You might get a loan without any hassles if you have a good credit history. Your CIBIL score is the numeric summary of your overall CIBIL report and the payment history depending on which financial establishment decides whether they should sanction or reject your loan application. The Credit Information Bureau India Limited is primarily preferred in India. The CIBIL score ranges from 300 to 900. The more your credit score is, the better deals you will get. You can undergo the CIBIL Score Check free on the official website of CIBIL or install the CIBIL score app.
What is the Minimum CIBIL Score Required For a Personal Loan?
Speaking about the minimum CIBIL score required for a personal loan is based on the loan type you selected. To be eligible for a personal loan, having a steady income source and a good CIBIL score. The minimal CIBIL score required for a personal loan is 750 or more than 750. With such CIBIL scores, you can fetch a high loan amount, a quick approval process, and negotiate on the interest rate. You can go through the CIBIL score check for free procedure with the help of the CIBIL score app. Therefore, a good credit score is significant for loan approval at banks and non-banking finance establishments.
Lenders consider a CIBIL score from 300-599 as bad. It warns the lender of your poor credit history. Thus, almost all lenders will reject your loan application. If you have a poor credit score, it is essential to work towards improving them.
Lenders consider CIBIL scores between 600-745 average and not risky like the earlier ones. Even if lenders approve your loan application and you get a loan, the interest rates will be high, and the loan terms and conditions may be less favourable to you. Many lenders might overlook the score and approve your loan application depending on a few factors like
- Relationship with the lender
- Work Experience
- Income proof
- Repayment ability
Lenders consider CIBIL scores above 750 to be suitable for personal loans. Many lenders might give you spot or instant loans with high CIBIL scores. If you have high credit scores, you can enjoy other benefits, such as low-interest rates, high amounts of loans, low processing fees, etc.
Reasons Why Retaining a Minimum CIBIL Score is Important for Personal Loans
Your CIBIL score reflects your overall CIBIL report and repayment habits. Lenders examine your CIBIL score for many reasons. You can undergo the CIBIL score check for free with the help of the CIBIL website or the CIBIL score app. Some reasons why retaining a minimum CIBIL score is vital for personal loans are as follows:
- You can avail of a high loan amount if you have excellent credit scores. You can even negotiate for low interest, which is only possible if you have a good credit score. If you need a better CIBIL score, lenders might offer you a loan with a low amount with high-interest rates.
- Evaluating your credit health or ability gives lenders a notion of your creditworthiness and how capable you are of repaying the loan amount on time. If your CIBIL score is high, it will guarantee you will repay the loan on time, whereas a bad CIBIL score will raise doubts. Low CIBIL scores will lower your chance of getting a personal loan.
Aspects Impacting the Eligibility Criteria of Personal Loans
The aspects impacting the eligibility criteria for personal loans are as follows:
- Your credit profile
- The required loan amount
- Term Applied
- Repayment Ability/ Your Income
Among the aspects mentioned above, your credit profile consists of your CIBIL score and the credit bureau’s comprehensive report. It is an essential factor while approving a loan application.
Conclusion
The loan application procedure will be quicker if you retain a CIBIL score of around 750 or above 750. The loan amount will be higher, and you might negotiate a low interest, and the overall loan approval procedure will be simple. If your credit score is below 700, you take steps to boost your credit score. You can go through the CIBIL score check for free with the CIBIL score app. If your credit scores are excellent, a few lenders might provide you with spot or instant loans.
