Know what the minimum CIBIL Score for Personal Loan is and more
Collateral-free and unsecured, Personal Loan comes with numerous benefits, including paperless documentation, swift loan approvals and disbursals, and flexible repayment tenures. And while you can avail of these Personal Loans easily, you need to ensure you fulfil the key criterion of the lender. You need to ensure you have an excellent CIBIL score. Let us understand why a good credit score is crucial in the Personal Loan procurement process and how much CIBIL Score is required for Personal Loan.
Out of the four licensed credit bureaus in India, the TransUnion Credit Information Bureau of (India) Limited or TransUnion CIBIL is the most renowned. CIBIL is a 3-digit numeric indicator of your credit history, ranging between 300 and 900. The way it works is, financial institutions provide your loan and credit card bills repayment progressions to the CIBIL, which in turn makes a credit report comprising your credit score.
Personal Loans are unsecured and collateral-free loans which means you do not have to worry about mortgages. You do, however, need a certain credit score so that lender can rest assured about your loan repayment capacity. Essentially, your credit score is like a grade you receive for performing well on your credit payments.
A good CIBIL Score indicates that you have repaid your loans or credit card bills on time. It assures lenders that you will continue doing the same in the future. Your creditworthiness and capability to repay the loan are the primary factors for lenders to grant the loan.
Your credit score is the first thing lenders check when you send your Personal Loan application. Lenders are more inclined to approve and disburse loans to candidates with higher credit scores. Consequently, they may be apprehensive considering your application if your CIBIL score for Personal Loan is low.
The loan amount you receive depends on your credit score. You can get high-value Personal Loans with high credit scores. Also, a high credit score places you in a position to negotiate interest rates offered on the loan.
Most banks generally require you to show a minimum credit score of 600 while applying for Personal Loans. Applicants with a CIBIL score of 750 are more likely to get their loan processed, approved, and disbursed swiftly. If you cannot produce the minimum CIBIL score needed for Personal Loan, the lender may approve your loan but levy a higher interest rate.
It is impossible to predict when a financial crisis may occur. A Personal Loan can help you tackle such a crisis. Since Personal Loans are collateral-free, the only way to avail one is with a high credit score. A good CIBIL score for Personal Loan expedites your loan application process and provides quick access to funds.
Download the digibank mobile app on your smartphone. Launch the app and click on the "Get Personal Loan" link on the login page. Also, you can open bank account online with us.
*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.