Minimum CIBIL Score for Personal Loans

A CIBIL Score is an important factor that gives a snapshot of your financial health. It is considered by the financial institutions when you apply for a personal loan or any other credit product. A personal loan is an unsecured loan that has a short repayment period. It can be taken to meet a variety of your immediate financial needs and that too without pledging any collateral. However, financial institutions need to be assured of your credit health to know your repayment capacity. Apart from the general eligibility criteria that you need to fulfill, you will also need a good CIBIL score for a personal loan to approve your loan request.

A CIBIL Score has a range between 300 and 900. Ideally, a minimum cibil score for a personal loan is 750 and above to secure better deals. Your credit score helps the lenders to assess your risk of default. If you have a high score it suggests you have been a responsible borrower and paid your credit card bills and EMIs on time. On the other hand, a lower score increases your risk of defaulting on the loan.

Check your CIBIL score: It is important to know your personal loan cibil score before filing your application. You should check your credit score as it will give you an idea of where you stand in terms of your credit history and repayment. If your score is low, you can take time to work on it and gradually increase it by taking the right measures.

Get your CIBIL report for free: You can visit the official website of either credit bureaus or FinTech web portals to get your credit report. The Reserve Bank of India (RBI) has made it mandatory for all the credit bureaus to offer one credit report for free per calendar year. 

Browse and shortlist lenders: Once you have decided to opt for personal loans, now you need to look for lenders that are offering good deals on it. It is better to browse for deals and select one that is most favorable to you. As many banks are offering competitive interest rates on personal loans. Therefore, you need to look out for the best deal that will offer you maximum benefits in terms of interest rate and tenure and fringe benefits such as processing fee waiver.

Apply only with a few lenders: After shortlisting the lenders that are offering the most suitable plan, you should choose one and start filing your application. Make sure that you do not apply for the loan with multiple lenders at the same time as this will generate multiple hard inquiries. Several hard inquiries will harm your CIBIL score.

Your CIBIL Score works like a report card that shows your credit standing. It is calculated considering several factors like credit history, repayment behavior, and type of credit, among others. Long credit history makes it easier for lenders to make a sound decision about offering you a loan. However, if you do not have a CIBIL score currently, in that case, the lenders will consider other factors such as your age, income, and job stability to evaluate your creditworthiness.

Having a good credit score makes it easier for you to get easily approved for credit products. Here are a couple of ways in which you can start working on building a credit history:

• You can get a secured credit card which is issued against a fixed deposit. You can use it just like a credit card and pay the bills on time to build your credit score.

• Apply for a short-term personal loan. Make sure you pay your loan EMIs always on time to start building your credit score.

However, before applying for a loan, you should know how to calculate cibil score for personal loans. To know your score, you can check it online by entering basic details such as name, address, contact number, and your PAN number. Once you know your score, you will be able to know whether you are eligible for personal loans or not and what are your loan approval chances.

We at IndiaLends also offer free service to our customers to check their credit score for free. So, if you are willing to apply for personal loans, visit our website, check your eligibility there and compare multiple options from different lenders and then make the best choice.

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