New Delhi, Sept. 29 -- Clearing the final Equated Monthly Instalment (EMI) on a personal loan marks an important financial milestone, but borrowers should not expect their CIBIL Score to increase immediately after the loan is fully repaid.

A closed loan continues to appear on your credit report because it forms part of your credit history and records your past repayment behaviour. In some cases, closing an active instalment loan may even result in a small, temporary decline in the score, particularly for borrowers with a limited credit history or fewer active credit accounts. This can happen because closing the loan changes the overall composition of the borrower's credit profile.

Loan closure is not just about making the final payment....