In recent years, there has been a significant rise in the number of women entrepreneurs across the country. In order to further encourage women entrepreneurs, the Indian Government has introduced several schemes such as Annapurna scheme, Udyogini scheme, Mudra yojana scheme, etc. to support them financially. Apart from this, women entrepreneurs can also consider availing small business loans for their startup. Nowadays, with the help of leading financial institutions, availing a small business loan has become a quick and hassle-free process. However, before applying for a small business loan, women entrepreneurs should make sure that they have a high credit score. Let us understand what is CIBIL score and significance of building CIBIL score before applying for a loan.
CIBIL Score is a numeric value that ranges between 300-900. Your credit score reflects your creditworthiness and repayment capacity. The higher your credit score, the better are your chances of loan approval.
Financial institutions check the credit score before approving the loan application. Therefore, women with a good credit score, will be eligible for a higher loan amount. Moreover, they will also be able negotiate on the interest rate offered by the lender if they have a high credit score. On the other hand, a poor credit history affects the chances of the loan approval. This is because lenders consider an applicant with a poor credit score as a high-risk applicant
Since the credit score is a vital factor that decides the loan eligibility, it is important for women entrepreneurs to maintain a high credit score by making timely repayments and clearing outstanding dues. Women entrepreneurs can boost their credit score significantly by improving the spending habits and managing their finances wisely.
Therefore, if you are a women entrepreneur, you must try to improve your credit score before applying for a loan. Mentioned below are some of tips that can help you improve your credit score over a period of time:
It is essential that you make timely repayments to keep your credit score impact. Defaulting on a loan can not only put you in a debt trap but also damage your credit score significantly. This can further decrease your eligibility for availing credit in the future
Make sure that you use your credit cards wisely. This is because credit cards usually have a higher interest rate associated with them and failing to repay the amount within stipulated time can cause debt trap. Also, try to keep your credit utilization ratio below 15%. This will help you improve your credit score
Make sure that your credit report is accurate and updated. If you happen to spot any kind of error on your credit report, it is essential that you ask the credit reporting agencies to dispute it. This can be helpful in improving your business credit score. In addition to that, you must try to avoid hard inquiries and unpaid accounts as they negatively affect your credit report.
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By making the most of the above-mentioned suggestions, you can boost your credit score significantly over a period of time. A high credit score will allow you to avail a loan with a competitive interest rate and other lucrative features. Be it a business loan, a personal loan, education loan, etc. a good credit score will always help you avail the best deal for yourself. With leading financial institutions, you can easily avail any kind of credit product online from the comfort of your home. Minimal and paperless documentation are some of the added advantages of availing loan from a prominent lending institution.
A high CIBIL score for women can help women entrepreneurs avail a small business loan with most favourable terms and conditions. In addition to that, women who wish to avail a personal loan for travel, medical emergencies, or managing wedding expenses, etc. a high credit score can come in extremely handy.
While availing a business loan or any other credit product, it is recommended to compare various loan offers provided by different financial institutions. This will help you avail a loan that best suits your needs. Business loans available at Finserv MARKETS come with a competitive interest rate and other lucrative features such as less processing fees, flexible repayment tenure, simple eligibility criteria, and no hidden charges. Moreover, instant approval and quick disbursal of the loan amount are some of the added advantages of availing a loan with Finserv MARKETS. Borrowers can also customize their loans according to their requirements. All these features have made business loans available at Finserv MARKETS one of the most preferred financing options for small startups. Moreover, women entrepreneurs can avail unsecured business loans on Finserv MARKETS. Therefore, they are not required to pledge any collateral while availing a business loan. This has further added to the popularity of business loans available at Finserv MARKETS.
It is advisable that you must calculate your EMIs prior to availing a business loan. This will help you plan your monthly budget wisely, thereby allowing you to make timely repayment of your business loan. Moreover, you must calculate your loan eligibility before applying for a loan. This will reduce the rejection chances of your loan application. Since rejection of a loan application can hamper the credit score significantly, it is essential to calculate the loan eligibility beforehand. Before availing a business loan, you can also calculate your EMI with the help of an online business calculator. This will help you plan your repayment strategy wisely. Understanding the nuances related to CIBIL score can help you make the right decision while availing a loan. Once you have availed a loan, your prime responsibility should be its timely repayment. This will help you keep your credit score intact.
Make sure that you settle for a loan with the most competitive interest rate. This will help you reduce the overall cost of borrowing as you can save a large amount of money towards the interest payment. Lastly, make sure to read the terms and conditions of the loan agreement carefully before signing it. This can help you avoid any inconvenience in the later stage. In case of any query, you must consult a financial advisor before making a final decision.
Also read how much time to improve CIBIL Score
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