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CIBIL Score: Canara Bank Personal Loan

Personal loan is an unsecured loan and hence high risk loan. Canara Bank, like all other banks and financial institutions provide an array of personal loans which are multi-purpose loans and serve immediate monetary requirements. This loan requires easy documentation with long tenure. Canara Bank personal loan comes with highly competitive rate and the potential borrower has to pay close attention to the eligibility factors to be able to avail these loans.

The credit score is one of the few most important things that determine whether a person is eligible for personal loan at all, and in case of eligible borrowers, the terms and conditions along with the loan amount is highly influenced by the CIBIL score that indicates the credit rating of the borrower.

Importance of CIBIL Score for Getting Canara Bank Personal Loan

CIBIL Score captures the financial behaviour of the person. All the past credit history, handling of credit cards, and payment of loans – all these are tracked and based on those, the CIBIL score is assigned. CIBIL score plays the most important role to determine the eligibility for getting Canara Bank personal loan. Since personal loan is unsecured loan, there is no asset pledged to take the loan. So it is very important to have a good CIBIL score to get a personal loan with reasonable terms and conditions. Canara Bank will check the CIBIL score while processing the loan application. A higher CIBIL score improves the possibility of loan approval. The minimum score that Canara Bank needs is 650 for being eligible for the personal loan. Certain factors affect the credit score, and these are:

Late in paying the loan – If loan payments in the past were delayed then that will affect the CIBIL score negatively
Number of loans that are unsecured – High number of this type of loans affect the score adversely
Application of multiple personal loans in different banks has negative impact on CIBIL score
Using the credit limit – If the usage pattern of credit cards indicate frequent withdrawals, exceeding the credit limits often, then it indicates the financial distress and financial mismanagement

Canara Bank Personal Loan Information

Type of Loans: Canara Budget Personal Loan, Canara Bank’s Teachers’ Personal Loan, Consumers Personal Loan
Age Limit: Minimum 21 Years, Maximum 60 Years
Nationality: Indian
Loan Amount: Minimum 1 lakh, Maximum 3 Lakhs
Employment Status: At least 2 years of work and at least 1 year with current employment (For salaried and self –employed)
Loan Processing Fee: Up to 0.50% (One time) of the loan amount
Interest Rate: 13.99% to 16.99%
Loan Tenure: Minimum 6 months, Maximum 60 months
Prepayment charges are nil for Canara Bank

Documents Required:
- Loan Application, duly filled
- Passport-size Photos – 3
- Residence Proof
- Identity Proof
- Bank passbook or statement for most recent 6 months
- IT Return: 2 years for salaried and 3 years for self-employed

Payment options of Canara Bank Personal Loan
- Electronic Clearing Service (ECS) – This could be used to pay EMI from a non-Canara bank account
- Post-dated cheques could be submitted to the loan centre for EMI payments. This option is valid where ECS is not available
- Standing Instructions (SI) – In case EMI is to be paid from the Canara Bank account, a standing instruction works best. Automatically EMI will be paid from the savings account towards loan payment every month

Probable Reasons for Canara Bank Personal Loan Rejection

Like every other bank, Canara Bank also has its criteria for personal loan rejection. The probable reasons could be:

Low Credit Score – Creditworthiness of a potential borrower is measured by the CIBIL score. If personal finances are not managed properly, the credit score goes down. A poor credit rating indicates higher chance of loan rejection. A credit score below 650 might increase the chance of loan rejection

Employment Requirement – Canara Bank exclusively provides loans to certain professionals like Doctors, employees of PSU including state, central and local governments, chartered accountants and private sector employees. Loan application with other types of employment might get rejected. If the private company is not in the list of Canara Bank, the personal loan might get rejected

Not Enough Income – The minimum income criteria for Canara Bank is set to 15,000 rupees. Any borrower with income below that will get rejected. Also net income is based on location. In metropolitan cities, minimum income is higher

Instability of Employment Status – Frequent job switching impacts the creditworthiness. If the current employment is less than 1 year, the chance of personal loan rejection is high

Age Factor – Loan will be rejected if the age of the applicant is not within the range of 21 years and 60 years

Frequent Application for Personal Loan – If someone applies for personal loan frequently, then it indicates that the person lives on credit, which makes the person a risky borrower.

Hence, personal loan application of this type of candidates has higher chance of rejection

For loan application, all the relevant documents need to be submitted. In case of insufficient documents, application gets rejected. In case of verified documents, if the candidate does not qualify, Canara Bank rejects the personal loan application which gets reflected in the credit score. It is to note that too many rejections have a negative impact on the credit score.

Tips for improving CIBIL score to get Canara Bank personal loan

Making regular and timely payment of the loan instalments without missing any payment – Timely payment without miss-out or without default interprets the good creditworthiness of the borrower. This improves CIBIL score

Avoid applying for multiple loans within a short period of time – Applying too many loans in a short time span shows the desperation for money which affects the credit score negatively. Also multiple loan application has higher chance of rejection, pulling the score further down

Limiting the credit usage – It is a good idea to use not more than 50% of the credit limit of the credit cards. Exhausting the credit limit indicates that the person is not careful about spending, which affects credit score adversely

Taking loans with longer tenure – Loans with longer tenure needs lower EMI which is easy for the borrower and less change of default

Prepayment of the existing loans – This interprets better financial condition of the borrower and hence reflects positively on the CIBIL score

Having a good balance of secured and unsecured loans – Right balance of secured and unsecured loans interprets a healthy credit report

Obtaining credit report and checking if any error is there – Reporting errors might impact the credit score adversely. In such cases, pointing out the errors to credit bureau and getting corrected can improve the score

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FAQs On CIBIL score for Canara Bank personal loan

What are the Personal loan rates for Canara Bank?

The rates are 13% to 14% with latest floating rate on 3rd November is 12.75%

What is the Eligibility criteria for getting bank personal loan in Canara Bank?

Age between 21 and 60 years
Good CIBIL score – 750 being the perfect score, Canara Bank processes personal loan applications with minimum score of 650
Income should be minimum of 15000 per month. The fixed obligations to net income ratio should remain within specified limit
Minimum employment duration is two years for salaried and 3 years for self-employed
Employer of the applicant has to be reputed. All PSUs and well-established companies are enlisted as preferred employers
Job stability -- Past one year should be in the same job. For pension holders, there should be steady monthly pension
Good relationship with Canara bank ensures better eligibility of personal loan
An earning co-applicant increases eligibility sine this assures better payment possibility

What if I have a low CIBIL score, will Canara bank still give me a personal loan?

Lower CIBIL score indicates poor or unstable credit history. In such cases the possibility of loan rejection by Canara bank is higher

Does skipping Canara bank personal loan payment affect my CIBIL score?

If a payment is skipped, it creates a negative impact on the credit score.

Had a loan settlement with Canara bank, will it affect my CIBIL score?

Loan settlement means paying off less than the outstanding loan amount and bank will report it as ‘Settled’. It has a very negative impact on the CIBIL score.

Can I get more than 3 Canara bank personal loans if I have a good CIBIL score?

Canara Bank considers a top up second loan with the existing personal loan provided good payment history has been established for the first personal loan. The rate will be similar to the existing one. However, more than two loans is not common as too many loan applications indicate financial insolvency and indicates a risky borrower.

Is it required to be an existing customer to avail personal loan from Canara Bank?

Yes, only existing account holders of Canara bank are allowed to avail a personal loan.

How to get Canara Bank Personal Loan quickly?

Check the eligibility criteria and all the documentation needed. Loan could be approved quickly if the person meets all eligibility requirements satisfactorily