Minimum CIBIL Score For Personal Loan That You Should Know

You must have heard about how some people face rejection from lenders when going for a personal loan because of their CIBIL Score. This happens because lenders ask for a minimum CIBIL Score for personal loan that also changes from one lender to another. But, first of all, you should understand what is a CIBIL Score? Well, the Credit Information Bureau of India Limited (CIBIL) provides a 3-digit score that defines the creditworthiness of an individual with which lenders can have an estimate about your repayment behavior. This score ranges from 300 to 900.

So, what should be the minimum CIBIL Score for personal loan that an individual needs to qualify for? If we were to talk in general senses, lenders ask that individuals should have a CIBIL score of 750 or above to get a personal loan. Also, a personal loan is an unsecured loan for which individuals don’t need to present any kind of collateral. This is why the role of credit score becomes crucial for every individual who wants to opt for a personal loan from any lender. In this article, we will be telling you about the important aspects related to the CIBIL Score that will help you understand the importance of it better. Keep reading to know more!

How can having a Minimum CIBIL Score for Personal Loan Help You?

As we mentioned earlier that individuals need a minimum CIBIL Score for personal loan that is usually 750 or above. Let us tell you the reason behind the need of checking the score before sanctioning a personal loan. When lenders provide a personal loan to an individual who has a brilliant CIBIL score, the lender feels a lesser credit risk as compared to providing a loan to an individual who has a poor credit score. Simply put, an individual with a higher score has more chances to repay the loan without any delay.

This is why lenders like to fix a minimum CIBIL Score for personal loan. Before sanctioning the loan, lenders check the score and disburses the loan after checking other factors too. But do you know that you can enjoy a range of other benefits if you have an excellent CIBIL score? We are showing them below. Have a look!

1. One of the important factors while looking for a personal loan is the interest rates on it. Personal Loan Interest Rates directly affect your EMI amount. A higher CIBIL Score can make lenders lower personal loan interest rates to such individuals. Lenders feel that individuals with good scores will have more chances to pay on time as compared to individuals with poor scores.

2. Other than lower interest rates, one of the best advantages of qualifying a minimum CIBIL score for personal loan is such individuals can also get a higher loan amount as lenders feel a lesser credit risk.

3. When you have a higher CIBIL score, and going for a personal loan, you can get a faster application processing time. Other than this, the loan amount will be disbursed into your account sooner than individuals with lower scores.

4. There is one important thing you need to know that other than the CIBIL Score, there are a few other factors that impact your personal loan eligibility. So, first, you need to qualify for a minimum CIBIL Score for personal loan. But the other factors are Employment Type, Location, Repayment Track, Existing Debts, Monthly Income, etc.

5. Lenders always check these factors and then take the final decision. For example, if an individual has a higher monthly income and a few existing obligations, he can get a higher loan amount as compared to an individual with a lower income.