If you want to opt for a personal loan, your credit score plays an important role in determining your financial health and eligibility for the personal loan. CIBIL (Credit Information Bureau India Limited) is a credit rating agency that assigns numerical scores to individuals based on their credit history. This score serves as a measure of your creditworthiness and reflects your ability to repay debts.
Minimum CIBIL Score Required For Personal Loan
The minimum CIBIL score required for a personal loan is between 720 and 750. A score of 750 or above signifies a creditworthy individual capable of meeting loan obligations as per the payment terms. If your CIBIL score ranges from 651 to 750, you may still obtain a loan but expect a higher interest rate and shorter repayment tenure. However, a score below 650 is considered poor, so there is a higher chance of your personal loan application getting rejected. But don’t worry, read our guide to things you can do if your personal loan application is rejected.
How To Maintain a Healthy CIBIL Score
Below are some useful tips that applicants can follow to maintain a healthy CIBIL score.
- Make sure to pay bills and EMI payments
- Avoid late bill payments
- Maintain a favourable credit utilisation ratio
- Do not deactivate an unused credit card
- Avoid applying for many loans or credit cards simultaneously
- The ratio of secured to unsecured loans should be maintained
- Review Your Credit Report regularly and correct any discrepancies
- Avoid making multiple credit inquiries
- Monitor your co-signed, guaranteed, and joint account monthly
Probability For Loan Approval According To CIBIL Score
|CIBIL Score Range||Loan Approval Probability|
|750-900||The probability of getting the loan is very high. A score in this range means that you have great financial discipline and can make timely repayments.|
|600-750||You can get a personal loan. Although the CIBIL score in this range is not ideal, most lenders can still give you a loan. However, with this CIBIL score, you can get a loan with a higher interest rate, shorter repayment tenure, or both.|
|300-599||The chance of getting a personal loan is very low. A CIBIL score in this range is considered by lenders as a cautionary sign; It is considered to be credit risk and poor financial management. It is possible that your loan application might get rejected.|
The minimum CIBIL score required for a personal loan varies from lender to lender. A CIBIL score of 750 or higher is typically regarded as good and raises the probability that a loan will be approved. At LoanTap, we approve more than 95% of loan applications where the applicant’s CIBIL score is 750 or higher. Of course, that does not mean that applications with a CIBIL score lower than 750 are rejected.
Read More: Eligibility Criteria for Personal Loans
When assessing a loan application, lenders take into account a variety of factors, including the CIBIL score. Other elements, including income, work history, and outstanding debts, also have a big impact. Therefore, to increase their chances of getting a personal loan with favourable conditions, it is advised that people keep a strong credit score and a sound financial profile.