Personal loan to boost credit score

5 reasons to take an Instant personal loan and boost your credit score

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Credit has become an indispensable part of the common man’s finances. The world economic order is such that owning assets without credit in some form has become impossible. When faced with fiscal deficits, it is best to look for a personal loan. If you are looking for an instant personal loan, Qbera can be your best solution!

What are Instant Personal Loans?

Instant Personal loans are unsecured loans that can be availed for any kind of financial need. Being unsecured, these loans can be availed without putting any kind of asset on the line. These are highly flexible loans that can be used to finance any kind of deficit. Funds shortage during marriage arrangements or home renovations can be easily managed with these loans. However, its scope is not limited to just those areas; you can use it to fund your education, consolidate debts or even to plan an exotic vacation.

What is the importance of a credit score?

With the increase in popularity of loans and especially personal loans, the importance of credit scores has also gone up. When giving out unsecured loans, a lender will like to know exactly how you have managed your previous loans and how much trust they can put on you. The credibility of an individual gains more importance when a personal loan is given out.

What are the factors that affect a credit score?

Your credit score is calculated based on these 5 points

  • Repayment history- This forms the most major chunk of the score and a weightage of 35% is assigned to it.
  • Credit Utilization Ratio- This is the second most important factor with 30% weightage. This is the ratio of the amount of credit you’ve used against your total available credit limit.
  • Length of credit history- The length of time you have spent with credit and the way you have been managing the same forms 15% of the score
  • New credit requests- When you apply for new credit, it is viewed as a risk and 10% weightage is assigned to it. More the number of new credits you apply for, more the impact on your credit score.
  • Credit Mix- the mix of secured and unsecured loan availed by you is also considered and carries 10% weightage.

How an Instant Personal Loan can help boost credit score?

Low credit scores have been linked to the rejection of loan application as well as high-interest rate being charged by lenders. So, it is best to keep these scores as high as possible to enjoy faster application processing as well as enviable interest rates. In case you find that your credit score is less, there are some remedial measures that can be taken.

One of the popular remedial measures is opting for an instant loan. These are considered as installment loans that have set balances and repayment tenures also, they do not have a negative impact on your credit score. Simply availing a personal loan is not enough, as in order for it to make an impact, the borrower has to make timely payments and also maintain low credit utilization levels. Your credit score will improve over a time-period if you continue making timely payments and do not access any more credit.

This also helps create a healthy mix of secured and unsecured loans thereby having a positive influence on the credit score. Also, a personal loan can be availed to consolidate different kinds of credit card debts under a single one. This will definitely help bring down the vicious cycle of cyclic debt and boost credit rating over a period of time. Also, take care to choose a lower interest rate and a longer repayment tenure that you can comfortably accommodate in your monthly budget.

With careful planning, a personal loan can easily boost your credit scores. However, do make sure that you do not run up new credits on your credit card or avail more loans. Also, diligently make the EMI payments.

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