Does my CIBIL (credit) score affect my rate of interest?


Does my CIBIL (credit) score affect my rate of interest?

Yes, the answer to this is a big “yes”. The better your credit score is, the better the chances of taking advantage of low-interest rates. In addition to that, the importance of an ideal credit score is not only in one spectrum but in multiple. Let’s understand it with the help of an example:- Credit score is not merely considered while obtaining a loan at low-interest rates however, it also is taken notice of when you apply for things like credit cards or loans. Several financial institutions and companies consider your CIBIL score to anticipate your future financial behaviors

The CIBIL score has a significant role in building your creditworthiness thus, it can’t be stressed enough why it is taken into consideration while applying for any type of loan.

My first impression of you as a lender is your CIBIL score, the better your CIBIL score is, the higher the chances are there for your loan being approved or sanctioned. One thing that needs to keep in mind is while the CIBIL score is extremely noteworthy, however, the decision to lend is entirely dependent on the lender and CIBIL does not in any manner decide if the loan/credit card should be sanctioned or not.

The lender may not even consider the loan application further and reject it at that time when your CIBIL Score appears low however, in any manner does not mean that you will not be able to obtain a loan or credit card. Basically, good CIBIL scores help you to get considered by the lender quickly and in the first place. Amongst all the loan applicators if you have a higher credit score then you will take it into consideration first and there is a larger probability of not only obtaining a loan at a low-interest rate but also it will add value to your creditworthiness.


“The credit card company may decide which interest rate to charge you based on your application and your credit history,” ​​the CFPB explains. “Credit card companies typically offer their best rates to customers who have the highest credit scores.

How high CIBIL score can have an impact on the interest rates? As mentioned above, high CIBIL scores will enable you to get a loan easily at propitious terms and conditions with lower interest rates.

Furthermore, you can also check your CIBIL  report which will give you details on your credit history. This will give you a better picture of any outstanding loan or credit card accounts.

How low CIBIL score can have an impact on the loan interest rates?

A low CIBIL credit score can prevent you from getting a loan as banks will either reject your application or offer you a loan with a high rate of interest. In case you fall under the low CIBIL score category it is advisable that you do not apply for a loan. A rejection will further downgrade your CIBIL credit score.

Benefits of home loan
Home Loan

What is a Plot Loan?

What is a Plot Loan? So, what is a plot loan? Is it the same as a home loan? Actually, a plot loan is another

Read More »
× Chat with us