ACF is a banking term that is often used when you apply for a loan. But many people are unaware of the ACF full form. The full form of ACF is Account Credit Facility and it is the type of loan given to businesses and corporate firms. It helps the businesses to take a loan from the credit facility allowed by the banks instead of applying for a new loan. The credit facilities are also given to retail customers who have their accounts with the bank. It includes car loans, home loans, personal loans, credit cards, and many other facilities. Therefore, the account credit facility may differ from customer to customer and bank to bank.
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How to Bank Decide on ACF?
The account credit facility differentiates from account to account. So, there are some factors on the basis of which the amount of ACF is decided.
The amount of credit facility depends on the credit score of the individual. If you have a high credit score then you will get a high credit facility. The credit scores are calculated by the credit bureau agencies and on the basis of which the bank decides the amount of credit to be given.
If you are having a stable and a high income then also you get a good ACF from the bank. The bank also gives you offers and low interest on the credit facility. So, the income of the individual is the responsible factor for the amount of ACF.
If you are having any existing loan then the ACF might decrease. It happens because you have already availed some portion of your credit facility. For more credit facilities, the bank will not lend a high amount and therefore you will get a low credit facility on your bank account.
The bank also goes through your bank statement to decide the amount of ACF. If you are having revolving transactions every month then it is a good sign to avail of the account credit facility from the bank.
Before you could get the account credit facility, the bank checks your repayment history to see whether you will be able to pay back the credit facility or not. So, in order to decide on ACF, banks will go through your repayment history.
Types of ACF
There are five types of ACF that a bank offers to its customers:-
- Retail Credit Facilities
- Revolving Loan Facilities
- Letters of Credit
- Retail Credit Accounts
- Committed Facilities
You know the ACF full form that is Account Credit Facility. This facility can be in the form of a Personal Loan, Credit Card, Home Loan, Car Loan, or any other type of loan. There are many responsible factors that affect the amount of ACF. You must also see the types of ACF that are offered by the bank and you can make the best use of these facilities.