5 Ways to Apply for a Personal Loan if you Receive your Salary in Cash

Have you ever wondered how your lender decides whether to give you credit or not when you apply for an instant personal loan ? One of the tools your lender uses is your credit report to determine your credit history and assess your repayment capacity. Hence, based on your credit score your lender will be able to assess the risk of lending you money.

To help improve your credit behaviour and get easy access to funds, it is advisable to know more about the credit report. In this article, let us discuss more about some credit-related terms, which may be unfamiliar to you:

  • CIBIL Score – The first thing you find in your credit report is your CIBIL score, which is a numerical representation of your credit history.

    The score ranges from 300-900. 300 is considered the lowest credit score and 900 as the highest credit score.
    Your credit score is based on the ‘Accounts’ and ‘Enquiry’ portion of the CIBIL report.
    Instead of a three-digit number, if you see ‘NH’ or ‘NA’, this means that you do not have a credit history or don’t have enough of credit history to generate a score.

  • Personal Information – Your personal details such as name, date of birth and gender will be included in this section. This section also lists information related to your Tax ID/PAN, passport number, voter’s ID and driving license. Credit Reference Agencies (CRA’s) such as TransUnion CIBIL collects and consolidates your personal information.
  • Contact Information – Details such as your phone number, mobile number, residence and email address are included in this section.
  • Employment Information – Information related to your job profile and income are available in this section.
  • Account Information – This section provides details concerning your credit cards and loans. Additional details such as the name of your lender, type of credit applied (single/joint), loan amount, date of your last payment, your outstanding amount etc., are included in this section. Here, you can find any credit-related information for the past three years.
  • Enquiry Information – This section provides information on the number of enquiries you have made for credit. You can also get information such as the name of your lender, date of the credit application, amount of credit and type of loan you have applied for.

    There are six additional frequently used terms in your credit report. So it is advisable to have before-hand information concerning them.

  • Cash limit – The limit of cash you are allowed to withdraw from your credit card.
    CN (Control Number) – Whenever you want to file a dispute, you can report your control number as your report number.
  • DPD (Days Past Due) – DPD provides information on the number of additional days you have gone past your payment deadline. Anything apart from ‘000’ or ‘STD’ is viewed as negative and if ‘XXX’ is mentioned, then this indicates that your lender has not provided any information to CIBIL.
  • High credit – This provides information on the highest billed amount which includes fees and interest on your credit card or overdraft.
  • Ownership – You can either apply for credit by yourself or get in conjunction with another applicant or a guarantor.
  • Settlement amount – If you are disputing with your lender on a loan amount based on what your lender says you owe and what you think you must pay, your lender will decide on the settlement amount that you both agree upon. After you reach an agreement, then the amount is reflected here and the remaining is written off.

Hence, it is highly recommended to read your CIBIL report before applying for a personal loan. This way, you can improve your credit score and rectify any discrepancies.