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What is the minimum CIBIL™ Score for availing SBI Car Loans?

SBI has set minimum CIBIL™ score criteria of 750 for getting a car loan approved. So, for availing an SBI car loan, make sure that you have a CIBIL™ of 750 or higher, otherwise, your loan application could be easily rejected.

A good CIBIL™ score is favourable for SBI as it helps in eliminating borrowers with a high loan default risk. It helps them in evaluating not only the creditworthiness of the borrower but also their future debt repaying capability.  This helps in them selecting only the more viable and prudent borrowers for granting SBI car loan.

CIBIL™ Scores and SBI Car Loans

Funding is an integral aspect of meeting your financial requirements either through a personal loan, a vehicle loan, home loan or a business loan. SBI, the leading nationalized bank in India provides various car loans to suit your varying vehicle requirements. For ensuring that you get fast access to an SBI Car Loan, ensure that you have the requisite CIBIL™ score as specified by the lenders. This score helps SBI in assessing your creditworthiness before granting approval to your car loan application.

What is the importance of CIBIL™?

Credit Information Bureau (India) Limited or CIBIL™, an authorized credit bureau in India, was established in 2000 to be at the forefront of India’s lending scene. The company was founded with the main purpose of giving protection to lenders from high-risk and unruly borrowers who do not maintain financial discipline and are prone to default on their loans or credit card payments.

CIBIL™ works by recording, collating, analysing and evaluating the data of individuals received from the lenders. This data which is based on the past credit information of the customer is then carefully presented in the form of a credit report showing the CIBIL™ score. The CIBIL™ score helps banks and financial institutions in evaluating the creditworthiness of the borrower’s potential loan repaying capability so as to decide whether or not to approve their loan application.

The CIBIL™ report and CIBIL™ score also hold relevance for customers also as it helps them in assessing their credit standing for potential loan or credit card approvals. In case of a low CIBIL™ score, they can work towards improving it or any corrections for inaccuracy can be corrected in the credit report improving their credit standing and chances for getting approvals of loans, including SBI Car Loan. So, CIBIL™ has an important role to play in the overall lending business in India.

What is a good CIBIL™ Score?

CIBIL™ score reflects a 3-digit number summary of your credit information which showcases your creditworthiness. CIBIL™ score is normally in the range of 300-900 with a score of 900 being the best score.

  • A CIBIL™ score in the range of 750 - 900 is considered a good credit score highlighting the financial discipline on the part of the borrower.
  • Any CIBIL™ score which is between 550 – 700 is considered an average score implying the borrower shows a moderate level of sound financial behaviour.
  • A CIBIL™ score between 300 – 549 implies a borrower with a poor credit history implying banks will not consider the debt approvals of such a borrower with their loan application getting duly rejected.

The higher the CIBIL™ score, the higher are your chances of getting a hassle-free loan with additional benefits.

Why is the CIBIL™ score important for getting an SBI car loan?

CIBIL™ score is a reflection of your credit history especially your debt repayment details like your current debts, past loan repayment pattern, number of credit cards held etc. Having a good CIBIL™ score will give lenders confidence in your creditworthiness including your potential debt repaying capability. As a high CIBIL™ score indicates that you have maintained financial prudence while handling your debts, SBI can assure itself of your being a low-risk category before disbursing a car loan. So, the CIBIL™ score protects SBI from high-risk borrowers and helps them to take sensible decisions before final approval of the car loan.

What are the common reasons for your SBI car loan getting rejected?

Some common reasons for your SBI car loan getting rejected could be 

  • Past Debt Defaults – If you have a history of past defaults or have filed for bankruptcy, then your CIBIL™ score is likely to be on the lower side increasing your risk of loan approval.
  • Insufficient Income – If you do not possess the minimum income requirements as per SBI guidelines, then your loan will get rejected.
  • Multiple loans – If you already have several loans and credit cards at your disposal, then SBI would not consider you an ideal candidate for availing a car loan. The reason being multiple debts are considered a high-risk option by lenders as this indicates borrowers already have various debt obligations to fulfil, increasing the risk of default.

How to improve CIBIL™ score for availing SBI Car Loan?

  • Pay all debt including credit cards dues in full 
  • Do not go for multiple loans at one time
  • Do not apply for more than one loan or credit card at a time
  • Check for accuracy in your personal particulars and get any inaccuracies corrected at the earliest.

FAQs

1. What is the importance of the CIBIL™ score for getting a car loan from SBI?

SBI has declared a minimum CIBIL™ score of 750 for procuring a car loan. So, when you want to take a car loan from SBI, ensure that you have a high CIBIL™ score. Else, your loan application may get rejected.

2. How does the CIBIL™ score affect car loan?

Your CIBIL™ score affects your eligibility for a car loan in the following ways:

  • Approval of the car loan: The CIBIL™ score and the other credit scores offered by the other 3 credit bureaus indicate your creditworthiness. Higher the CIBIL™ score, the higher your chances of getting a loan. The CIBIL™ score helps in evaluating your eligibility to receive loans based on your repayment history.
  • Interest rate of the car loan: The closer your CIBIL™ score is to 900, such as 750, the higher your chances of getting lower interest rates.
  • Car loan amount: Lenders will give you a higher loan amount based on your CIBIL™ score. If your CIBIL™ score is high and closer to 900, then you may even get 100% financing. On the other hand, lenders may not be ready to give you the desired loan amount if you have a low CIBIL™ score. When your CIBIL™ score is low, it means that your repayment history is not good and giving you a high loan amount puts the lender at risk.

3. How to improve the credit score for car loans?

You can take the steps below to improve your credit score.

  • Know your credit score
  • Check your credit report
  • Raise a dispute with the credit bureau to correct the errors.

4. Can I get a car loan with a low CIBIL™ score?

Yes, you can get a car loan with a low CIBIL™ score. But, you will have to prove to the lender that you have a stable source of income and also may have to settle for a lower loan amount and a higher interest rate.

5. Can I do a free CIBIL™ score check on the TransUnion CIBIL™ website?

Yes, you can obtain your CIBIL™ report from the TransUnion CIBIL™ website once a year for free and this report will contain your CIBIL™ score.

Disclaimer

The 4 credit bureaus- CIBIL™, Equifax, Experian, and CRIF highmark offer credit scores in India. The points mentioned above are true for credit scores from any bureau, not just CIBIL™.

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