Navigating the Road: Applying for a Car Loan with a Low CIBIL Score

by Chandrakant Joshi Financier

Dreaming of a new car? A low CIBIL Score shouldn't slam the brakes on your aspirations. While a healthy credit score is crucial for securing favorable loan terms, it's not the end of the road if your score has seen better days. In this article, we'll explore the strategies and steps to apply for a car loan with a low CIBIL score, understanding the significance of your credit score for a car loan, and utilising tools like checking your CIBIL score with your PAN card.

Understanding CIBIL Score for Car Loans

Your CIBIL score, or credit score, is a numeric representation of your creditworthiness based on your credit history. For car loans, lenders often set a minimum CIBIL score requirement to assess the risk of lending to an individual. A higher score is generally preferred, indicating a lower credit risk and increasing the likelihood of loan approval with favorable terms.

CIBIL Score for Car Loans

  1. Minimum CIBIL Score:

 Different lenders may have varying criteria, but a common benchmark with respect to CIBIL score for car loan is 650 or above. However, some lenders may consider applicants with slightly lower scores.

  1. Interest Rates:

   The interest rate on your car loan is influenced by your CIBIL score. A higher score typically translates to a lower interest rate, while a lower score may result in a higher interest rate to compensate for perceived risk.

  1. Loan Amount and Tenure:

   A higher CIBIL score may enable you to qualify for a larger loan amount and more extended repayment tenure, providing flexibility in managing your monthly payments.

  1. Eligibility and Terms:

   Individuals with higher CIBIL scores are likely to enjoy more favorable loan terms, including lower down payment requirements and reduced documentation.

Steps to Apply for a Car Loan with a Low CIBIL Score

  1. Know Your CIBIL Score:

   Begin by checking your CIBIL score. You can do this online, and one convenient way is to use your PAN card for verification. Visit the official website of a credit bureau like CIBIL, enter your PAN card details, and follow the steps to access your credit score.

  1. Research Lenders with Flexible Requirements:

   Not all lenders have the same CIBIL score requirements. Research financial institutions that may be more flexible with applicants with lower credit scores. Some lenders specialise in providing car loans to individuals with credit challenges.

  1. Consider a Co-Applicant:

   Adding a co-applicant with a higher CIBIL score can improve your chances of loan approval. The co-applicant's creditworthiness is taken into account, potentially offsetting the impact of your lower score.

  1. Apply for a Secured Car Loan:

   Secured car loans, where the vehicle serves as collateral, may be more accessible with a low CIBIL score. The collateral reduces the lender's risk, making them more willing to extend credit.

  1. Offer a Higher Down Payment:

   A higher down payment demonstrates commitment and reduces the amount of risk for the lender. It can also offset a lower CIBIL score, making you a more attractive candidate for a car loan.

  1. Prepare a Solid Repayment Plan:

   Outline a realistic and detailed repayment plan that showcases your ability to manage the loan responsibly. Highlighting steady income, job stability, and a sound financial strategy can strengthen your loan application.

  1. Seek Professional Advice:

   Consult with financial advisors or credit counselors who can provide insights into improving your creditworthiness and guide you through the car loan application process.

  1. Review and Dispute Errors on Your Credit Report:

   Obtain a copy of your credit report and carefully review it for any inaccuracies. Dispute and correct errors promptly, as they may be impacting your CIBIL score negatively.

  1. Consider Subprime Lenders:

   Subprime lenders specialise in providing loans to individuals with less-than-perfect credit. While interest rates may be higher, they may be more willing to work with applicants with low CIBIL scores.

  1. Demonstrate Stability:

    Emphasise stability in your application. Factors such as consistent employment, a steady income, and a reliable residence can positively influence a lender's perception of your financial stability.

Check CIBIL Score with PAN Card

You can check your CIBIL score with a pan card for free on Bajaj Markets website. Here are the steps to check your CIBIL score using PAN card:

  1. Visit the official website of Bajaj Markets.
  2. Navigate to the 'Credit Score' page.
  3. Fill in all essential details on the form such as name, mobile number, PAN, employment type, date of birth, and more.
  4. Click on the 'PROCEED WITH OTP' option.

Once you have completed these steps, you will be able to view your CIBIL score and report. A healthy CIBIL score can help you borrow money instantly. Your CIBIL score is a 3-digit number, ranging from 300 to 900, and is based on the information in your credit report. It is a measure of your credit health and reflects your creditworthiness. A CIBIL score above 700 is considered a good score according to TransUnion CIBIL. Checking your score regularly has no impact on your score. 

If you have any disputes regarding your CIBIL score, you can follow the CIBIL dispute resolution procedure.


Applying for a car loan with a low CIBIL score may pose challenges, but it's not an insurmountable hurdle. Understanding the significance of your credit score for a car loan, researching lenders, and utilising tools like checking your CIBIL score with your PAN card can empower you in the application process. Remember to explore different options, consider co-applicants, and focus on demonstrating stability and a sound repayment plan. Seeking professional advice and taking proactive steps to improve your creditworthiness can enhance your chances of securing a car loan on terms that suit your financial situation. With determination and strategic planning, you can navigate the road to car ownership, even with a low CIBIL score.

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About Chandrakant Joshi Freshman   Financier

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Joined APSense since, January 24th, 2024, From Mumbai, India.

Created on Mar 20th 2024 03:21. Viewed 77 times.


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