CIBIL Score News: If your CIBIL score is low, you may face difficulties in getting a loan in the future. Following the implementation of the new RBI regulations, banks will check several factors before granting loans.
Loans can be expensive for those with low CIBIL scores. Learn the new rules.
Bank Loan News: If your CIBIL score is less than 730, getting a loan may become more difficult in the future. Following the implementation of the RBI's new ECL Directive 2026, banks may exercise greater caution when granting loans.
Banking experts believe that people with low credit scores may face difficulties in getting a loan approved. Even if they do get a loan, the interest rate may be high. In some cases, banks may ask for additional guarantees or even mortgage property. Worryingly, a significant number of people in the country have a CIBIL score below 730. Therefore, those seeking home loans, car loans, or education loans next year may face more difficulties than before.
New rules will come into effect from April 1, 2027!
The RBI's new rules could come into effect on April 1, 2027. Normally, a loan becomes NPA if a customer fails to pay EMIs for 90 days. However, under the new rules, banks will need to anticipate which loans are at risk of future defaults and set aside a certain amount accordingly.
Banking experts believe this change could impact banks' earnings. Reports suggest this could result in an additional burden of up to ₹42,000 crore.
Experts believe that those with a good credit score will likely receive loans at lower interest rates and better terms. This is why banks may prioritize customers with a CIBIL score of 730 or higher. It is estimated that there are approximately 70 million people in the country with a credit score of 730 or higher.
How will banks estimate future risks?
Under the ECL framework, banks will not only consider whether a customer is currently paying EMIs. They will also consider several other factors before granting a loan, such as:
• The customer's past record
• Any changes in their CIBIL score
• Decrease or instability in income
• Risk of job loss
• Loan-to-value (LTV) ratio
• Current loan status
Considering all these factors, banks will assess the risk of a loan default in the future.
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