How people become defaulters even after paying the full amount?
People bring their cibil score down or earn a low cibil score even after paying the full amount because they do not follow the exact repayment tenure or schedule in the sense they do not pay the loan installments on time given to them .but that does not mean people with a low credit rating will also be a willful defaulter.They come under defaulter list due to negligence or lack of knowledge about cibil score.Thus they face lots of problem in getting another loan approval with a bad cibil score in future.
Types of loan defaults people make in terms of loan!factors affecting cibil score
- Sometimes people drop an instalment cheque on due date with the view that it would get cleared on the same date but cheque other than the same bank takes 24 hr-72 hr for clearance which hampers the cibil rating.
- People also come under the defaulter list when they give a post-dated cheque for loan instalments without the awareness that his account has insufficient funds to honour the cheque the cheque and thus check get bounced.
- Sometimes due to illness or hospitalization for a long period.A person comes under financial distress which makes him unable to manage funds in order to pay the instalments.
- In some cases due to loss of job a person is not able to make a payment on the due time to lack of sufficient funds.
- Some people willingly make default with the notion if he changes job or places nobody will be able to trace him thus they hamper the cibil score and became the defaulter.These kind of people are unaware of the fact that changing a place, job or address does not change the identity of the person
- Some people out of the negligence willing to pay a late payments charges as they are never worried to make the payment on time
Cibil score default stands no chance to get loan approval.So it is important to repay any kind of loan on time.
Why cibil score important?
Cibil score is a three digit number starts from 0 -900 as per RBI guidelines a person is eligible to get a loan only with a good cibil score, therefore, higher cibil rating points towards good cibil record and thus increases the chances of getting a loan at a higher side.Sometimes the individual or the institution avail the opportunity of getting a low rate of interest against the loan applied for from the bank due to good cibil score.Now whereas a person with a bad cibil score faces many hindrances to get the loan approved.