New Delhi, Oct. 7 -- When applying for a personal loan, borrowers are usually expected to have a good credit score. Someone with a poor credit score generally fails to secure a personal loan. Even if they receive a loan offer, it is typically given at a high interest rate.

Therefore, it would not be wrong to say that a low credit score carries a hidden cost. This cost is paid in the form of a high rate of interest. Apart from a higher interest rate, there are several other disadvantages. These include the following:

I. From loan denials to high interest rates: As mentioned above, borrowers with poor credit scores are generally given loans at high interest rates, even if they are approved. A small increase of 1% interest can cost you dea...