Loans for CIBIL Defaulters

Image by psoe extremadura via FlickrCIBIL maintains the database of the customers of its member banks, it contains the credit history of the borrowers. Whenever one applies for a loan the member banks inquire CIBIL for the credit history of the borrower in its database. CIBIL will never recommend to give a loan or reject the loan, it only provides the information updated by its member banks and it is for the banks to take the decision to grant the loan or reject the loan application.
Let us first understand how CIBIL operates. First when one apply for any Loan or a credit card the bank enquires with CIBIL to know the credit status of the applicant. When the bank inquires with CIBIL, the application details are updated in CIBIL records, so that when some one inquires again in future they will know how many times inquiries are made earlier against this applicant and for what type of loan and for what amount. For inquiring the banks normally provide details like First name, Last name, Date of Birth, Pan Card number, Father name, address. Bank check for the matching details in the CIBIL database and takes out the report of the applicant. In the report given to the banks the bank name is hidden, it only give the details of the type of loan or credit card and the loan details. The banks monthly updates the transactions of the loan or credit card. The CIBIL maintains record for the last 36 months of the transactions of loans or credit cards. If the loans are paid or not paid on time they are updated in the CIBIL database, it shows the payment track and the days of delay if any.
If any one delays or defaults payment it is shown in the status column of the loan as written off, overdue or settled. As said earlier bank names are not reflected in the report generated by banks (If detailed report with Bank names are needed the application is to be made directly to CIBIL by paying necessary fees). In such cases where there are overdues, late payment history in the CIBIL report, banks normally do not give loans. But one can still avail Home Loans and Car Loans since they are secured loans. These loans are given only when the credit manager of the bank satisfies that your other default loans reflected in the CIBIL report are settled. So one has to remember to take clearance letters when settling outstandings of the default loans. These letters are to be provided to the credit manager of the applying banks. Then it is the the discretion of the credit manager and his comfort to sanction the loan. After couple of secured loans and with their good payment tracks one can apply for credit cards and other unsecured loans.