A personal loan can be of great help in times of financial distress. Not only are these loans easy to get as there is no need for collateral, there is also no restriction on the end-use. However, in order to get a personal loan amount of your choice along with a convenient repayment term and interest rate, you need to have a good credit score.
In this article, let us understand what is the minimum CIBIL score for personal loan.
When you wish to pursue higher education, you will have to take entrance exams and your grade will determine your eligibility. Similarly, when it comes to loans, your credit score or CIBIL score will decide your eligibility criteria. The higher the CIBIL score, the greater is your creditworthiness.
Your creditworthiness indicates your repayment ability therefore if the lender is convinced that you will repay on time, you will get a loan easily at advantageous terms and conditions. This is why you will need to have a minimum CIBIL score determined by lenders, to be eligible for a loan or other credit products. The minimum CIBIL score for credit card and minimum CIBIL score for loan will vary.
To know more about : A Comprehensive Guide About the CIBIL Score.
The minimum credit score for personal loans is between 730 to 750. CIBIL scores range from 300 to 900 with 900 being the highest. Higher the score, greater is the chance of getting a loan at favorable conditions.
CIBIL score minimum and maximum range for personal loans is between 600 and 900 although having a 900 CIBIL score is rare. Although 600 is the minimum, it is still hard to avail personal loans at this score. Any number above 750 is seen favorably by lenders.
If your score is above 750, you can easily get a personal loan or any kind of loan from lenders at an interest rate and repayment tenure that suits your needs and wants. But what can you do if your credit score is lower than 730? Will you not be able to get a loan then?
Luckily, this is not the case.
As mentioned previously, if you wish to join a university, you will have to clear the entrance exams and the score that you get will determine your eligibility. This score will also have an impact on the subjects you can choose, the fee you will have to pay, etc.
Similarly, your credit score will determine your loan eligibility. Higher the score, better are your chances of getting a loan at favorable terms and conditions. Here are some of the reasons why it is important to maintain a high credit score -
A high credit score can only be achieved if one repays all loans on time, maintains a good credit utilization ratio, has a good mix of secured and unsecured loans, and doesn’t take multiple loans at the same time.
Therefore, if one’s credit score is between 750 to 900, it is a good indication that he/she follows healthy credit practices. Hence, lenders will easily provide loans to such borrowers at favorable terms and conditions.
Perhaps the most important criteria for borrowers, the rate of interest imposed will have an impact on your EMIs. If you have a high credit score, your lender will have faith in your repayment abilities and will therefore provide loans at lower interest rates.
If you have a high credit score and you have proven your ability to repay a loan, you will be able to avail a higher loan amount along with a longer repayment term. A higher loan amount not only works to your advantage, the longer repayment period will ensure that your monthly payments are not too high.
However, it is to be noted that longer repayment periods will result in a higher interest amount being paid over time.
Once the lender is sure of your repayment abilities, there will not be any unnecessary delays in loan approvals. Therefore, not only will you be able to get a loan at your terms and conditions, you will also get a loan easily.
Maintaining a high credit score is essential but sometimes, due to certain circumstances, this might not be possible. If you are new to credit then you may not have a good credit score yet. Both these situations make it hard for you to avail a loan easily from most lenders.
CIBIL scores can be categorized into certain groups and depending on which group your credit score falls into, your loan eligibility will vary.
If your credit score falls within this category then chances are that you are new to credit or you have defaulted on your loans, or followed other bad credit practices. With these scores, it will be very hard for you to get a loan.
While these credit scores are slightly better than the previous range, it is still not ideal. This is the minimum CIBIL score required for personal loans. You may still avail personal loans but the conditions will definitely not be in your favor. Either the interest rate will be high or you will not get a high enough loan amount. The good news is that you can increase your credit scores by following certain best practices.
If your CIBIL score falls within this range then congratulations! You can easily get a loan of your choice. Not only will your lender give you the loan amount that you want, you will also get it at a rate that is beneficial for you.
The CIBIL score minimum and maximum is 600 and 900 respectively. However, just having a minimum CIBIL score for a loan is not enough to actually get a loan amount that is beneficial to you. Do your best to increase your credit score over time and reap the benefits.
Luckily, with Moneyview, it is now possible to get loans even if your credit score is low.
Your credit score is determined by your repayment history, the number of loans you have taken, frequency of default, etc. and as mentioned previously, is a major determinant of your loan eligibility.
At Moneyview, however, things work slightly differently. Our lending partners use unique credit rating models that factor in various criteria and are not just limited to your credit score. This is why, even if you do not meet the general minimum CIBIL score criteria, you can still get a personal loan from us.
While you can get loans without meeting the minimum CIBIL score requirements, it is always advisable to work on increasing your credit score in the meantime. Some of the ways you can do this is through the following -
Repay all your loans on time
Take loans only when you are sure you can repay them
Do not take too many loans at the same time
Monitor your credit utilization ratio
To know more about how you can increase your credit score, check out our article on this.
The minimum CIBIL score for a loan is usually between 600 to 750. If you are availing a secured loan, i.e., where you have to provide collateral, the eligibility criteria is not as strict. However, having a score of about 700 or 750 is ideal.
However, when it comes to personal loans and other unsecured loans, the eligibility criteria and credit score requirements are quite stringent.
Credit cards are also a type of unsecured loans but come with higher rates of interest. The minimum credit score for a credit card would be around 750.
It will be difficult for you to get a loan if your score is 690. Although 600 is the general minimum CIBIL score for loans, you will still not be able to get a high loan amount or low interest rate. However, you can get a personal loan from Moneyview as long as your CIBIL score is 600 or above.
Yes, you can. If you are new to credit and do not have a CIBIL score yet, you can still get a loan. However, the amount you receive will be slightly limited and the interest rate may be on the higher side as well.
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