It’s a known fact that the status of your personal loan depends mainly on your CIBIL report—a decent credit history can increase your chances of availing a personal loan. As per a study conducted by the Credit Information Bureau of India Limited (CIBIL), more than 80% of loans are sanctioned to those individuals who had maintained a CIBIL score of above 750. For building an impressive CIBIL score, one must have an understanding of its core areas. The most important section of your CIBIL report is the ‘Accounts’ section, which reveals your current and previous loan statuses. The section lists out details of the lending organization, type of loan applied, account numbers, and most importantly, it displays the status of the account namely closed, settled, and written off. Banks while offering you a personal loan will look into such details and decide whether to approve or reject the loan application. You can check the status of your loan application by visiting the bank’s website.
The ‘Accounts’ section of the CIBIL report clearly mentions the status of a loan. Explained below are the common statuses that appear in the CIBIL report:
Closed status: If the ‘Closed’ column in the accounts section of CIBIL report displays the date of closure, then it means that you have repaid the loan amount completely. So once you have repaid the loan, make sure that you obtain a No Objection Certificate from the lender and request them to report your CIBIL status as ‘Closed’.
Settled status: If the borrowed amount is partly paid by you and the loan is settled after a discussion with the lender, then your account status in the CIBIL report will show as ‘Settled’. In this case, the total amount paid is lesser than the original sum borrowed and the lender decides to settle the loan based on borrower’s request. Banks are likely to consider a ‘Settled’ status in your CIBIL report as a negative remark. However, the reviewing policy of every lender differs from one another and the decision on approving a loan purely lies with the concerned lending institution.
Written-off status: When the borrower fails to make payments towards the loan for more than 6 months, the bank then reports the loan status as ‘Written-Off’. This clearly leaves a negative impact on all your future loan applications, as financial institutions hesitate to provide loans to defaulters.
Tracking your loan status
Most banks provide an online status checker for borrowers to stay updated with their current loan status. You just have to fill in some relevant information such as Name, Proposal Number, and Date of Birth to view the status of your personal loan. The feature is available for most of the loan products including car loans, home loans, commercial loans, etc. With the online facility, customers will get a real time update on their file without having to visit the bank in person.