Access to loans has become an important part of managing both planned expenses and unexpected financial needs. Whether it is a personal loan for medical costs, education, or celebrations, or a home or business loan for long-term goals, eligibility plays a key role. One crucial factor lenders review when applying for a personal loan – CIBIL Score, which reflects how responsibly you manage borrowed money.
Understanding the minimum credit score for loan approval helps you plan better and avoid rejections. Generally, a higher score improves your chances of approval and helps you secure lower interest rates and flexible repayment options. Most lenders prefer applicants who meet the minimum CIBIL Score for loan, as it signals financial discipline and reliability, making borrowing smoother and more affordable.
Why does your credit score matter when you’re looking to take a loan
Your credit score gives lenders a quick summary of your past borrowing behaviour and repayment habits. It helps them assess risk and decide whether to approve your application. A strong credit score for personal loan approval shows that you repay EMIs on time, maintain healthy credit usage, and manage existing debts responsibly.
Lenders rely on this score to decide interest rates, loan amount, and tenure. Meeting the CIBIL Score required for personal loan eligibility often means faster approvals and better loan terms. A lower score, on the other hand, may result in higher interest rates or reduced loan limits.
That said, your credit score is not the only deciding factor. Income, employment stability, location, and current liabilities are also considered. Still, maintaining at least the minimum CIBIL Score for personal loan significantly improves your chances of receiving favourable loan offers.
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
When applying for a personal loan, your individual credit score is one of the most important factors lenders consider. Ideally, a score of 700 or above improves your chances of getting approved for a collateral-free personal loan at a competitive interest rate. If your credit score falls between 600 and 700, some lenders may still consider your application, especially if you have a stable income and a good repayment track record. However, you may be offered a lower loan amount or a slightly higher interest rate. This applies whether you are a salaried individual or self-employed—including professionals like doctors, CAs, and engineers, or non-professionals such as traders and freelancers. In all these cases, it’s your personal credit score that lenders rely on—not a business credit score.
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.
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