Can I Get A Loan With A Credit Score Of 650

A credit score plays a big role in deciding whether you qualify for a loan, the type of loan you can get, and the interest rate you’ll pay. A credit score of 650 sits in the fair-to-average range. It is neither poor nor excellent—it’s the middle ground where lenders may approve you for certain loans but not at the best terms. 

If you are wondering, “Can I get a loan with a credit score of 650?”, the short answer is Yes, you can—but with some limitations and higher costs compared to someone with a score of 750 or above. 

This guide explains in detail how lenders view a 650 credit score, the types of loans you can get, factors that affect approval, interest rates you can expect, and smart steps to improve your eligibility. 

Understanding a 650 Credit Score 

Credit scores typically range from 300 to 850. Here’s how a 650 fits in: 

• Excellent (750–850): Easiest approval, best rates. 

• Good (700–749): Usually favorable approval odds with competitive rates. 

• Fair (640–699): Possible approval, but lenders may charge higher rates. 

• Poor (300–639): Approval is difficult; usually need secured or alternative loans. 

With a score of 650, you’re considered fair—so while you can get loans, lenders may see you as slightly higher risk. This can affect your interest rates, approval odds, and even loan terms. 

Can You Get a Loan With a 650 Credit Score? 

Yes, you can get a loan with a credit score of 650, but it comes with certain limitations. Since 650 falls in the fair-to-average range, lenders may see you as a moderate-risk borrower. This means your approval chances are lower compared to someone with a 700+ score, and you are more likely to be offered higher interest rates. Unsecured loans such as personal loans or credit cards may be harder to qualify for, as banks prefer stronger credit histories for such products. However, you still stand a good chance of getting approved for secured loans like gold loans, loans against fixed deposits, or car loans, as these are backed by collateral and reduce the lender’s risk. 

Types of Loans You Can Get With a 650 Credit Score 

Having a credit score of 650 doesn’t completely shut the door on borrowing. While you may not always qualify for premium offers or the lowest interest rates, you can still access several loan options depending on your income, repayment history, and the type of loan you apply for. Below are the main types of loans you can get with a 650 credit score: 

1. Personal Loan 

A personal loan is one of the most sought-after options, but with a 650 score, approvals may be limited. Traditional banks may hesitate, but many NBFCs and digital lending platforms are more flexible. Expect higher interest rates—often between 14% and 24%—and a stricter check on your income stability. If approved, personal loans can be useful for managing medical bills, weddings, travel, or debt consolidation. 

2. Home Loan 

A credit score of 650 can still get you a home loan, though lenders may impose stricter conditions. You might be asked to make a larger down payment or accept an interest rate on the higher side, generally 9% to 11.5%. Having a steady income, a co-applicant with a better score, or existing ties with the bank can significantly improve your chances of approval. 

3. Car Loan 

Car loans are easier to secure because they are secured loans—the vehicle itself acts as collateral. Even with a 650 score, many banks and NBFCs will approve your application, though at a slightly higher rate of 10% to 15%. If you have a consistent repayment record and a healthy debt-to-income ratio, approval becomes much smoother. 

4. Gold Loan 

Gold loans are among the most accessible options for individuals with fair or even poor credit scores. Since they are backed by physical gold, lenders focus more on the asset’s value than on your score. Interest rates typically fall between 7% and 12%, making this one of the most affordable and hassle-free choices when you need quick funds. 

5. Loan Against Fixed Deposit (FD), Property, or Securities 

Secured loans like these rely primarily on collateral, reducing the weight of your credit score in the approval process. For example, if you pledge your FD or property, lenders are less concerned about your repayment history since they have a fallback option. Interest rates here are lower, usually 8% to 12%, making them one of the best ways to borrow with a 650 score. 

6. Instant Loan Apps and Fintech Lenders 

Digital lending platforms and fintech apps cater to borrowers with varying credit profiles, including those in the fair range. While approvals are quick and documentation is minimal, the trade-off is very high interest rates (20%–36%) and shorter repayment terms. These should be considered only for emergencies or short-term needs. 

Factors That Affect Loan Approval at a 650 Score 

Understanding these factors can help you prepare better and improve your chances of approval. 

1. Income Stability 

Lenders closely evaluate whether you have a steady income source. Salaried employees with a regular paycheck or self-employed individuals with consistent business income are seen as less risky, even with a 650 score. 

2. Employment History 

A long, stable job history with a reputed employer works in your favor. Frequent job changes or irregular employment may raise red flags and reduce your chances of loan approval. 

3. Debt-to-Income Ratio (DTI) 

Your existing financial obligations play a huge role. If a large portion of your income is already tied up in EMIs, lenders may be hesitant. Ideally, your total EMIs should not exceed 40% of your monthly income. 

4. Credit Utilization 

If you are consistently using more than 30–40% of your credit limit, it signals over-reliance on credit. This behavior can make lenders cautious, especially if you are applying for an unsecured loan. 

