Credit Score is the primary factor by which banks decide whether you are a loyal customer and not a payment defaulter. It is calculated on your previous bank history and your relationship with financial institutions and lenders. A bad credit score will only bring problems, and it is utmost necessary to improve it. But how should I do it?
Well, Personal loans could act as a factor in improving your credit score. It may sound surprising that when my credit score is low, how can I get a personal loan. Well, a co-applicant or guarantor can help you to get the best personal loan rates by which you can pay your consolidated funds and ultimately improve the credit score.
Why My Credit Score Is Low
You may be wondering why your credit score is low. There are various factors on which a credit score is measured. If a loan EMI is not paid on time or credit card bill is due for months, sets your score to low. Even if you miss a single EMI, it can have a significant impact on the credit score.
What is the Benefit of Personal Loan?
Unlike other loans, Personal loan is an unsecured loan that does not require any collateral. One can use it for any purpose. Most of the people take vacation loan (Personal Loan for vacation) to visit their dream destination, while others opt for small personal loans for basic requirements like a home renovation to or assist in relative’s wedding. Small companies may apply for a personal loan to grab the opportunity for discounted products.
But in our case it is different, we want to improve our credit score, and it can be achieved only by paying left-off EMI’s, credit payments and medical bills with low personal loan rates.
Consolidate Debt: If you have a number of due EMI’s in various banks, then a single personal loan can regularize them, and you can save yourself from debt as well as grow your credit score.
Credit Card Payments: Credit Cards comes at a high rate of interest, and with a secured personal loan you can get the amount of low interest, so you save from two sides i.e., paying your credit card infinite terms and building your score.
Pay Off Medical Bills: Insurance companies may trick you for high payments when the withdraw limit exceeds, thus a small amount of money from personal loans to pay outstanding balances will help you out.
How to Apply for A Personal Loan?
Most of the Bank provides personal loan online application facility, and there are many other portals which offer you to compare the loans from various banks and get the best personal loan at a low-interest rate.
Understanding the valuable time of consumers, banks and lenders have personal loan calculator facility through which customers can check the total interest and amount paid by entering the principal amount, loan tenure and fixed rate of interest.
These tips will help you out to take a personal loan at low interest and settle the agreement between you and banks with pending EMI’s. However, one should act responsibly and pay EMI on time to improve credit score.