How does my credit score affect my EMI amount and interest rate?

Your credit score plays a significant role in determining both the EMI amount and the interest rate you receive on a loan. Here's how it typically affects them:

1. Interest Rate:
A higher credit score often results in a lower interest rate. Lenders view borrowers with higher credit scores as less risky and more likely to repay their loans on time. To attract borrowers with good credit, lenders may offer lower interest rates.
Conversely, a lower credit score can result in a higher interest rate. Lenders may charge a higher rate to compensate for the perceived higher risk associated with borrowers who have a lower credit score.

2. EMI Amount:
The interest rate directly impacts your EMI amount. A lower interest rate will result in a lower EMI for the same loan amount and tenure.
Conversely, a higher interest rate will result in a higher EMI for the same loan amount and tenure.

In summary, a better credit score typically leads to a lower interest rate, which, in turn, leads to a lower EMI. It's essential to maintain a good credit score to access more favorable loan terms and lower borrowing costs. If you have a lower credit score, you may want to work on improving it before applying for a loan to secure better loan terms.