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.
FAQs
Ideal credit score to avail a personal loan
What credit score is required for Bajaj personal loan? ›
One vital aspect that influences personal loan approval is your CIBIL Score. A CIBIL Score of 685 or higher is needed in order to qualify for a Bajaj Finance Personal Loan.
What should be the credit score to get a Bajaj EMI card? ›
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.
How much credit will I get in Bajaj Finserv? ›
The Bajaj Finserv Insta EMI Card comes with a pre-approved credit limit of Rs. 3 lakh, which is the maximum amount you can spend using the card. This credit limit is determined based on factors like your CIBIL score and if you have a regular source of income.
What is the ideal credit score for a loan? ›
While lenders vary in their requirements, you're more likely to get the best loan terms if your score is in the "good" category or higher, meaning at least 670. 1 But even if you have only a "fair" score, which starts at 580, you may be able to obtain a personal loan from some lenders.
How much loan can I get with a 650 credit score? ›
You can borrow as much as $40,000 - $100,000+ with a 650 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.
What credit score is needed for a 20000 personal loan? ›
Generally, you'll need a good to excellent credit score — 670 or higher — to qualify for a $20,000 loan. The higher your credit score, the better your chances of qualifying for a loan and securing a lower interest rate.
Who is eligible for Bajaj Finserv EMI? ›
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.
Is a Bajaj Finserv loan safe? ›
Is a Bajaj Finserv loan safe? Yes, a Bajaj Finserv loan is a safe loan to borrow as Bajaj Finserv follows strict lending guidelines. Bajaj Finserv offers ample features through its secured and unsecured offerings and doesn't levy any hidden charges.
Does Bajaj Finserv require down payment? ›
Shop all you want with zero downpayment - Bajaj Finserv.
Bajaj Finance has TTM P/E ratio 30.59 as compared to the sector P/E of 28.91.There are 31 analysts who have initiated coverage on Bajaj Finance. There are 14 analysts who have given it a strong buy rating & 9 analysts have given it a buy rating. 3 analysts have given the stock a sell rating.
What is Bajaj Finserv limit? ›
Features & Benefits. Offers. Partner Stores. ✓ 1 Mn+ products on EMI ✓ Loan limit of up to ₹3 Lakhs | Get the EMI Card today! APPLY NOW.
What is the minimum deposit in Bajaj Finance? ›
Minimum deposit starting from Rs. 15,000. Higher FD rates for special tenure of 18, 22, 33, 42 and 44 months.
What credit score do I need for a $5000 loan? ›
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.
What credit score do I need for a $10,000 loan? ›
To increase your chance of qualifying for a $10,000 unsecured loan, you should have a credit score of 600 or higher. Some lenders start their minimum credit score requirements at 600, however, there are some lenders that require a credit score in the high 600s or low 700s.
What credit score do I need for a $40,000 loan? ›
Qualifications for a $40,000 personal loan
Most lenders evaluate the following before making a lending decision: Credit: Your credit score shows how well you have handled past borrowed money. To qualify for a $40,000 loan, you'll typically need a credit score upwards of 670 or a co-signer with good or excellent credit.
What is the credit rating of Bajaj Finance? ›
Company Rating. The company has been assigned Long Term Issuer Credit Rating of 'BBB-/Stable' and Short Term Issuer Credit Rating of 'A-3' by S&P Global Ratings.
Can I get personal loan with 600 credit score? ›
The answer is yes, but it may not be easy. Lenders might be willing to extend personal loans to individuals with a score of 600, but there are a few things you should keep in mind: Higher interest rates: Expect to be offered a loan with a higher interest rate compared to someone with a better credit score.
Can I get a personal loan with a 650 credit score? ›
Yes, a 650 credit score is typically considered fair and you can qualify for loans, but the terms and interest rates may not be as favourable for you compared to those with higher scores.
Does Bajaj Finance give a personal loan? ›
We offer personal loans across more than 3,000 cities in India, with minimum salary requirement starting from Rs. 25,001. These requirements vary based on your city of residence. Click here to check the list of cities in which we offer a personal loan. Bajaj Finance offers personal loans of up to Rs. 40 lakh.
