In today’s credit-driven financial system, the CIBIL score has become one of the most important indicators of a person’s creditworthiness. Whether you are applying for a personal loan, home loan, business loan, or a loan against property, your credit score plays a crucial role in loan approval and interest rate determination.
The Credit Information Bureau (India) Limited (CIBIL), now part of TransUnion, generates credit reports and scores based on a borrower’s credit history, repayment behavior, and outstanding debt. The CIBIL score ranges from 300 to 900, with a higher score indicating better creditworthiness.
This article will provide a comprehensive breakdown of the minimum CIBIL score required for different types of loans and how it affects loan approval in India.
What is a Good CIBIL Score?
Before diving into loan-specific requirements, here’s a general classification of CIBIL score ranges:
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750 – 900: Excellent – Most preferred by lenders; higher chances of loan approval at low interest rates.
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700 – 749: Good – Eligible for most loans; may not always get the best interest rate.
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650 – 699: Fair – Eligible for some loans, but with higher interest rates.
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550 – 649: Poor – Difficult to get unsecured loans; only some NBFCs may consider.
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300 – 549: Very Poor – High risk for lenders; chances of rejection are very high.
Minimum CIBIL Score Required for Different Types of Loans
1. Personal Loan
A personal loan is an unsecured loan, meaning you do not have to provide any collateral. Since the risk for the lender is higher, the importance of a good credit score becomes more significant.
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Minimum CIBIL Score Required: 750 and above
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Ideal Range: 750–900
Lenders look for a high credit score to ensure that you have a consistent history of repaying your past debts. If your score is below 700, most major banks may reject your application or charge a higher interest rate.
Tips:
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Reduce your existing debt.
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Avoid multiple loan applications at the same time.
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Pay credit card bills and EMIs on time.
2. Home Loan
A home loan is a secured loan, where the purchased property itself serves as collateral. Lenders still look at your CIBIL score to gauge your repayment capacity and to offer you better interest rates.
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Minimum CIBIL Score Required: 700 and above
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Ideal Range: 750+ for best interest rates
Some banks may offer loans even with a credit score of 650, but the interest rate will be higher, and you may be asked for additional documentation or a higher margin contribution.
Impact of Score on EMI: A borrower with a score of 800 might get a home loan at 8.5%, while someone with a score of 650 may get it at 9.5% or more — a difference that significantly affects the total cost over 20 years.
3. Loan Against Property (LAP)
A Loan Against Property is another form of secured loan, where you mortgage your residential or commercial property. Since the loan is backed by a tangible asset, lenders may be slightly more flexible with credit scores.
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Minimum CIBIL Score Required: 650–700
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Ideal Range: 700–750+
Even though the loan is secured, your credit score helps the lender understand your repayment behavior. A good CIBIL score can lead to a higher loan amount (higher LTV ratio) and better interest rates.
Note: The value of your property, income stability, and repayment capacity also play a major role in LAP eligibility along with CIBIL.
4. Business Loan
Business loans can be secured or unsecured, depending on the loan amount and nature of the business. Lenders typically look at the CIBIL score of the business owner or directors in the case of small businesses or proprietorships.
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Minimum CIBIL Score Required: 700 and above
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Ideal Range: 750–800+
If your business has limited documentation, a good CIBIL score becomes even more important. NBFCs may consider applications with scores as low as 650 but will charge higher interest rates or demand collateral.
Additional Factors:
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Business turnover
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GST returns and ITRs
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Stability of business operations
5. Auto Loan
An auto loan is a secured loan offered for the purchase of a new or used vehicle. Since the vehicle itself serves as collateral, lenders are more lenient with CIBIL score requirements.
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Minimum CIBIL Score Required: 650 and above
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Ideal Range: 700–750+
Applicants with a low score can still get a car loan, but with stricter terms such as higher down payment or shorter tenure. Having a co-applicant with a good score can also improve your chances.
6. Education Loan
For education loans, the credit score of the student may not be applicable if they do not have a credit history. In such cases, the CIBIL score of the co-applicant (usually a parent or guardian) is considered.
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Minimum CIBIL Score Required (for co-applicant): 700 and above
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Ideal Range: 750+
Good credit history of the co-applicant ensures higher chances of approval, especially for large loan amounts or studies abroad.
Can You Get a Loan with a Low CIBIL Score?
Yes, you can get a loan with a low CIBIL score, but it comes with conditions:
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Higher interest rates
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Lower loan amounts
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Stricter repayment terms
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Need for co-applicants or guarantors
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Loans from NBFCs or private financiers
For secured loans like LAP or gold loans, some lenders are more flexible. However, a poor score might still reduce your LTV ratio.
Tips to Improve Your CIBIL Score Before Applying for a Loan
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Pay EMIs and Credit Card Bills on Time – Delay in payments negatively impacts your score.
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Keep Credit Utilization Low – Try to use only 30–40% of your credit card limit.
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Avoid Multiple Loan Enquiries – Too many applications in a short period lowers your score.
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Maintain a Healthy Credit Mix – A balance of secured and unsecured loans is better.
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Monitor Your Credit Report Regularly – Dispute any inaccuracies or errors with CIBIL.
Conclusion
The minimum CIBIL score required for different loans varies depending on the loan type and lender’s policies. However, maintaining a score above 750 improves your chances of approval, helps you secure better terms, and enhances your financial credibility.
If your score is currently low, focus on improving it before applying for a major loan. For users in Delhi NCR or across India who need guidance on improving their CIBIL score or want to apply for loans with the best terms, Loan7d.com offers expert assistance, tailored loan advice, and support in fixing credit issues.
Whether you're planning to buy a home, expand your business, or handle urgent expenses, knowing where your CIBIL score stands is the first step toward financial success.