable housing loan
Section 80EEA of Income Tax,1961 provides tax benefits up to Rs 1.5 lakh on the interest paid on loans taken for Residential House Property for affordable housing. The benefit is over and above the tax benefit of Rs 2 lakh available under section 24(B) of the Income Tax Act on interest on Housing Loan on both self-occupied and rented properties.
So, by buying an affordable house, a taxpayer may avail tax benefits up to Rs 3.5 lakh on interest paid on home loan taken to buy such a house.
The Maximum deduction allowed under this section is Rs 1,50,000 or interest payable on the home loan, whichever is less and following condition should be satisfied to claim deduction under section 80EEA of Income Tax Act. Following are the conditions of such loan.
1. Loan availed for acquisition of Residential Property.
2. Loan has been sanction during the financial year 2019-20, 2020-21 or 2021-22.
3. The Value of house property does not exceed Rs 45 lacs.
4. The assessee does not own any residential house property on the date of sanction of loan.
Conditions mentioned in last year’s Finance Bill with respect to the carpet area of the house property in real estate projects approved on or after September 1, 2019 are as follows:
To be qualified as an affordable house, the carpet area of the house property should not exceed 60 square meter (645 sq ft) in metropolitan cities of Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad,Greater Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region).
In other cities and towns, the carpet area should not exceed 90 square meter (968 sq ft).
Learn more out of our Blogs
Budget 2021 for taxpayers | Income tax slabs FY 2021-22
Cibil score is a very important metric for approval of all kinds of loans in India. Low cibil score is big issue and low credit score is a hinderance in approval of any kind of loan.
When we talk about loans.
There are three types of Loans.
1. Secured Loans
Mortgage loans, loan against property, Housing loans and auto loans come under the category of secured loans as they are backed by some type of physical assets. Basically, a secured loan need borrowers to offer collateral, while an unsecured loan does not. This difference affects your interest rate, borrowing limit, and repayment terms.
2. Unsecured Loans
Personal loans, business loans and credit cards come under unsecured loans as there is no asset that is given as security.Secured loans are not just for new purchases. We call Secured loans as home equity loans/home equity lines of credit. These are based on the current value of your home loans or home equity home minus the amount still owed. Such loans use your home as collateral.
3. Consumer Loans
Now lets us talk about a hybrid kind of loans, which are a mix of both the categories i.e. Gold loans, loan against securities and credit cards against Fixed deposits. Overdraft facility is also a mix of loans, as this is only a temporary liability. Banks approve these loans even in case of low credit score.
Can you challenge a default due to cheque bounce?
You can very well challenge the default case arising due to cheque bounce or any unwanted credit crunch arises because of situations created by natural events/disasters. You should consult Single debt for legal help on these type of issues.
Good cibil Score is Important for a Personal Loan
A personal loan is an unsecured loan that does not require the customer to pledge any kind of collateral. Banks/Financial institutions sanction loan after scrutinizing the CIBIL score of the customer. This is where the credit history of the borrower plays its part. TransUnion CIBIL Ltd also referred to as the Credit Bureau of India is an RBI licensed company that maintains records of loans and credit cards.
A CIBIL credit score for a loan is a 3-digit number ranging from 300 to 900 that speaks for the credit history of the customer. The higher your CIBIL score, the better are your chances of loan approval. Also, the sanctioned loan amount depends on how good your CIBIL score is. Read more to know about the ways to get a personal loan for a low CIBIL score.
Minimum credit Score for approval of a Personal Loan
CIBIL score required for a personal loan is usually 750 or above. The credit score for a personal loan plays a vital role in determining your eligibility. It also helps lenders in assessing the permissible limit of the amount which they can sanction as your loan (apart from other eligibility criteria). However, achieving an ideal credit score is not a big deal, but still you should follow certain rules to keep your credit history neat and clean.
For those who do not have an eligible CIBIL score, there are certain things that can be done in order to get loan approval and/or improve creditworthiness.
Regular Income earning job/business: If you have a good, regular income, then there are chances of getting a loan approval. However, please note, your loan approval depends on a multitude of factors, including type of job, employed, income and credit score.
Paying Taxes: Regular payment of taxes gives a good impression of the applicant’s profile.
Bank Balance and good investment portfolio: A good bank balance reflects one’s capability to repay the loan which certainly increases the chances of getting a loan. If you have enough Mutual Funds and Stocks in your investment portfolio, you can easily take loans against securities.
Guarantor / Co-applicant: You can ask a family member with a good CIBIL score to be the guarantor or co-applicant for your loan.
Repay Your Debts on Time: Repayment of all your EMIs on due dates and credit card bills can help you build towards a good CIBIL score. It is better to pay all your EMIs through ECS mode, so that you will pay your EMIs on time.
Reduce the Loan Amount: You should always take a loan lesser than the approved limit. For example, your annual salary is 10 lakhs and according to that you can get a personal loan up to 2-3 lakh. So you should avail personal loan lesser than your lower limit, that is 2 lakh. This will improve your credit score in the coming future.
Boost your Credit score with a deposit/collateral based loan
This is a quite tricky idea to improve your credit score immediately. As you are already struggling with a low credit score, So you will not get any secured or partial secured loans. Then what to do?
In this situation, try this.
You should take a credit card against fixed deposit (small limit) in a nationalized bank. By this way, you can easily get a credit card.
