There is a great emphasis given on making any payments in time be it your monthly EMI for any type of loan or credit card repayment. So what exactly happens when you borrow any loan or use a credit card and make your payments in time is that your credit score goes high making you more eligible to borrow any loan or get a loan at lower rate of interest. It also helps you to avail higher loan amount at the time of financial exigencies. There are great advantages of making prompt repayments; this article is intended to highlight various benefits of making prompt repayments:
Boosts up your credit score
Making prompt repayments will enable you to maintain a good credit score. You must know that even your tiniest re-payment that would include your loan EMIs, your credit card repayments, or any other transaction is recorded and forms the basis of your “Credit History”. Your credit history analysed together forms the basis of your credit score which is a numeric digit that signifies your credit worthiness. Any failure in being able to make any re-payment in time can lead to a bad impact on your credit history thereby lowering your credit score on the other hand if you make repayment in time your credit history will be good and therefore your credit score will be boosted.
Enable quick loan disbursal
Making prompt repayments will ensure a high credit score and that will ascertain that the risk taken by the banker to disburse the loan will be low and therefore your loan will be quickly disbursed.
Borrow Loans at Lower rate of Interests
If you are a regular and reliable customer of the bank you can bargain with the bank on the rate at which bank would lend you to loan as the risk calculated on disbursing the loan is relatively lower.
Prompt repayments can make you better eligible to borrow loans at any point of time. The bank will be able to not just process your loan quickly but also you will be eligible for borrowing higher loan amount compared to others just because you have been making prompt repayments in the past.
Waiver on security deposits
To borrow loans from certain banks you need to deposit security in form of collateral or guarantee. However if you are a customer who makes repayment in time you will be eligible for availing any loan without a collateral or a guarantor.
Waiver on Loan Processing Fee
Making prompt repayments can help you avoid over head charges that are charged as you can bargain with your bank and avail a waiver. Although certain banks offer such deals on their owing to your rich credit history.Main Category: Finance, Loans, Popular Post