Keep A Good Credit Score For Availing Business Loans

Mumbai, January 7: The power of good credit score cannot be undermined. It can instead turn your proposal for business loan into a great deal. Business loans cater to all kinds of business needs. This includes self-employed professionals, retailers, sole proprietorship, private limited companies or firms, which are into partnership. A business loan can be secured and unsecured, or can be for long or short term. Many banks and Non-Banking Financial Companies (NBFCs) in India provide business loans to support your growing business or for starting a new one. How much business loan an individual is eligible for varies from bank to bank. 

The most imporatnt loan eligibility criteria is a good credit score. The Credit Information Bureau (India) Ltd (CIBIL) score ranges between 300 to 900 for a borrower. The closer your CIBIL score number to 900 the better it is. This is based on the credit history of the borrower. Although the business loan is extended on the basis of your personal rapport and relationship with the lender, your credit score acts as a key catalyst when it comes to the smooth process of your loan application.  When it comes to the long-term business loans worth a large amount with a payback tenure of about 6 to 7 years, the need for CIBIL score gets stronger.

Timely payment of the loan EMIs is also very important in maintaining a good credit score. This would not only increase the trust of the lenders but would put you in a better position to raise higher loans in the future. Credit score awareness will help you to take advantage of lender’s offers such as lower interest rates.