5. Past Repayment Behavior 

Recent repayment history carries significant weight. Even with a 650 score, if you’ve made timely payments over the last 12 months, lenders may consider you more trustworthy than someone with ongoing defaults. 

6. Collateral Availability 

For secured loans like gold loans, property loans, or car loans, collateral reduces the lender’s risk. Having valuable collateral can significantly increase your chances of approval, even if your score isn’t ideal. 

7. Existing Relationship with the Lender 

Being an existing customer—such as having a savings account, salary account, or FD with the bank—can improve trust. Banks often extend credit more easily to customers with established relationships. 

Interest Rates for a 650 Credit Score 

How to Improve Loan Approval Chances With a 650 score 

If your credit score is around 650 and you’re hunting for a loan, here are steps you can take to strengthen your application: 

• Offer a Larger Down Payment: Especially in auto or home loans, putting more money down reduces the lender’s risk. 

• Apply With a Co-Signer: A co-signer with a better credit score can boost your chances of approval and lower interest rates. 

• Pay Down Existing Debts: Reducing credit card balances can instantly improve your credit utilization ratio, which may nudge your score higher. 

• Demonstrate Income Stability: Highlight consistent income with payslips, tax returns, or employment proof. 

• Shop Around: Don’t just rely on one bank. Compare offers from multiple lenders, credit unions, and online platforms. 

Pros and Cons of Getting a Loan With a 650 Credit Score 

Pros 

• Approval is still possible across many loan types 

• Fair-credit focused lenders exist and actively serve this range 

• Options like FHA or credit union loans offer flexibility 

• A strong application can outweigh a borderline score 

Cons 

• You will likely pay higher interest rates 

• Loan terms may be stricter (shorter repayment periods, lower limits) 

• Harder to access premium credit products 

• Cost of borrowing can lock you in long-term financial strain 

Should You Wait to Improve Your Score Before Borrowing? 

This is probably one of the most important considerations. If your need for money isn’t urgent, it might be worth postponing your loan application to work on improving your credit score. Even moving from 650 to, say, 700 can make a massive difference in interest rates and loan terms. Over the lifetime of a loan, this could save you thousands of dollars. 

On the other hand, if your financial need is immediate—such as fixing your car to get to work or covering unexpected medical bills—you may have no choice but to accept a loan with slightly tougher terms. 

The decision really depends on urgency versus cost savings. 

Smart Ways to Improve a 650 Credit Score 

A credit score of 650 is a decent starting point, but it isn’t enough to unlock the best loan offers or low interest rates. The good news is that with the right financial habits, you can steadily improve your score and cross the 750+ mark, which lenders consider ideal. Below are some smart, practical ways to boost your score: 

1. Pay EMIs and Credit Card Bills on Time 

Timely repayment is the single biggest factor in improving your credit score. Set reminders, enable auto-debit, or use apps to avoid missed due dates, as even a single late payment can drag your score down. 

2. Reduce Credit Card Utilization 

Using too much of your credit limit signals over-dependence on borrowing. Aim to keep your usage below 30% of your total credit limit to show lenders that you manage credit responsibly. 

3. Avoid Multiple Loan Applications 

Every time you apply for a loan or card, lenders pull your credit report. Too many inquiries in a short period make you look credit-hungry and can lower your score. Apply only when necessary. 

4. Clear Outstanding Dues 

If you have overdue EMIs, credit card balances, or settlements, clearing them off immediately improves your profile. Negotiating with lenders to update “settled” accounts to “closed” can also positively impact your score. 

5. Maintain a Healthy Mix of Credit 

Lenders prefer borrowers with a balanced mix of secured loans (like home or car loans) and unsecured loans (like credit cards or personal loans). It shows you can handle different types of credit responsibly. 

6. Check Your Credit Report Regularly 

Errors such as incorrect loan entries or outdated balances can hurt your score. Review your report every few months, raise disputes for mistakes, and ensure accurate data is maintained. 

7. Increase Your Credit Limit (But Use It Wisely) 

Requesting a higher credit limit and maintaining the same spending level lowers your utilization ratio, which can gradually improve your score. 

8. Don’t Close Old Credit Accounts 

Long-standing accounts help build a strong credit history. Closing old cards or loans reduces your credit age, which can negatively affect your score. 

Real Impact: How a 650 score Affects Your Loan Cost  

Consider a personal loan of ₹5,00,000 with a 650 score vs 750 score: 

The difference in interest paid is nearly ₹2.3 lakh, highlighting why improving credit score or negotiating better terms matters a lot. 

Conclusion: Can You Get a Loan with a 650 Credit Score? 

Yes, loans are accessible with a 650 credit score, but terms will be less favourable compared to higher scores. By demonstrating strong income, keeping debts low, and considering secured loan options, you can improve your approval chances. If time allows, focus on boosting your credit score through disciplined financial behaviour to unlock cheaper loans and better products in the future. 

Your credit score is important, but it’s also just one part of your overall financial profile. With the right preparation and lender choice, borrowing money in India with a 650 score is definitely possible—and manageable.