Are you looking for a personal loan and wondering how to secure a low interest rate? Your CIBIL score plays a crucial role in determining the interest rate you will be offered.
A personal loan has become a popular choice for meeting various financial needs. However, the interest rate is a crucial factor to consider. Your CIBIL or credit score is pivotal in securing a low-interest personal loan.
Most banks and lending institutions require a minimum monthly salary of Rs 25,000 for a personal loan with low interest. Your credit score holds significant weight in this process, and a low score can create obstacles to obtaining favorable loan terms.
Several factors can contribute to a low credit score, such as having limited credit history or recent missed payments on credit obligations.
It takes time to recover from these setbacks. So, what should be your ideal CIBIL score to secure a personal loan at a low interest rate?
Your CIBIL score ranges from 300 to 900, with 300 being the lowest and 900 the highest. Here’s what each range signifies:
Above 750: A CIBIL score above 750 significantly increases your chances of qualifying for a personal loan with a low interest rate. You will likely secure a loan with a high credit score at a lower interest rate.
Between 700 and 750: While a score above 750 is considered excellent, a score between 700 and 750 is also regarded as good and can help you qualify for a personal loan. However, the interest rate may not be as competitive as with a higher score.
Below 700: If your CIBIL score falls below 700, you may encounter challenges securing a personal loan with a low interest rate. Lenders may offer less favorable terms when the score is closer to 700 than 650. However, this can vary among different lenders.
It’s important to note that banks are often cautious when providing personal loans. These loans are unsecured in nature, posing a higher risk compared to secured loans such as car loans.