What Should be the CIBIL Score for Personal Loan?

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Personal loans have a unique feature of coming into the picture first, when facing a financial crisis due to emergency of any kind or even a long planned and well – thought over expense. Personal loans are a helpful tool in case of medical urgency or even to redo your living room. No one from the lending institute would ever come back and ask you about the area of usage of the disbursed funds. The absence of any kind of collateral or a security also makes personal loans one of the highest selling asset products offering by any reputed bank or a financial institution.

Credit Score

Next step is to obviously choose from the various options available around us. Nowadays, the lending institutes try to aggressively sell the loans. Remember the last time your friends about receiving another call from a loan department and getting bothered! However, you need to research on seeking feedback about the lowest interest rates and low turn-around time for processing of loan application.

Once you have chosen about the loan amount and the institution where you will be borrowing from, you need to adhere to the eligibility criterion monitored by the borrowing institution. Among the other documentary requirements, one check is completed from the bank’s end – CIBIL score.

What is a CIBIL score?

CIBIL is the abbreviated notation for The Credit Information Bureau (India) Limited.  CIBIL happens to be an agency which provides credit history and associated reports linked to any individual or even a commercial set ups. CIBIL agency possesses records and details of your loan of any kind or credit cards even. This being an independent agency, helps to provide the most sought after platform by banks and other Financial Institutes, the credit worthiness of a possible lender. It reflects the history of lending by an individual and the associated repayment history.  Any EMI skip or settlement of a long standing overdue for any loan account or credit card by an individual gets captured in the CIBIL scores. Data available on CIBIL gets updated every month with the help of submission of information by various lending institutes.

Good CIBIL score


CIBIL scores typically range from 300 to 900 for a person having any kind of credit history, 300 being the lower end of the score range. In order to be considered eligible for a personal loan, lending institutions look for a safe CIBIL score between 750 and 900 of the borrower. One might question in this scenario, whether a person having no credit history of any kind stands a good chance to get his loan application processed? The response is – NO. The reason behind this is the lenders are no really sure whether you really possess an appetite for credit at all.

You might have a pertinent question post the above information. Why such a high CIBIL score requirement for seeking a personal loan? Simple explanation would be the boon of personal loans –i.e., not seeking collaterals, becomes the bane for the lender. Personal loans have been considered by all lending institutions being an unsecured asset type hence making them very risky. A high CIBIL score would direct the lending institutions to ascertain whether a lender possesses a habit of a disciplined repayment.

Nowadays, CIBIL allows any individual to check his/her credit scores online post submission of a small fee. A tentative lender can check his score directly in case he is unsure about the same. The latter situation is desirable in such a case, since a rejection of any kind of loan application can further bring down the credit scores. On the other hand, a good credit score of 750 and above can help you negotiate better terms with any lending banks/institutions.

In situation where your loan application has been rejected by any bank due to a bad credit score, it is prudent not to apply for a loan immediately at some other organisation. First and foremost, one should check the CIBIL report in details and work towards clearing dues or unattended loan/credit cards.

An individual has to practise to be careful and disciplined while managing loans and credit cards. This can serve a long way to achieving the financial goals in the long term.


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