What is cibil & how to improve cibil score for availing loan facility?

CIBIL is India’s first Credit Information Company or Credit Bureau. They maintains records of all credit-related activity of individuals and companies including loans and credit cards. 

These credit related activities details will be provided by financial institutions or banks on monthly basis. After receiving of these data Cibil provides credit report or credit score. Based on the credit score , customer's will get credit facilities like loans , credit cards.

You can improve your Credit Score by taking care a good credit history. You can follow these below points and improve history.

1. Pay your EMI or dues on time : If you have taken any loans or credit card then pay on time to avoid to harm your credit history.

2. Use low Credit Cards limit - If you are using credit card then use lower limit as you can because of higher limit utilization cause lower score & lower limit utilization cause higher score. If you will use more than 30-35% of total availing credit limit than its affects your credit score.

3. Good score to get credit facility - Most of the lenders are funding to customers whose cibil score is more than 750 and even gives benefits in rate of interest. Even you will get loan on lower score less then 650 but you will not get good rate of interest and it effects on higher monthly EMI so for good score you have to keep repayment regularly.

4. Don't do regular credit inquiry -  if you will do regular loan or credit card inquiry that will reflect in your credit report. when you applied for loan or credit cards but your application has rejected then don't intimidate apply with another lender because of rejection of your previous application details was updated in cibil report and when you applied again then its will reflect to another lender and it cause another application so just wait till good cibil score.

5. Do not settle any loan - You should not settle any loan because it affect your cibil score.when you avail the loan but you are not capacity to pay that loan completely then you not pay complete amount as actual then loan will close by lenders but they reflect this account settled in cibil and it shows negative and it affects your credit score.

6. Do not take many loans - When you taking loan there are two types loan secured & unsecured when you will take many unsecured loan then lenders see it as negative & it cause to decline your loan application so you can do to avoid such incidents take loans both as secured loans like car or Home loans & unsecured like personal loan or credit cards.

7. Check regularly your credit report - You should keep eye on your credit report time to time so that you can track that what's going on with your credit record.

10 factors you should know while taking a Home Loan

If you looking to take your own house then its good news but before that you should know that you have enough money to pay because of now a days its not quite easy task to get your own dream home on cheapest price.

This is the task which you will do once in a life then you should very careful while selecting your own house then you have last option to take loan and you have best option to choose but it depends of your requirement.

So we are sharing you to consider these check points while taking Home loan. 

1. Market research for loan  - Initially you should research of best available loan option in the market. Before taking decision you should check best option which can get from any loan adviser or direct to finance companies or banks.

2. Check rate of interest - Rate of interest should be lower because of its affect your monthly EMI capability. It very company to company or banks to banks. Generally it starts from 8.30% or 8.35% rest depends on NBFCs or Banks. so lower Interest rate then lower EMI.


3. Know about Floating or Fixed interest rates - There are two option to select interest rates one floating & another Fixed rates. Floating rates will depends on market it will change according to market and fixed rates can not be changed but if you are taking long tern loan that you should go with floating rates because of most of the cases with long tern loan gets cheaper rate that fixed.

4. Check processing fees or other charges - You should know about processing fees & other changes if you are taking first time loan or want to transfer his remaining loan fund to other banks.


5. Cibil Score - Cibil score is very crucial part of loan if your score is very lower side it may reject loan application or higher interest rate. If your cibil score is 750 or above then you will receive lower interest rate & chances to get loans approval is higher side.


6. Know foreclosure charges - Recently RBI has made guidelines that no one lenders will receive any amount from customer related to foreclosure penalties so keep in mind that do not pay anything extra while foreclosure loan.


7.  Documents Required - You have required your ID & address proof , bank statement of last 6 months or 12 months as lenders required.

For Salaried - 3 months salary slips , Form 16 
For Self-Employed - last three years ITR with balance sheet and P & L, Shop & establishment proof/ VAT Return


8. Repayment capacity of EMI - You have to thing about monthly EMI pay capacity. It should not be more then 45-50% of your net monthly income. so take loan according to your monthly repayment capacity.


9. Tax benefit - If you are taking loan and paying loan then you should know about home loan repayment benefit. as per income Tax law section 80C , you will get max. 1.5 lacs benefit income once on repayment of principle of loan.

10. Don't do repetitive loan inquiry -  If you are applied for loan then please wait till the decision come to you but if you will aggressively do more inquiry from lenders for loans then it will affect your cibil score so be careful & do very limited inquiry.