Applying for a personal loan involves considering different things by lenders like your monthly income, age, your existing financial commitments and the type of your employment. However, what is most important is your CIBIL score for personal loans that play a significant role in loan approval. Therefore it is important that you should maintain good CIBIL scores to make the loan application approval process fast. Hence we will discuss if my CIBIL score is 600 can I get personal loan?
For personal loans, most lenders check a credit score of between 750 to 900 on average. Typically, lenders wants 750 or more as good because they want to make sure that the person taking the loan can repay it within the agreed time. In India, we have four main credit bureaus – TransUnion CIBIL, Experian, CRIF High Mark and Equifax that provide information to help them decide. They use different criteria to analyse your creditworthiness and enable them come up with better informed decisions.
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What is CIBIL Score and how it impact on loan application?
The CIBIL score is three number digit that CIBIL represents the degree of trustworthiness for giving the loans. By covering a 300 to 900 range, the lenders can easily check the chances of an individual to repay loans. Lenders always aim to be around 900 to approve the loan. The credit history about details of loans, credit cards, their payments and defaults decide the credit score you should be given.
When applying for loans or credit cards, having a good CIBIL score is kind of like having a golden ticket. A good CIBIL score can increase the chances of approving loan or credit cards at lower rate o interest. Vice versa would also be true; which means that people with poor scores might receive more scrutiny from their potential lenders hence qualifying for expensive loans or even being denied altogether. The need to constantly track and maintain one’s CIBIL score cannot be overemphasized as it helps detect any discrepancies or problems while still at infancy stage so that one remains financially stable especially during times of seeking credit facilities.
No matter if your credit score is good or bad, it can have some significant impacts on your personal loan outlined below:
- Rejection of Applications: If your CIBIL score is low, This can prevent lenders from giving loans to you believing that you possess high risk.
- Higher Rate of Interest: If your score is 750 or above, you can get the loan easily. However you may have to pay higher rate of interest if credits core is 600 or below.
- Long Terms Loan: If you credit score is 600 or below, lenders may deny you to give a long term loan as they see you more risky.
- Less Money: A poor credit score show less cash in your account or in hand. Hence lenders may offer you less amount of loan than you need because they see you risky due to low score.
Is CIBIL score of 600 good for personal loan?
This shows that loans have been repaid late or sometimes skipped for short periods by individuals who borrow money, however they pay it back when their salary arrives. It is recommended that they consider such people as potentially defaulter, since they are often unable to settle their debts timely. There could also be cases where lenders ask for security, collateral and guarantors due to lack of trustworthiness for such people. In the case of absence of security or guarantors, lenders may charge from you a higher rate of interest. Hence you should always keep credit score up so that you don’t need to have these thing to get the loan at the time of need.
My CIBIL score is 600 Can I get Personal Loan?
When you need to buy a car or renovate your house or pay for a wedding, you can always go personal loans. If your credit is not so good, taking a loan may be a little harder. But lenders take into account other things like occupation, earnings, employment history among others. Your credit report is your financial report card which it tells people how well you have handled your finances so far. A good credit report can make lenders have confidence in giving out loans.
Despite not having a very good credit score, you can still get a personal loan. Although it might take a little more persuasion to prove the lenders that you are less risky and can repay their loan regularly.
- Healthy Bank Balance: Before giving the loan, lenders check your actual regular monthly income in your account that why they ask for your bank statements of past period. Consistent income showing in your account shows your capability to pay the loan timely which also increase the chances of loan approval. Hence you should always receive your salary or other income in account rather than cash.
- Income Tax Returns (ITR): Income tax return (ITR) is the one of the proof of your income. It provide the details of type of income earned during the year. Lenders always reconcile you ITR with income showing in your bank account in above step. Hence you should file your ITR every year with you actual income showing in you bank accounts. If you have filed ITR for last 3 years, the lenders may approve the loan fast.
- Proof of Income: Lenders reconcile the income showing in bank account above with proof of income for which they can ask for salary slips and form 16 for last 6 months. Form 16 is more reliable than salary slips. So if you are in job, always keep these documents safely for future loan approval.
- Proof of Employment: Appointment letter/ increment letter may also be asked by lender for verifying the employment, therefore you should always keep appointment letter ready for loan approval. It may increase the chances of loan approval.
How can I improve CIBIL score from 600 to 800 or above?
You can find the multiple ways to increase the CIBIL easily by ready this ” How To Increase CIBIL score from 600 to 750 points?”
Final Words
If someone has a credit score of 600, they may struggle to get a loan without offering a security. However, there is no need to feel bad about this situation because there are still ways that one can increase his or her chances of qualifying for such loans. For instance, one could show to lenders how trustworthy they are through providing stable earnings accompanied by an average monthly bank balance together with evidence that one pays their dues appropriately upon being subjected to a scrutiny regarding tax records like ITR. It might take some effort, but with the right moves, that loan could still be within reach.
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Frequently Asked Questions (FAQ)
A credit score is 3 digit number in the range of 300 to 900 and the credit score below 600 is considered as a poor credit score generally.
If you have credit score above 600, it is considered as a good CIBIL score.
Yes, you can get the personal loan if your score is below 600, but you may be charged a higher rate of interest.
Yes, 700 is considered a satisfactory CIBIL score to get personal loan.
You need to pay their EMIs on time and you should have only 1 or 2 credit cards as per the monthly income. You should not make any default in any payment of credit card.