Business News Desk, There are many people who take CIBIL score lightly. People do not understand that it can be spoiled by your small mistakes. The mistake of spoiling the CIBIL score can cost you very heavily. If your CIBIL score is bad, then you may have to suffer a loss of Rs 19 lakh on a home loan of just Rs 50 lakh. That is why it is said that the CIBIL score should be kept good and it should not be allowed to deteriorate. Let us know the calculation of the loss of Rs 19 lakh.
How much interest on a CIBIL score of 820?
Suppose your CIBIL score is 820 and you take a home loan of Rs 50 lakh for a period of 20 years, which you will get at a rate of about 8.35 percent. In this way, you will pay a total of Rs 1.03 crore including interest of about 53 lakh in 20 years.
If your score is 580, you will have to pay Rs 19 lakh more!
On the other hand, if your CIBIL score is very low, say 580, then you will get the same loan at a rate of about 10.75 percent. In this way, you will have to pay interest of Rs 71.82 lakh, which is about Rs 18.82 lakh more than before. That means you can lose more than one-third of your total loan just because your CIBIL score is not good.
First know what is CIBIL score?
This is a three digit number or say a score. Its range is from 300 to 900 points. It shows your eligibility to take a loan. This number is decided on the basis of your old loan, credit card bills etc. If you keep paying all your loans and card bills then your CIBIL score keeps improving, whereas if you default then your CIBIL score keeps deteriorating.
What are the benefits of a good CIBIL score
If your CIBIL score is good then it has many benefits. Every bank checks the CIBIL score of a person before giving a loan. In such a case, you can get a loan easily and cheaply. Many times you can even get a pre-approved loan offer and you can also get the facility of instant loan i.e. money coming into the account within a few minutes.
5 disadvantages of having a bad CIBIL score
If the CIBIL score is bad, then you have to bear its loss too. You have to face problems in all the bank related work. Let us know the 5 disadvantages of a bad CIBIL score, which will have a big impact on you.
There will be problem in getting loan
If your CIBIL score is bad, you will have trouble getting a loan from any bank, small finance bank or NBFC. Banks fear that your CIBIL score is bad, meaning you may default.
will have to pay higher interest rate
Even if some banks agree to give you a loan despite a poor CIBIL score, they will charge a higher interest rate. Actually, they try to manage their risk. They think that even if the person defaults on the last few EMIs, the bank should not incur any loss, so the interest rate is kept high.
You may have to pay higher premium
Many times insurance companies can also demand a higher premium from you if your CIBIL score is poor. Actually, in such a situation, insurance companies feel that you can make more claims, so they can demand a higher premium. Many companies can even refuse to give insurance.
Difficulty in getting home-car loan
Just like a personal loan, you may face problems in getting a home loan or a car loan. You may even have to pay higher interest. There are also problems in getting a property on lease for business. The company may also ask you to mortgage something in exchange for giving you a loan.
