If you want to procure a personal loan, you ought to cross a threshold of high credit score (CIBIL score). Although most banks and their agents tend to urge borrowers to apply for a personal loan so long as their monthly salary is above ₹25,000 a month, however, a low credit score could be a bummer. And rightly so!
Imagine you have a good salary that gets credited to your salary account at the start of every month. And you receive a phone call from a bank representative who urges you to apply for a personal loan.
You currently have no major financial commitment to meet, and are proud to have a stable job, thereby ticking all the right boxes to be able to raise a personal loan from all and sundry.
But, but, but — there is a stumbling block! And it has a low credit score. There could be numerous reasons for the same. You may be too new to the world of creditworthiness and therefore, you have yet not built a CIBIL score. Or you missed paying your credit card bills in the recent past, and it is still some time before you can undo the damage caused by it.
Nevertheless, your credit score has already suffered, thus rendering you ineligible to seek personal loan — at least on favourable terms i.e., low interest rates.
What is the Ideal Credit Score?
So, what is the ideal credit score? Importantly, what is the right score that can enable you to procure personal loan at the lowest interest rate possible.
It is worth recalling that the CIBIL score is measured in the range of 300 to 900 with 300 being the lowest and 900 the highest.
I. Above 750: When your CIBIL score is quite high, above the 750-mark, the chances of procuring personal loan at a low interest rate would be very high. When you have a high credit score, you not only get personal loan from a bank but get it at a low interest rate.
II. Between 700 to 750: Although the CIBIL score above 750 is considered exceptionally good, the range of 700 to 750 is also considered fairly good.
However, the score between 700 to 750 is good enough to get personal loan, it may not fetch you the lowest interest rate that you desire for.
III. Below 700: When the CIBIL score is lower than 700 then the chances of being offered low interest rates are grim. When the score is closer to 700 than to 650 then the bank could offer a favourable deal. However, it varies widely from lender to lender.
It is vital to recall here that when it comes to personal loan, banks are typically more finicky because it is an unsecured loan and the bar is slightly higher in comparison to the secured loans such as a car loan.
