POSTED BY July 31, 2013 4:15 pm COMMENTS (5)ON
Citibank is offering Paylite program, where the current outstanding can be converted to EMIs to reduce the interest outgo. I would like to find out if this impact my CIBIL rating in anyway. Also, I’m looking forward for a car loan in the near future. Will opting for the Paylite program impact my eligibility for car loan in anyway? With a CIBIL score of 800+, what rate of interest can I bargain for a new car loan if the bank qoutes for ex 10.5%?
Thanks in advance for your suggestions/replies.
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5 replies on this article “Citibank Paylite Program”
Dear RK, if you are running an overdue on your CC which you are unable to clear in one shot, do you really need a CAR? Think over it.
Thank you for your replies. I’ve spoken to Citi today and per their executive, CIBIL score would not be affected as it is not reported to CIBIL. Also, it is not a settlement and neither a PL. The interest charged works out to 24% pa monthly reducing, with options of 6/12/24/36 months as repayment periods. The card is not blocked during the repayment period and each month the principal paid out from the EMI is added back to the available credit limit.
It all sounds good, but considering whether to opt for a PL which comes between 15-18% pa or take up the Paylite program as I do not want to jeopardise my eligibility for a car loan in case I take a PL and project myself as “credit hungry” 🙂
Thank you all once again for your time and patience.
Just make sure that this “convert to EMI” is a standard offering means as a benefit and not just a feature, because anyways all the lenders give you that option once they find out that you cant pay them in one shot 🙂
The CIBIL score should not be affected by just enrolling to Paylite program. It will get affected only when there is a default or delay in payment of the credit card bill.
As the amount that is enrolled in Paylite program will be considered as the loan amount by other banks, the loan eligibility will get reduced while you are applying for a fresh loan by that much. But for Car loan, this shouldn’t be a problem.
Some banks give the car loan at reduced interest rates even without considering the CIBIL score and have tie-ups with the merchants. Please check some loan comparison site to get the best loan rates for your requirements.
If the structure of the Paylite program converts the outstanding amount into EMI then, it could be a good option as EMIs would reduce your repayment burden as against repaying the complete outstanding amount in a single payment.
Do confirm with the bank that there should not be any “Restructured” or any other negative remark reflecting on your credit report post converting to EMI. Any such remarks will negatively impact your credit score.
800+ is a good score for a Car loan but we would be unable to comment on how much you could negotiate as much of it would also depend on the internal credit policies of the lending institution.