Unraveling the Mystery: Minimum CIBIL Score Required for a Personal Loan

Personal loans have emerged as a popular financial tool to meet various needs, from consolidating debt to funding emergency expenses. However, to qualify for a personal loan, lenders assess applicants’ creditworthiness primarily through their CIBIL score for a personal loan, with the CIBIL score being a vital factor. In this blog, we will explore the importance of CIBIL scores for personal loans and the minimum CIBIL score required for a personal loan.

What is the CIBIL Score?

The CIBIL (Credit Information Bureau India Limited) score, also known as the credit score, is a three-digit numeric representation of an individual’s creditworthiness. It is based on the individual’s credit history, which includes details of past credit accounts, payment history, credit utilization, and loan inquiries.

CIBIL scores range from 300 to 900, where a higher score indicates a lower credit risk. Lenders use this score to assess an applicant’s creditworthiness and the likelihood of timely loan repayments.

The Minimum CIBIL Score for Personal Loans

The CIBIL score plays a critical role in the personal loan application process. A high credit score not only increases the chances of loan approval but also helps secure a more favorable interest rate and loan terms. Conversely, a low credit score may lead to loan rejection or higher interest rates due to perceived higher risk.

The minimum CIBIL score required for a personal loan varies among lenders and depends on their risk appetite and lending criteria. Generally, a CIBIL score of 750 or above is considered good and improves the likelihood of loan approval.

Different lenders may have different minimum CIBIL score requirements based on the loan amount, tenure, and the borrower’s profile. Some lenders may offer loans to individuals with lower credit scores, but it might come with less favorable terms, higher interest rates, or stricter conditions.

Factors Affecting CIBIL Score for Personal Loan Approval

Several factors influence an individual’s CIBIL score, and understanding these factors can help applicants improve their creditworthiness:

Payment History

Payment history is the most significant factor affecting your credit score, accounting for approximately 35% of the total score. It reflects how responsibly you manage your debts and credit obligations. Timely repayment of loans, credit card bills, and other debts demonstrates that you are a reliable borrower. On the other hand, late payments, defaults, or accounts sent to collections can severely damage your credit score. 

Credit Utilization

Credit utilization refers to the ratio of your credit card balances to your credit limits. It accounts for about 30% of your credit score. A high credit utilization ratio indicates higher credit risk to lenders, as it suggests that you may be relying heavily on credit and could be stretched financially. 

Credit Mix

Credit mix represents the variety of credit accounts you have, such as credit cards, personal loans, home loans, car loans, etc. It accounts for about 10% of your credit score. A diverse credit mix shows that you can manage different types of credit responsibly. Having both secured and unsecured loans can positively impact your credit score. 

Credit Inquiries

Credit inquiries occur when you apply for new credit, such as a loan or a credit card. Each hard inquiry can have a slight negative impact on your credit score and stays on your credit report for up to two years. Multiple inquiries within a short period can signal that you are seeking credit desperately, potentially raising concerns for lenders. 

Length of Credit History

The length of your credit history is the average age of all your credit accounts. It makes up about 15% of your credit score. A longer credit history provides more data for lenders to assess your creditworthiness.

Improving Your CIBIL Score

If your CIBIL score is below the minimum required for a personal loan, there are several ways to improve it:

  • Pay Bills on Time: Timely payment of bills, loans, and credit card dues is crucial for a positive credit history.
  • Reduce Debt: Lowering credit card balances and paying off existing loans can improve credit utilization.
  • Limit Credit Applications: Avoid making multiple loan or credit card applications within a short timeframe.
  • Monitor Your Credit Report: Regularly check your credit report for errors and discrepancies that might affect your credit score.

Here are a few popular loan providers in India and the CIBIL score they require for personal loans:

Loan Provider Minimum Credit Score
Bajaj Finserv
IndusInd Bank
Yes Bank
Kotak Mahindra Bank


The minimum CIBIL score required for a personal loan can vary among lenders, but a score of 750 or above is generally considered favorable. A good credit score not only increases your chances of loan approval but also allows you to secure more favorable loan terms. To maintain a healthy credit score, it is crucial to practice responsible credit management, pay bills on time, and monitor your credit report regularly. By taking these steps, you can enhance your creditworthiness and access the funds you need through a personal loan.

Amit Arora


I am a seasoned retail banker with over 21 years of global experience across business, risk and digital. In my last assignment as Global Head Digital Capabilities, I drove the largest change initiative in the bank to deliver the end-to-end digital program with over US$1 billion in planned investment. Prior to that, as COO for Group Retail Products & Digital, I implemented a risk management framework for retail banking across the group.
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