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Many banks/Non Banking Financial Institutions (NBFCs) consider 750 or above to be the best CIBIL score for loan approvals. The CIBIL score of an individual is one of the main things that a lender takes into consideration since it is an indicator of the loan repayment capability of an applicant. A high CIBIL score means that the borrower can repay a loan as per the repayment terms without any hassles. A poor or a low CIBIL score, on the other hand, will give the lender the impression that the applicant may have difficulties in paying a loan or he/she can even default on it.

CIBIL Score Range and its Meaning

CIBIL scores are interpreted in a similar fashion by almost all of the lenders. The various CIBIL score ranges are assigned specific grades by CIBIL itself. Additionally, a CIBIL score in any of the ranges specified below could mean different things for the application of an individual. Let us now take a look at the various CIBIL score ranges, the grades assigned to them and their meanings.

CIBIL Score Range

Grade

Loan Approval Chances

What Does It Mean?

750-900

Excellent

High

The applicant has an excellent repayment capability and can honour the EMI commitments fairly easily.

700-749

Good

Good

The applicant can repay his/her loans in a timely manner.

650-699

Satisfactory/Fair

Possible

The applicant may just be able to repay his loans as per the repayment terms.

600-649

Doubtful

Low

The applicant may face difficulties in repaying his/her loan on time

Below 600

Urgent action required

Very Low

The applicant may have major difficulties/struggle to repay his or her loan on time. Chances are that the applicant may default on the loan too.

To check more details about CIBIL score ranges, you can read our article CIBIL Score Ranges

Importance of a Good CIBIL Score When Looking for a Loan

A CIBIL score is basically an indicator of the repayment capability of the applicant. Additionally, it also paints a picture of their financial management skills. A CIBIL score of 750 or above signifies that the lender has repaid, or is currently repaying his/her debts in a timely manner and responsibly. A CIBIL score in that range also tells the lender that the applicant uses the credit limit available to him or her wisely. A CIBIL score of around 600 or below, on the other hand, tells the potential lender that the applicant has struggled with loan/credit card payments in the past and the same thing may happen again. A CIBIL score of 750 or above can help an individual get funding from lenders easily, while a CIBIL score that is not considered to be good can cause the rejection of the loan. Hence, it can be safely said that a CIBIL score can decide the fate of the loan application of an individual.

Minimum CIBIL Scores for Different Types of Loans

Many formal Indian lenders consider a CIBIL of 750 or above to be a good CIBIL score for loan approvals. Lending institutions can, however, even grant a loan to an individual that has a CIBIL score of around 600, as it is considered to be the minimum CIBIL score for loan sanctions. Let us now look at the minimum CIBIL score requirements for each type of loan.

Personal loans: Since personal loans are collateral-free, lenders say that a CIBIL score of anywhere between 720-750 is the minimum CIBIL score for personal loan approvals. Individuals with CIBIL scores of around 600 can get a loan from a bank too, but they will get it at a higher interest rate and/or a shorter loan repayment tenure.

Business Loans: Business loans can either be secured or unsecured forms of credit. In the case of secured business loans, the applicant/business owner can get a loan even if their CIBIL score is in the range of 600-700. If the applicant/businessperson is going for an unsecured business loan, they must have a CIBIL score of 750 or above.

Home Loans: As Home Loans are secured forms of loans, the applicant can get one even if their CIBIL score is under 600. However, people with low CIBIL scores also tend to get a very low amount as house loans. Additionally, such applicants may have to pay a higher amount as interest too because low CIBIL scores may make the lender question the overall repayment capability of the applicant. To know more in detail you can read our article CIBIL score for home loan.