Credit Line

The Reserve Bank of India have licensed 4 companies for checking credit score : The Credit Information Bureau (India) Limited (CIBIL) Experian Equifax Highmark

The credit scores range from 300 to 900. Traditionally, individuals with credit score with 624 or bellow have bad credit. Credit score of 625 to 699 are labelled fair, not all the financial institution accept cases between these score considering the risk of repayment high. Credit score of 700 to 749 are labelled as good. Only 10%-15% of lenders do not accept the cases considering the reason of non-repayment if any or in case no loan taken ever Credit score of 750 to 900 are labelled as excellent every financial institution want this score as the borrower has never missed any repayment.

Secured Loans: If you have a property or an expensive car or a house or any other major asset, then you can use it as a collateral for a loan. This will give you the option to take a secured loan. Secured loans are given at lower rates compared to personal loans. Sometimes, when you need a large amount, this will be the only option left with you. But you should always make your repayments on time or you might have to part from your asset. If you think you will have even a little difficulty in making repayments, then you should never give your home as collateral. You should take into account various factors before you convert you unsecured loan to a secured loan, particularly if you have a history of bad credit. You may get attractive interest rates, but if you default on your repayments, then you will surely lose your asset. Unsecured loans: Unsecured loans are given to borrowers on the basis of their creditworthiness. A borrower doesn’t have to have collateral. But, your credit score must be high to get an unsecured loan. Such a loan is not backed up by any property or asset. The interest will be fixed and must be paid at the end of a specific time period. To get an unsecured loan, you should maintain a high credit score. You must make all the payments, principal as well as interest, on time and without a single default.

In India, if you maintain a fixed deposit account with your bank, they will offer a loan up to the amount in fixed deposit account maintained with them. You can also get a credit card on your fixed deposit amount. Although, you might have to live with a lower cash withdrawal limit, it will still take care of your immediate cash requirement. But make sure you never cross the limit given by your banker. Indians love to save. If you have deposited a certain amount in some bank, break the deposit and use the money, it is still better than getting into debt. Try to keep away from debt as much as you can. It’s always better to figure out a way to manage your expenses. You won’t really need to take a loan at certain times. Some things are not worth the headache of a loan. Besides there is absolutely no reason to a Secured Loan. It might seem a good option at the time but seeing your car, house or property is not worth the loan you took. It’s always a trap and banks won’t care whether you become homeless, all they care is about their money. If need be, you can always ask your friends and family to help you out. They will be more caring and would not take advantage of your bad vulnerable situation.