CIBIL Score Ranges: What score do you need for a personal loan? | Mint

Personal loans can help you with financial assistance which can provide you instant cash if you are in an emergency or are in need of extra funds to cover your finances for a big event or if you just want to treat yourself with a luxurious gift. In order to get lower interest rates and your desired loan amount, your CIBIL plays a crucial role in the eligibility process. Hence, it is extremely important to understand the CIBIL score ranges so that you can make the right choice for yourself.

What is a CIBIL score?

A CIBIL score is a three digit number issued by the TransUnion CIBIL which is one of the main credit bureaus approved by the RBI. The CIBIL score reflects your credit history which is an important factor for lenders to consider your eligibility for personal loans. A good CIBIL score also improves your creditworthiness which can help you improve your overall profile.

The CIBIL score is measured between 300 to 900. The higher your score the better are your chances of getting low interest rates on your personal loan application. This is because of the reason that personal loans are unsecured loans which increases the risk for lenders in getting the money back in time. If you have a higher CIBIL score, it provides a guarantee that you are capable of repaying the loan on time as you have a good history of repaying debts on time.

How can you improve your CIBIL score?

Maintaining a healthy CIBIL score can help you get better deals on your personal loan through which you can not only fulfil your requirements but also avoid heavy financial burdens. You must also try to maintain a low credit utilisation ratio as it reflects on how you handle debts and whether you are capable of repaying the personal loan on time.

You must avoid frequent loan enquiries in order to avoid degradation of your CIBIL score. You must also understand that you can get a personal loan with CIBIL score, however, it is advisable that you calculate and plan your repayment as you may end up taking a loan which you may not be able to afford.

In conclusion, personal loans have a higher interest rate as compared to other loans in the market. Hence, always explore other options before deciding on choosing one so that you can get the best deal which aligns with your requirements. You must also understand that you can increase your CIBIL score and only constant efforts and discipline in repayments will help you improve your score gradually.

(Note: Raising a loan comes with its own risks. So, due caution is advised)