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How important is a CIBIL™ credit score in order to apply for a personal loan?

Your CIBIL™ score is one of the most important factors in being approved for a personal loan. This is because personal loans are unsecured loans (do not require collateral) and are generally more risky for banks than home loans or auto loans - which have the home or vehicle as collateral. Lenders therefore look at your credit score and credit report to evaluate if you are a responsible borrower.

A credit score ranges from 300 to 900. A borrower should have a minimum score of 750 in order to be eligible for a loan.

CIBIL™ is one of the four authorized credit bureaus in India which provide a credit score, the others being Equifax, Experian and CRIF High Mark.

Additional Reading: Personal Loan For Low Credit Score

What are some of the other factors influencing sanction of a personal loan?

Before sanctioning of the personal loan a lender looks also looks at the annual income of the borrower, profile of the company, current loan commitments, among other factors.

What can I use my personal loan for?

This personal loan can be used for any reason. All personal expenses a person wants to make can be made available by applying for a personal loan. This could vary from wedding expenses to hospital expenses or home renovation or even a vacation. There is no restriction on how you use the loan amount.

What are the interest rates?

The interest rate for personal loans varies from lender to lender. In general, interest rates on personal loans are some of the highest among all kinds of loans since there is no collateral that can be used by the lender in case of default. Other factors that influence the interest rate are also the credit history of the borrower and the amount that is being borrowed.

I have a low CIBIL™ score. What should I do to improve it?

  • Make all your EMIs and credit card payments on time, and in full.
  • Always keep your balances low. Do not spend more than 50% of your total credit card limit.
  • Review your credit history periodically by obtaining a copy of your credit card, so that you are aware of your credit situation and take steps to improve it

Is it good to have zero credit? (i.e. No loans or credit cards)

Therefore, while there is no fixed minimum CIBIL™ scoreto apply for a card, it is recommended that you ensure that you have a score of at least 750 before you apply for a card. If you have a low score, there is a high chance that your application will be rejected, and each rejection causes your credit score to drop even further.


1. Can I get a personal loan with a CIBIL™ score of 650?

A high CIBIL™ score of 750 or above is ideal for all types of loan applications. If you have a credit score of 650 or less, it may lead to the refusal of your loan application. The lender may charge a high-interest rate since such a score is considered risky. The lender also considers your capacity to repay the loan and this is determined by your credit score along with other factors like stable monthly income, bank balance, and job security.

2. What is the minimum CIBIL™ score required for HDFC personal loan?

The CIBIL™ score should be between 700 to 750. Personal loans are unsecured loans, and the CIBIL™ score helps in getting the personal loan approved. HDFC and other banks are sanctioning loans for people with scores of 700 to 750, or higher. For the exact criteria and more information please visit the HDFC bank website.

3. How much personal loan will I be approved on my salary?

There is no standard income parameter to judge your suitability for a loan. The lender will probably check your repayment history - whether you have defaulted in the past, whether you are currently repaying any other loan apart from the loan that you are applying to now. A few important things to keep in mind are:

  • Approach the bank or lending institution directly.
  • Keep your credit score above 700


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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