There is little doubt about the fact that a personal loan is one of the most popular products among people who are in need of urgent funds. With the help of a personal loan, an individual can get the required loan amount for a maximum period of 5 years at affordable interest rates. There are so many lenders that provide a personal loan to customers. But the most important question in front of the customer is what is the minimum CIBIL score for personal loan? This is something with which a lot of people grapple with.
To know the answer to this question, you first should know about the CIBIL score. This is nothing but a three-digit score of an individual ranging from 300 to 900 indicating the creditworthiness and repayment behavior of an applicant. This score is given by the CIBIL, which is the leading credit bureau of India that’s why it is known as the CIBIL score. When we talk about the minimum CIBIL score for personal loan, it is considered to be 700 among the lenders as any score of 700 or above is considered to be good but minimum score tends to change from one lender to another. In this article, we will be telling you about the importance of the CIBIL score while opting for a personal loan. Keep reading!
Importance of the Minimum CIBIL Score for Personal Loan
You must be thinking what is the reason because lenders have this minimum CIBIL Score for personal loan? Well, as you know a personal loan is an unsecured loan which means that an individual doesn’t have to pledge any kind of security against the loan amount. So, lenders feel a certain kind of credit risk, and to minimize this risk as much as possible, they check the CIBIL score of an individual before giving the loan amount.
If an individual has a good credit score it simply means that he or she is capable of handling the debt and will repay the loan amount responsibly. CIBIL score simply determines your creditworthiness and how you repay your past debt. So, if an individual has a CIBIL score of 700, and a lender has minimum CIBIL score criteria of 750 then it would not be possible to get a personal loan from a lender. When we talk about the importance of the CIBIL score in the personal loan, there are so many benefits that an individual can get.
First of all, if you have a good CIBIL score, then your loan application will be approved faster as compared to an individual with a low CIBIL score. And when your application will approve quickly, your loan amount will be disbursed as soon as possible from the lender. You can also get a higher loan amount if you have a good CIBIL score according to the lender’s criteria. But you need to remember that the final loan amount will be decided on the basis of your income and repayment capacity.
As lenders are more likely to provide you a personal loan because of your past repayment history. Other than this, you can get much lower personal loan interest rates on having a low CIBIL score. The probability of getting low-interest rates is pretty high if you have a high CIBIL score and vice versa. But it is important for an individual to keep an eye on his or her CIBIL Report to check if there are any inaccuracies in the report. These can be related to any aspects of your credit report such as personal details, loan details, etc. After getting them corrected from the CIBIL credit Bureau, your score will get updated. An individual also need to remember that minimum CIBIL score for personal loan changes from one lender to another.