Having easy access to finance via various loans helps you meet urgent needs and fulfil your goals. All loans come with their eligibility criteria, a personal loan to pay for healthcare or a wedding, a home loan to become a homeowner or a business loan to boost your firm’s growth.
To both qualify for a loan and get it on competitive terms, your credit score is a number you can’t ignore. A credit score above 750 reflects good financial health and increases your chances of getting an affordable sanction on flexible terms.
Why does your credit score matter when you’re looking to take a loan
Your credit score showcases your creditworthiness and allows your lender to judge your application as a potential borrower. It is a summation of your credit history and how responsibly you have dealt with credit in the past. Your credit score reflects your credibility since it considers things like timely repayment of EMIs, your credit utilisation, your credit inquiries, and your existing debt. A good credit score shows your lender that you are financially stable and responsible with credit.
However, do keep in mind that your credit score is not the only criteria in the process of qualifying for a loan and getting approval on your application. Other factors such as your salary, city of residence, existing debt, employer, etc., also play a part.
While a good credit score is essential irrespective of the kind of financing you are looking to avail, here are the ideal scores that can help you get a better deal on your loan.
Ideal credit score to avail a personal loan
Your credit score is a significant factor determining your eligibility for a personal loan since it is a collateral-free loan. The minimum CIBIL score for a personal loan is between 720 and 750. Having this score means you are creditworthy, and lenders will approve your personal loan application quickly. They may also offer you your chosen loan amount at a nominal interest.
While you may still be able to get a personal loan with a credit score between 600 and 700, the lower your score, the lower your approved loan amount will be. A credit score below 600 is considered inadequate for personal loans in most cases.
Ideal credit score to avail a business loan
If you are applying for a collateral-free business loan, having a credit score of 700 or more is ideal. If you are applying for a secured business loan, your loan application may be approved with a lower credit score, say between 600 and 700 too. Both these scenarios are true when you are applying for a business loan as an individual, be it a self-employed professional such as a CA or engineer or doctor or self-employed non-professional such as a trader or manufacturer.
Additional Read:How to ensure your Business CIBIL score stays above 700
However, if you are applying for a business loan as an entity, be it a Partnership, Limited Liability Partnership, Private Limited, or a closely held limited company, your business credit score matters apart from your personal credit score. In such cases your CIBIL rank or Equifax business credit score is checked by the lender.
Ideal credit score for home loans
A home loan is a secured loan as the home you are purchasing acts as the collateral. Hence, it is possible to get a home loan even if your credit score is lower than 750. Some lenders sanction home loans if your credit score is around 550 or more.
It is important to remember that the lower your credit score is, lower the loan amount might be sanctioned on approval. That is why applying for a big loan amount when your credit score is low is not advisable. In some cases, lenders provide only 65% or less of the required loan amount if your credit score is low. It would be better to improve your credit score before applying for a home loan.
Additional Read: Where to check credit score
Even though you may get a loan even if your credit score is low, it is important to realise your credit score will always be considered for loan approval. This is why it is better to have a good credit score instead of risking rejection from a potential lender, which may lower your credit score further.
Bajaj Finserv offers pre-approved offers on a variety of loans. Just share your details and check out your pre-approved offer to avail the financing you need.
CIBIL stands for Credit Information Bureau India Limited. It is a credit information company engaged in the maintenance of records of all credit-related activities of individuals and organisations.
score, the better. However, the minimum CIBIL score for quick unsecured personal loan approval is 750. It indicates that you have experience managing credit responsibly and will make payments on time.
While the minimum CIBIL Score required for the Bajaj Finserv Insta EMI Card is 720, you should aim to fortify your creditworthiness by aiming for a score of 750 or more.
To qualify for a personal loan, borrowers generally need a minimum credit score of 610 to 640. However, your chances of getting a loan with a low interest rate are much higher if you have a “good” or “excellent” credit score of 670 and above.
A credit score closer to 300 is considered to be poor for the EMI card. A credit score closer to 900 is considered to be good for the applicants. This increases the chances of sanction of EMI card to eligible applicants provided the other eligibility criteria are also met by the applicant.
Personal loan credit score requirements tend to be anywhere from 580 to 700+, with many of the best loans overall requiring a credit score of 660 or higher.
Your CIBIL score, which stays within the range of 300-900, should be equal to or above 750 for you to even stand a chance of getting approved for a personal loan by a lender. In fact, the first thing that a lender does is check your CIBIL score as soon as they receive your personal loan application.
If you're more interested in a personal loan, you could borrow up to $100,000. The best personal loans for a 770 credit score are from LightStream because they offer $5,000 - $100,000 in funding with APRs of 7.49% - 25.99% and repayment periods of 24 - 144 months.
Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.
You will need a credit score of 580 or higher for a $3,000 personal loan. Most lenders that offer personal loans of $3,000 or more require a 580+ credit score for approval, along with enough income to afford the monthly payments.
Requirements will vary across lenders. However, qualifying for a $10,000 personal loan typically requires a credit score that exceeds 640, an active checking account, and a steady, verifiable income, among other factors.
If you are interested in applying for the Bajaj Finserv Insta EMI Card, you'll need to meet some basic eligibility criteria. To apply for the card, you must be an Indian citizen between 21 years and 65 years of age with a regular source of income and a credit score of 720 or higher.
You can borrow anywhere from a few thousand dollars to $100,000+ with a 580 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
In general, lenders extend $30,000 loans to borrowers with good to excellent credit, which is typically 670 and higher. But there may be lenders who lend to borrowers with bad credit. If you're having difficulty qualifying, you may consider getting a cosigner or co-borrower to help you get approved for the loan.
What credit score do you need for a $20,000 loan? The credit score needed for a $20,000 loan varies by lender. Generally, you'll need a good to excellent credit score — 670 or higher — to qualify for a $20,000 loan.
If you have an 600 credit score, you are generally considered a subprime consumer, but it won't necessarily prevent you from borrowing money. The average FICO credit score in the United States is 714 as of 2021, and scores within the 580-669 range are considered to be “fair” credit.
It is measured on a scale between 300 and 900, with 900 indicating maximum creditworthiness. The minimum CIBIL Score required for Bajaj Finserv Insta EMI Card is 720 or above. A score of 750 or above is considered excellent and can fetch favourable terms while availing of the Bajaj Finserv Insta EMI Card.
What credit score is needed to buy a motorcycle? There's no minimum credit score required to get a motorcycle loan — but the better your credit score, the lower the APR you will qualify for with less interest paid over the life of the loan.
Getting a car loan is possible if you have a 650 credit score. Although the loan terms may not be ideal, and you'll end up paying more for the car than someone with a lower credit score, you're still eligible for a loan.
Introduction: My name is Tyson Zemlak, I am a excited, light, sparkling, super, open, fair, magnificent person who loves writing and wants to share my knowledge and understanding with you.
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