Now you should keep following two things in mind.
You should use the 20% – 30% limit of this credit card for next three months.
Keep using this card in low utilisation mode for these three months.
Pay your full credit card bill in time.
This is a rapid way to boost your credit score in one month.
Still there are various online loan providing websites which are providing loans to the individuals having low credit score
If still you are not getting a loan, then get a customised loan with comfortable interest rates. Don’t forget to mention your current credit score
In, we carry away most of the jobs through mobile applications and so are the loans. Therefore, We should have a good credit score to avail fast loans.
What is CIBIL? What does it mean to a common person?
Let us start with the full form of CIBIL. It stands for CREDIT INFORMATION BUREAU OF INDIA LIMITED. A credit bureau get a licence from RBI and comes under the Credit Information Companies (Regulation) Act 2005. CIBIL score is a 3 digit numeric summary of your credit history which comprises your loans and enquiries. This score ranges from 300 to 900. If your score is higher than there are maximum chance, you can get approval for your loan. Lenders consider a credit score above 750 as an ideal mark for approval of a loan.
CIBIL score plays a vital role in the loan application process. As soon as an applicant fills loan application with supporting documents, It is the duty of the lender to check the creditworthiness of the applicant. CIBIL scoring is the only means of checking the credit history of the borrower. CIBIL score shows the loan repayment history of the borrower which gives a clear picture of the borrower that how he has repaid his old loans and his credit behaviours.
How to check CIBIL scores?
There are various online platforms to check your CIBIL score. I have divided them in following two categories.
Banks and credit rating agencies: You can check your CIBIL with your bank if you use net banking facilities. Other direct options are also available to check your credit score with TransUnion CIBIL, EQUIFAX, CRISIL and CRIF. They charge some fee for generating a credit information report (CIR) which comprises all the details regarding loans and repayments.
Private partners and loan providers : There are various loan providers and online lenders like Indialends, Paisabazaar, PolicyBazaar myloancare, PAYTM and creditmantri (They provide CIBIL score free of cost). These are lenders who can provide you CIBIL score based on your credit history they don’t ask for any charges to provide a credit information report. FREE CREDIT REPORT: If you have availed loan you can get a detailed Credit report (CIR) on PAYTM as well. Websites of these lenders are:
You might have seen or heard that few people don’t have any credit score or sometimes some wrong loan entries are there in your CIR. Where does this data come from?
It bound all the lenders and banks to share their lenders information to central agency CIBIL collectively on a monthly basis. Loan enquiries are also being shared to CIBIL in the same way. This is how the data is being compiled with CIBIL. CIBIL captures data based on contact details. Sometimes there is a slight error of digits in contact number or email address due to which the loan details get uploaded in someone else’s report. You can rectify such errors can by communicating the same with CIBIL by the individuals.
What factors affect CIBIL score
Before talking about the factors affecting CIBIL Score, let us talk about a person who has no credit history, means ‘0’ Zero credit score. How to solve this issue. If you also have such issues, then no need to worry. It means you have availed none loan. So there are multiple factors which affect your CIBIL scores.Factors affecting your credit score
An increase in current balance of your credit card indicates an increased repayment burden and this may affect your credit score negatively.
For getting a good credit score you should pay all your EMIs and or credit card bills on time. Full payment of credit card outstanding creates positive scoring in your report.
Multiple credit Enquiries
If you have recently made multiple queries for personal loans, auto loans or other kinds of loans and you have been rejected by lenders then you should wait for a few months. If you raise multiple loan enquiries, then Banks/lenders consider you as credit hungry individual. Avoid credit hungriness.
Ideal credit score for taking loan
Basically loans are of two types, secured loans and unsecured loans.
Housing loan auto loans and mortgage loans come under secured loans as we hypothecate them with some physical assets. Therefore secured loans can be granted with ‘0’ credit score or no credit history. Sometimes there are some EMI/loan defaults with genuine reasons, so the lender can avoid these and clear the loan application of the borrower in case of a low credit score. It means secured loans get approval on credit score lower than 700 as well.
Personal loans and Credit cards are unsecured loans, for sanctioning then lenders need a good credit score of the borrower. Ideal CIBIL score for personal loans and credit cards is 800+. Some banks or lenders can lend on 750 also, you need to check with the bank as per the loan amount and case to case basis.
You can improve your credit score by paying all your dues in time. A good credit history is very important for approval of any kind of loans. Follow these simple steps to get an ideal cibil score.
Always pay your EMIs on time
If you have a credit card, use its credit limit as minimum as possible
Maintain a healthy mix of credit between secured (home loans & Auto loans) and unsecured (Personal loans & credit cards).
Monitor your co-signed, guaranteed and joint account on a monthly basis. If you are a guarantor of some borrower, then It means that you are also a part of that loan.
Never make too many frequent credit enquiries.
Review your credit history frequently to avoid some wrong entries in your report.
A review video of credit report generated from Paisabazaar portal.
How can you remove your wrong entries reported in your CIBIL
It is very important to have a periodic review in your CIBIL report to report any wrong entries. If you have any wrong entries or some defaults which have been resulted because of genuine reasons (hospitalisation, relocation, loss of job or lockdown situations) then you can write to CIBIL about the same and as them to remove such default/ wrong entries.
You can report wrong entries in your CIR to CIBIL Consumer Dispute Resolution: