February 14, 2023

Taking a loan can be a convenient way to finance urgent personal expenses. In India, a personal loan is an unsecured amount an individual can borrow without collateral. Various banks and non-banking financial companies (NBFCs) provide personal loans for travel, medical bills, wedding expenses, and more.

When you apply for a loan, one of the metrics that lenders evaluate is your CIBIL score. This score indicates your creditworthiness and allows lenders to assess the risks of loaning you the money. Wondering what it means and what is the Minimum personal loan CIBIL Score? This guide will help you decode everything you need to know about CIBIL scores during your loan application.

What Does the CIBIL Score Mean?

TransUnion CIBIL is one of the best-known Credit Information Companies in India. It collects individual credit history data and assigns them scores to represent their creditworthiness. A person’s CIBIL score can range between 300 and 900. A higher credit score means that you are a more reliable borrower, and lenders have to bear a lower risk while lending you money.

The CIBIL score reflects different aspects of your credit history. It captures details about your repayment track record, credit inquiries, credit utilisation and similar metrics. A good credit score or CIBIL Score for a Personal Loan indicates that you are a financially responsible customer.

What is The Role of Your CIBIL Score While Applying for a Personal Loan?

The CIBIL Score is a valuable indicator of your reliability as a borrower. When you Apply for a Personal Loan, you need not put up any collateral. In such a situation, the lenders risk not getting repaid if you default on your payments. Hence, they closely examine your CIBIL score and credit history before granting the loan. However, the CIBIL Score is not the only aspect they evaluate. They also assess the following.

  • The company category.
  • Annual Income.
  • Records of EMI Repayment History

All these records help the lenders evaluate how likely you are to repay the loan on time. If your CIBIL score is high, you may get a loan with an attractive interest rate.

What is the Required CIBIL Score to Get a Personal Loan?

To Apply for a Personal Loan, your CIBIL score needs to be above the minimum benchmark. The threshold for a personal loan eligibility score varies from lender to lender. Many lenders require a minimum CIBIL score of 750 to approve a personal loan. However, some lenders may provide unsecured loans to individuals with scores of 720-750. So, the bottom line is that the minimum CIBIL score required for personal loans differs for lenders.

Some borrowers are unsure if they can obtain a personal loan without a CIBIL score or you may be a first-time borrower with no established credit record. You can consult experts at Your Loan Advisors to find lenders who may provide unsecured loans without a CIBIL Score or get more details about the credit score needed for a personal loan.

Your employment and income records are other critical factors in Applying for and Processing a Personal Loan. For more information about the required CIBIL score, contact the Your Loan Advisors team today!

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