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How Much CIBIL Score Required For Personal Loan

How Much CIBIL Score Required For Personal Loan

If you are looking for a personal loan to finance some immediate expenses, you must know about one of the most crucial determinants of your loan approval – the CIBIL score.

CIBIL is an authorised bureau in India that provides every individual with a credit score. A credit score is a 3-digit number ranging between 300 and 900 that acts as a benchmark for lenders to gauge your credit health. Hence, you require a decent CIBIL score for personal loan approval.

A CIBIL score includes all the information related to your EMI payments, your account’s outstanding balance, credit card payments, any alterations to your credit limit, and other details associated with your credit profile. Subsequently, a mathematical formula is devised to calculate your final credit score. If you have made all your EMI payments on time without any defaults in the past, your CIBIL score would be high. Conversely, if you have a history of defaulting, it will adversely impact your credit score.

Besides your monthly income, the CIBIL score is one of the most critical parameters that decide your personal loan eligibility. The higher your CIBIL score, the better the chances of getting a loan approved. But the question is- how much CIBIL score is required for a personal loan?

As a preliminary step, lenders look for a minimum CIBIL score of 750 before they take a call on your loan application.

Understanding CIBIL Score Ranges for Personal Loan Approval

Let us now look at three cases, each of which details the CIBIL score range for a personal loan.

Case 1: Your CIBIL score lies between 300 and 599

Wondering whether you can qualify for a personal loan with a CIBIL score of 550? Well, the chances are that you will not qualify for a personal loan. This is because a score between 300 and 600 warns the lenders about the bad credit behaviour of the borrower. Thus, most banks will disapprove of your personal loan application immediately if you fall under this CIBIL score range for a personal loan.

Case 2: Your CIBIL score lies between 600 and 749

With a credit score in this range, there is a relatively moderate chance of your loan application being approved by lenders. Financial institutions would usually look for other factors to gauge your personal loan eligibility, such as your monthly income, other existing loans, employment stability, debt-to-income ratio, employment history, credit history, relationship with the bank, etc. Loan approvals for credit scores within this range often come with slightly higher interest rates.

Case 3: You have a CIBIL score of 750 or above

If you have a score of 750 or above, your loan application is very likely to be approved. Besides, there are other advantages of maintaining a high credit score for a personal loan. For instance, you may be able to negotiate a lower interest rate with the lender.

While there is no minimum CIBIL score required for personal loan approval, it is safe to say that a low score will lead to the rejection of your application. So, make sure you maintain a healthy CIBIL score.

Also, read – How to Increase CIBIL Score From 600 to 750

Ways to improve your CIBIL score

Is your CIBIL score on the lower side? If yes, you will find it challenging to get your loan approved. But don’t worry! You can increase your CIBIL score over time by taking the following measures:

1. Pay your bills on time:

Paying your credit card bills and other outstanding debts on time can significantly improve your CIBIL score. On the other hand, even a single missed payment can negatively impact your score.

2. Limit your credit utilisation ratio to 50%:

If the approved limit of your card is Rs 2 lakh, try to restrict your spending to less than half of the amount. A low credit utilisation ratiorepresents good spending discipline.

Tip: Maintain a healthy credit mix by balancing different types of credit, like a credit card and a small loan or EMI. This shows lenders you can manage multiple credit types responsibly.

3. Avoid applying for multiple loans simultaneously:

Remember, when you apply for a loan or credit card with multiple lenders, you appear ‘greedy’ for credit, making a lender more likely to reject your application. Multiple loan applications also adversely impact your credit score.

4. Regularly monitor your credit health:

Check your credit score regularly. You can check your credit score and credit report online for free. Keep an eye on any changes and see your progress. If you find any errors or discrepancies, get them removed immediately. This will help you achieve your desired CIBIL score required for a personal loan.

Also, read – What Does a 777 Credit Score Mean?

How long does it take to improve the CIBIL score?

The good news is that you can take as long as you want to rebuild your credit, so be patient with your efforts. Remember, following healthy financial practices consistently will help you improve your CIBIL score over time.

First, identify the extent to which your credit score is hurt. Then, you can explore what immediate steps you can take. The credit score recovery process can take anywhere between 6 months and a year, depending on your credit health.

