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car loan : What should be the CIBIL Score to take a car loan? This is a common question that arises in the mind of every person who dreams of owning a car. If you are also interested to know, then let us tell you that it depends on the policy of the car loan provider on what CIBIL score he provides the loan. Not only the CIBIL score, the car loan and its interest rate are decided keeping in mind the income, debt, job stability, and amount of down payment etc.
Overall, it can be said that not all companies follow any one rule. Still, if other factors are ignored, most of the loan giving institutions consider a CIBIL score above 700 to be better. Having a CIBIL score above 700 ensures that the borrower is willing to repay the loan. However, CIBIL score is calculated on the basis of loan repayment history of a person.
What is the interest rate?
Even if a bank or loan issuing institution approves your loan, it is not necessary that a permanent interest rate is applicable on it. Different companies decide the interest rates accordingly. If someone’s CIBIL or credit score is high then he gets a loan at a lower interest rate. On the contrary, more interest is charged on less CIBIL.
Also read – This sticker removes the entire horoscope of the car, if not applied then you will have to pay a heavy fine of Rs 10,000
Still, the loan taker should keep in mind that credit score alone does not suffice. The lender also considers many other things while processing the loan application. In this, things like your income, debt to income ratio, job stability are considered. If your credit score is less than 700, you can still get a car loan. In this case, you will have to pay higher interest rates and the loan conditions will be stricter.
What to do if CIBIL score is low?
Low CIBIL score is a matter of concern, because in this situation it becomes very difficult to take any kind of loan. Loan is not available if the score is too low. If due to any reason your credit score or CIBIL has become weak then you should make efforts to fix it.
In your efforts to get your CIBIL corrected, you should pay the loan installments on time. You should try to reduce the outstanding debt and make positive efforts towards improving the credit utilization ratio.
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Tag: auto news, Bank loan, business News, car, car loan
first published : March 12, 2024, 10:56 IST
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