A Better credit score is expected to provide a borrower cheaper loans

By | August 15, 2011

A recent press report said that the most banks have set up thorough systems, including reports from credit information bureaus in order to determine the repayment capacity of a borrower. The system has been set up due to the solid rise in bad loans during the last few months.

Reports said that borrowers with a cleaner track record will get loans at lower interest rates.  Mr. Anand Selva, head, consumer bank, Citi India said that the bank has decided to offer flexible interest rates to customers with long-term relationships and strong credit history.

Reports also said that the consumers can purchase their credit scores directly from firms such as Credit Information Bureau of India Ltd (CIBIL) to know their specific “credit score.” It also said that Indian Bank has offered to charge lower interest rates from those who opt for “combo” loans that bundle personal loan along with credit for a house and car.

Mr. Arun Thukral, Managing Director, Credit Information Bureau of India Ltd, said that the credit score will facilitate in making the lending process more transparent, inculcating financial discipline and enhancing consumer awareness on credit information.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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