Are you wondering if it is possible to get a personal loan for CIBIL score of 550? A bank, an NBFC, or even an instant loan app, considers credit score one of the most important factors when approving funds. This score ranges from 300 to 900. The higher the score, the greater the likelihood of eligibility. A score of 550 to 600 is typically regarded as low and insufficient to meet the personal loan eligibility criteria.
What is a personal loan?
It is an unsecured, multipurpose loan with no end-use restrictions. As a result, you can put the loan money towards any financial need. Several borrowers use this collateral-free loan to meet emergency needs such as medical expenses, home improvement/repair, children’s educational expenses, large-ticket purchases, travel, wedding loan, etc.
A) Eligibility requirements
Because it is an unsecured loan, banks and NBFCs carefully examine your credit history, income, existing financial liabilities, employment history, and other factors before deciding whether or not to lend. Because the lender does not require any security to provide funds, it examines your financial situation.
Borrowing amounts for a personal loan usually range up to Rs. 25 lakh.
This loan is only available to salaried individuals. However, a few lenders may extend the service to self-employed individuals.
To be eligible for this loan, you must have a CIBIL score of 750 or higher.
B) Personal loan with a CIBIL score of 550
A personal loan with a CIBIL score of 550 is only available from a few lenders. This is because a credit score of 550 is insufficient to qualify for an unsecured loan. You should look into all of the available offers from lenders who provide low credit score personal loans. However, you may be charged a high rate of interest owing to the low CIBIL score.
What should you know about CIBIL score 550?
Your credit score can be affected by financial transactions such as EMI payments, credit card bill payments, missed/delayed payments, account closures, and more. As a result, your personal credit score is not a fixed figure. It may rise and fall with each of the transactions above. Your credit score of 550 indicates that you’ve made a few regular payments, but you’ve also defaulted/missed a few.
After all, your credit score is a reflection of your credit history. It is one of the most important factors used by lenders to determine your creditworthiness.
Can you get a personal loan for CIBIL score of 550?
A credit score of 550 is insufficient to qualify for a personal loan from a major bank or NBFC. Most banks will consider your personal loan application if you have a credit score of at least 750.
How to improve your CIBIL score?
It is critical to follow the tips listed below to improve your credit score:
1. Always pay your credit card bills on time and in full.
2. Pay off any existing debts.
3. Do not apply for more than one credit card at the same time.
4. Maintain a credit utilization ratio of less than 30%.
5. Keep the old account information to lengthen the credit history.
6. Examine your credit report at least twice a year.
7. Submit a query right away if any information on your CIBIL report is incorrect.
Regardless of whether other eligibility criteria are met entirely or not, it is clear that getting approval for a personal loan for CIBIL score of 550 is difficult. As a result, it is preferable to develop good financial habits in order to improve this score and overall eligibility.
Read Also: How To Get a Personal Loan When Your CIBIL Score is Low