How to increase the credit limit for a business loan? Over a period of time as the business grow; we look forward to increasing the credit limit for a Low cibil score business loan in Chennai Tamil Nadu provided the business has the credit line facility from the banks. This comes in handy when access to external funds is demanded. Getting approval for the increase in credit limit is not an easy process. Here are some of the tips that when followed help to increase the credit limit for a business loan.
Maintain a spotless repayment history As the banks keep track of your repayment history, it is essential to maintain a spotless record which increases the chances of your credit limit getting increased. Your credit limit will be increased by the creditors automatically if you make payments on time.
Have an apt reason to request a credit limit increase You should not request a credit limit increase just because your business has new opportunities on the way. You should have a valid reason before requesting a credit limit increase. If you have received more orders or if you have signed a new contract, show the proof of the same to the banks so that they can get a justifiable reason to increase the credit limit. In case the bank finds the reason to be unjustifiable, there are chances that the bank may withdraw the credit line interest.
Often use the credit line irrespective of the need According to this, even if you don’t have a need to use the credit line, use it. Such that the bank may approve your credit limit increase when the need arises. The bank will be reluctant to increase the credit limit if they find that you haven’t utilized the credit line for quite a long time. It is because, only if you utilize the credit line, the bank can earn any interest income out of it. Hence, it is advisable to use the credit line once every 3 months irrespective of the need.
Find the right time to ask Your credit line will be reviewed automatically within one year of granting by the banks and finance companies in Chennai. It is essential to note that the review can be requested only at the end of one year and not within a few months of issuing the credit line. Doing so may create a negative impact from the bank side as well as on the finance companies in Chennai.