How does your CIBIL score impact interest rates on loans? MintGenie explains

livemint.com:

CIBIL score, has a key impact on the interest rates one is offered at the time of borrowing money. The relationship between your credit score and interest rates is usually inverse, which means the higher your CIBIL score, the lower the rate of interest, and the lower the score, the higher the interest rate. For instance, Ajay Mishra, a 31-year-old marketing manager boasts of a credit score of 760.

He already has an offer of credit cards from two different banks which have waived off the annual fee, and his bank is offering him personal loan equivalent to his annual salary at 10.75 percent per annum, which is reasonable by the standards of personal loan. If you have a high credit score (usually considered to be above 700 or 720), lenders see you as a low-risk borrower. They believe you're more likely to repay your debts on time and in full.

As a result, lenders are more willing to offer you lower interest rates on loans, mortgages, and credit cards. Conversely, if you have a low credit score (typically below 600 or 620), lenders may view you as a higher risk. They may be concerned that you might not repay your debts as agreed, which makes lending to you riskier.

In such cases, lenders may charge higher interest rates to compensate for this increased risk. Different lenders may have varying thresholds for what they consider a "good" or "bad" credit score, but generally, the higher your credit score within these ranges, the more favourable the interest rates you'll receive: This relationship between credit score and interest rates applies to various types of borrowing such as mortgages, car loans, personal loans and credit cards. In case of home loan, a higher credit score can lead to lower mortgage interest rates, which