For instance, suppose you are in the process of repaying a home loan, and you miss a payment. A missed payment will negatively affect your score for a while. However, you can still rebuild it quickly by making payments on time in the future. However, if you continuously miss payments or default on loans, it will damage your score considerably. Therefore, it will take you a long time to recover.

Also, read – How To Improve CIBIL Score After A Payment Default?

Why is Your Credit Score Important for Personal Loan Approval?

Your credit score shows lenders how well you’ve handled money in the past. As such, it is a big factor in whether your loan gets approved. A high CIBIL score makes lenders feel comfortable, which means you’re more likely to get a higherloan amount.

A good credit score also helps you get lower interest rates and better loan terms. This is because it makes lenders feel confident that you will repay on time. As a result, they are willing to offer better interest rates, flexible repayment options, and quicker processing.

Moreover, since personal loans are unsecured loans, meaning they don’t need any security or collateral, banks depend on your credit score to judge risk. Most lenders prefer a score of 720–750 or higher, so having a strong score makes the entire approval process smoother and faster.

Also, read – Know How Mortgage Loans Affect Your CIBIL Score

Minimum CIBIL Score for Personal Loan by Tata Capital

Tata Capital generally prefers a minimum credit score of 750 for personal loan approval. A score in this range shows strongrepayment capacity, increasing your chances of getting approved quickly and securing better interest rates, tenure, and loan terms.

Also, read – Impact of Late Payment on CIBIL Score

Can You Get a Personal Loan with a Low CIBIL Score? (or No CIBIL Score?)

Yes, it is possible to get a personal loan with a low or no CIBIL score. However, it comes with certain trade-offs or sanctions. If your CIBIL score is low or if you don’t have one at all, lenders may still consider your application if you show a stable income, low debt, or provide extra documents.

You can also apply with a co-applicant or guarantor who has a strong payment history to improve your chances. Alternatively, you can consider a secured loan. Some lenders may ask for collateral like gold or a vehicle to reduce their risk. However, be prepared for higher interest rates, stricter checks, and smaller loan amounts.

How to Check Your CIBIL Score (Free & Regularly)

You can check your CIBIL score for free through several channels:

  • CIBIL website: You can get one free CIBIL report every year through the official CIBIL website. Simply enter your details, add your PAN, answer a few questions, and download your report. You can also check via other credit bureaus, like Experian, Equifax, CRIF High Mark, and TransUnion.
  • Bank apps: Many banks show your updated credit score every month inside their app or portal.
  • Third-party websites: Some NBFCs and fintech platforms offer free CIBIL score checks in exchange for basic contact details.
  • Tata Capital’s credit score tool: You can also use Tata Capital’s online tool to check your CIBIL score for free. Enter your personal details, PAN number, and address, and click on ‘Submit.’
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FAQs

What is the minimum credit score for a personal loan from Tata Capital?

You should have a minimum CIBIL score of 750 to secure a personal loan from Tata Capital.

Is a CIBIL score of 700 good for a personal loan?

Yes, a score of 700 is decent. However, you may get higher interest rates or stricter terms depending on the lender's policy. A score above 750 is usually better.

Can I get a personal loan if my CIBIL score is below 650?

Yes, you can get a personal loan if your CIBIL score is below 650. However, it may be harder. You might have to show strong income, add a co-applicant, or accept higher interest rates.

How can I check my CIBIL score for free?

You can check your CIBIL score for free using the CIBIL website, your bank app, or Tata Capital's free online credit score tool.

Does checking my CIBIL score affect it?

No. Checking your CIBIL score yourself is a soft inquiry and does not affect it.

What other factors besides CIBIL score affect personal loan eligibility?

Besides the CIBIL score, lenders also consider other eligibility criteria, such as your income, employment and financial stability, existing debts, credit utilisation, and overall credit mix.

How quickly can I improve my CIBIL score?

It usually takes 3-6 months of timely payments, low credit usage, and disciplined borrowing to see noticeable improvement in the CIBIL score.

 

What is a good credit score range for a personal loan?

A score of 750 and above is considered good and improves your chances of getting better rates and faster approval.

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