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You’ve got a business idea and you need funding. You meticulously plan it out on paper, and decide that the flexibility of an ICICI Bank personal loan is exactly what you need. Confidently you stride to the bank, after long hard weeks of business planning, to get that loan approved. The smiling bank-executive takes your details and enters them in his system. Your age matches the requirement, you have the right income to be able to pay back the amount you’ve requested at the bank’s rate of interest and your business plan is also financially sound. But the bank rejects your loan application despite you checking off all the boxes on all aspects of eligibility criteria. What could’ve gone wrong? Your CIBIL score.
CIBIL is the Credit Information Bureau of India Ltd. It is India’s first credit information company and is also called the ‘Credit Bureau’. CIBIL collects, analyses and maintains the credit history of individuals (and legal entities), making it available to banks and other financial institutions upon request. Your credit history consists of all the details of your dealings with banks and other financial institutions in terms of your ability and capacity to repay outstanding balances.
It takes into account factors like:
All these factors and more details are provided by lenders and compiled, collated, analysed, and evaluated. Eventually, a conclusion is drawn about your ability to repay outstanding balances. This conclusion is your CIBIL TransUnion Credit Score.
Banks and financial institutions place themselves at the risk of you defaulting on payments when they extend credit in your direction. Especially in the case of unsecured ICICI Bank personal loans, this credit rating is all that ICICI Bank has to look at to take a call on whether you can be trusted to repay the loan or not. For ICICI Bank to approve your loan quicker, ensure your score is closer to 900. If it is lower than 700, there are higher chances of your application being rejected.
ICICI Bank, like many other banks, accept scores above 700; meaning the party taking the loan has the ability and interest to honour payments. More recently, ICICI and other banks have revised their requirements to 750 as the minimum score to approve personal loans.
It is important to note that, sometimes, even if you have an excellent CIBIL TransUnion score (>750), ICICI bank may reject your personal loan application. This could happen because CIBIL Credit Reports have provisions for comments against your borrowing history.
Bank representatives sometimes give you the option to reach a “settlement” with the bank if you are unable to repay the full amount. This means that your loan has not been “repaid in full” and is considered a negative remark in your report. Banks can view this and deny your loan for poor repayment capacity.
Your loan could also be rejected if:
To successfully take out an ICICI Bank personal loan, the bank recommends that you maintain a decent CIBIL TransUnion credit score by:
Maintaining a good credit score is crucial to be able to manage your finances properly. Simple acts like planning payments on time, having securities in case you are unable to pay, maintaining good relations with banks, etc. can go a long way and play a crucial role when the time comes to take out that huge loan and start something big.
|As explained above, is your CIBIL score good? Now, apply for the ICICI Bank Personal Loan|
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The consolidated net profit for the topmost private bank in the country has slipped by a whopping 87 per cent owing to bad loans. After deduction of tax, ICICI posted a net profit of Rs. 3084 Crore in the last fiscal and it tanked to Rs. 701.89 Crore in the current fiscal.
The profit for the current quarter went towards collective contingency and reserves meant to hedge the losses made as a result of bad loans. ICICI Direct which is the securities division of the bank, recently announced the availability of CIBIL Transunion score and credit information reports on the ICICIDirect website for registered customers. This will, however, be a subscription-based facility for which a nominal fee will be charged.
4 May 2016