Low Credit Score Hidden Costs: If your credit score is low, the chances of getting a personal loan are reduced. Even if the loan is found, it is often given at higher interest. The reasons behind this are hidden hidden costs. Know its effect in 5 points…
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Difficult to get loan and higher interest rate
Banks give loans to customers with poor credit scores on their own terms. For example, if you take a loan of ₹ 5 lakh for three years and the interest rate is 11% instead of 10%, then you will have to spend extra 8,487 rupees. Small interest hikes may also overshadow the long term. So always improve your credit score. This will not only provide loans easily but will also reduce the interest rate.
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High credit card charge and extra expenditure
Due to poor credit score, the credit card often costs more interest and fees. Small late payment or mistake can also be taken as extra charge from bank or NBFC. This makes your money even more expensive.
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Impact on financial freedom
The low credit score also affects your long -term financial planning. This affects your loan approval, interest rate and the possibilities of future investment. Not paying EMI and bills on time weakens your financial credibility and banks or investors do not consider you worth trusting.
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Effect on big expenses and necessary planning
Bad credit score affects not only the loan but also on your big expenses and necessary plans. For example, it can be difficult to buy a house, take a car or take a loan for children’s education. Banks or NBFCs will give you a loan at higher interest rates or refuse loans. This affects your financial planning and makes difficulty in taking necessary decisions.
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