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CIBIL Score: Union Bank Personal Loan

Personal loan is the quickest solution for the urgent need of cash. The need could be for marriage, travel, purchase of certain high budget personal items or sudden medical or other emergencies. Union Bank offers personal loan for all these purposes. However, the eligibility criteria need to be met for these types of high risk loans and Union Bank follows the stringent guideline to determine eligibility before approving any personal loan.

The most important eligibility criterion is the CIBIL score. It is the credit score of the customer that indicates the borrowing pattern, spending habits, personal finance management and overall creditworthiness of the borrower. A good CIBIL score of 700 - 750 and above gives higher chance of Union Bank Personal loan approval while a lower credit score might pose a negative impact on the credit behaviour and reduce the chance of availing personal loan from Union Bank.

Importance of CIBIL score for getting Union Bank personal loan

CIBIL Score is developed based on the diverse financial aspects of the person. CIBIL score captures both short term and long term financial activities and behaviour of the person. While approving a personal loan, Union Bank puts high emphasis on CIBIL score. Following parameters affect the loan decision by the bank.

Past history of loan payment pattern influences the CIBIL score. Late payments, missed payments and payment defaults weigh heavily on the credit score. Union Bank monitors the CIBIL score very closely to ensure the highest possibility of timely loan payment

Number of unsecured loans taken indicates the borrowing pattern of the customer. Too many unsecured loans show more need for money and risky financial behaviour which lowers the CIBIL score

Credit limit usage affects credit score. It is better if no more than 50% of the credit limit is used. Using the highest credit limit, frequent withdrawal of cash indicates the financial stress of the borrower and impacts credit score negatively

Applying multiple loans within short period of time affects CIBIL score adversely. In case those loans are rejected, then the score is further reduced

Union Bank Personal Loan Information

Union Bank of India is one of the largest nationalised banks in India and offers personal loans to diverse group of customers for their diverse needs like home improvement, travel, wedding, education or medical treatment. It offers certain advantages like:

No collateral is required for the personal loan
Lower interest rate
Income requirement is minimum
Long tenure
Less paperwork

EOther important points of Union Bank Personal loan include:

Loan Tenure – 12 to 60 months
Loan Amount – Maximum of 10 Lakhs
Interest Rate – 14.4% for salaried and self-employed; 12.9% for pensioners
Processing Fee – Higher of: 0.5% of the loan amount or 500 Rupees. This is a one-time fee
Pre-payment charges – Prepayment is allowed after 12 instalments of EMI. Pre-payment charges are applicable
2 Guarantee required

Documents required for Union Bank Personal Loan

Signed and duly filled Loan Application form (This could be downloaded from: www.unionbankofindia.co.in
3 Passport size photographs
Identity Proof: Driving License/ Voter ID Card/ Passport copy/ PAN Card
Address Proof: Telephone Bill/ Electricity Bill/ Aadhar Card
Cheque for processing fee
Bank statement for most recent three months OR Bank passbook for most recent 6 months
Income Proof for Salaried person: (1) Most recent (last 3 months) salary slip and (2) Up to date salary certificate with latest Form 16
Income Proof for Self-employed: (1) Most recent bank statement and (2) Latest Form 16 or ITR
Proof of out-goes, if any. For example, Loan repayment statement (if applicable), LIC Policies and other valid proofs

EMI Payment Options

Standard Instruction (SI) – An existing Union Bank account holder can set up a standing instruction so that EMI on the personal loan will be auto-debited from the specified account as and when it is due
Electronic Clearing Services (ECS) – In case there is no account with Union Bank, then the payment could be done from any other bank account through net banking using ECS facility
Post-dated cheques from a non-Union Bank could be submitted in advance and periodically to the Union Bank branch where the loan has been taken. This method is applicable only at non-ECS locations

Probable reasons for Union Bank personal loan rejection

Any one or the combination of two or more reasons from the following list could lead to the rejection of personal loan by Union Bank of India. These are:

Lower Credit Score – Union Bank prefers a credit score of 700 and above for approving personal loan. Low credit rating is a hindrance to get a personal loan
Lower income – this might interpret the lower financial capacity of the borrower to repay the loan and affect the loan prospect adversely
Unstable status of employment or business – This could be a strong reason for rejection since Union bank wants to ensure regular payment of the loan EMI
Working in the private companies that are delisted from the bank’s preferred companies can be the cause of rejection for the applicant
Living in an area where higher rate of defaults is observed
If the applicant does not fall within the age limit specified by Union Bank

Tips for improving CIBIL score to get Union Bank personal loan

If certain steps are adopted, those can help to improve the CIBIL score and the approval of personal loan from Union Bank will be easier. These are:

Use credit card in a way such that balance could be paid off within the due date and no balance is kept unpaid
Pay EMI of all the loans on time and there should be no missed or late payment
Clearing up any discrepancies in the CIBIL report. Erroneous reporting can damage the credit score
Maintain a credit card for a long time with timely payment and without using the maximum credit limit. This will help to boost the credit score
Credit utilization ratio should ideally be around 30% to keep the CIBIL score healthy
Maintain healthy balance of secured and unsecured loans
Do not apply for too many loans within a short period of time

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FAQs On CIBIL score for Union bank personal loan

What are the Personal loan rates of Union Bank?

It is 14.40% for salaried and self-employed persons and 12.90% for the pensioners

What is the eligibility criteria for getting Union Bank personal loan?

There are different parameters for eligibility. And these are as follows:

Age: For salaried employees – Minimum 21 years , Age: For self-employed people – Minimum 25 years
Income – A steady income is required and established with relevant documents to the bank and minimum income requirement as per Union Bank guideline has to be met
Job stability is required
Holding an account already with Union bank and maintaining a good banking relationship with them increases the chances to get personal loan
For employees of private company, the company should be in the permitted employers’ list of the bank
Minimum CIBIL score is 700
Pensioners have to maintain pension account with Union Bank

What if I have low CIBIL Score? Will Union Bank still give me a personal loan?

Union Bank keeps minimum CIBIL score as 700 for loan eligibility of the applicant. Therefore, it is unlikely to get a loan approved with a low CIBIL score. Before applying for the personal loan, the applicant should check the credit score and then apply, because rejection due to a low CIBIL score will have a further negative impact on the credit history

Does skipping Union Bank personal loan payment affect my CIBIL score?

Yes, missing to pay a loan instalment or being late in payment after the due date has passed, will indicate a negative payment capacity of the borrower and affect the CIBIL score

Had a loan settlement with Union Bank, Will it affect my CIBIL score?

A loan settlement interprets as insolvency of the borrower and if there is a ‘loan settlement’ in credit report, it will affect the CIBIL score heavily and it is very likely that the future lenders will reject any loan approval

Can I get more than 3 Union Bank personal loans if I have a good CIBIL score?

It is a good idea to check your eligibility for Union Bank personal loan using your CIBIL score. And if the score is good, you are eligible for personal loan. However, getting multiple personal loans is as per the guideline and discretion of the bank and you have to approach personally to check that. Applying multiple unsecured loans might affect the credit score adversely

How can someone apply for Union Bank Personal Loan?

One can walk to the nearest branch of Union Bank or apply online.

How is Union Bank Personal loan better than other bank personal loans?

Complete transparency regarding fees and terms and conditions
Most competitive interest rate for personal loan without any collateral
Long tenure with flexibility of pre-payment
Option to select fixed rate or floating rate of interest

Can the income of the spouse be included for taking the loan?

Yes. In that case the loan could be taken jointly or the spouse can guarantee the loan