Whenever you apply for a personal loan or any other lending service like a home loan, car loan, emergency loan and all, the lender always checks your CIBIL score and income. Where CIBIL score is considered at first. The reason behind checking the CIBIL score is only to get acquainted with the customer's creditworthiness. This means that the lender always tries to know the transactional history of the customers. Lenders always want to be assured, that the borrower will be able to repay easily. Therefore, it’s a common question for all borrowers, especially new ones, what is the required CIBIL score for personal loans? And to know this explicitly, let's understand the range of CIBIL scores, especially how much you need to get a personal loan.
What is the Good CIBIL Score for a Personal Loan?
CIBIL score starts from 300 and its highest limit is up to 900 which is known as excellent Score. However, the range of a good CIBIL score starts from 750 which is always preferred by the lenders. Some lenders also consider lower scores when the customer's income is higher but their CIBIL decreases due to multiple reasons. The range of CIBIL scores is as follows.
300-599: The CIBIL score starts from 300 and up to 599, it is treated as poor, which is not suitable to get the loan. You might have to face difficulties with such a score.
600-649: It’s treated as fair which may be sufficient for the loan application but it must be noted that with this score you will have to struggle while searching the lender.
650-749; It comes under a good category where there are chances that with some short-term loan, you can enhance your score like borrowing a payday loan, buy now pay later scheme and all.
750-850: Every lender always prefers a score above 750 which is treated as a good CIBIL score and if you apply for a personal loan with this score, your loan is approved shortly because of certainty in the repayment.
850-900: It comes under the regime of excellent CIBIL score where you will get various additional features like concession in the interest rate and affordable tenure as well.
How to increase CIBIL score
It will undoubtedly emerge in the mind tips to improve CIBIL score, especially for those having lower CIBIL scores and who are facing difficulties in getting financial services, therefore, some tips are there which will certainly help you be comfortable and these are as follows
Repay the loan or credit bill on time: Always try to pay your outstanding balance on time before getting delayed. If you have debt then be ready with the repayment strategy. It will help you enhance your credit score.
Never use the higher limit of credit card: Always try to use the lower limit of the credit card and never cross the limit. It will enhance your financial reputation and you will be able to ensure a good CIBIL score in a few months.
Apply for a limited loan: It’s essential to choose lenders who are ready to approve your loan as per your income and credit score. Never apply at multiple platforms because they will check your credit score and doing so multiple times can hamper your score.
Borrow the lower amount: You can always choose the short-term loan with the lower amount which will also help you enhance the CIBIL score with the easy repayment.
Conclusion
It’s almost clear that a good CIBIL score for a personal loan starts at 750 but it can also be considered with a slightly smaller amount such as 700 and above. So, if you have a higher income with a good credit score, you can apply for a personal loan. Whereas, if you are facing difficulties in borrowing due to the lower CIBIL score. Then search for a lender who provides loans for lower CIBIL also. Borrow the small amount frequently and repay the loan on or before the repayment date. It will enhance your score in a few months and also will help you get better financial support in future.
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