Personal Loan for CIBIL Score 650

The significance of your CIBIL score cannot be overstated, as it heavily influences lending institutions' assessment of your suitability for a loan and impacts the loan amount, interest rate, and repayment terms. Securing a personal loan for a CIBIL score of 650 may pose a challenge, as lenders generally consider this score to be below the desired level for unsecured credit options such as personal loans. Nonetheless, it is not an entirely insurmountable task. 

Non-Banking Financial Companies (NBFCs) sometimes offer more flexibility than traditional banks and may approve loans for those with lower credit scores.

If you need a loan with a 650 credit score, there are several options available to you. However, in the meantime, it is important to understand how to improve your CIBIL score. Here you can find all of the important information.

How to Get a Personal Loan with a CIBIL Score of 650?

To get a Personal Loan with a CIBIL Score of 650, complete the steps outlined below:

  • Before applying for a loan, it is important to check your credit report and score for accuracy. If you find any mistakes, contact your creditor and the credit bureau to have them corrected before submitting your application.
  • Check for eligibility criteria of different lenders. Also, check out the lenders' minimum income requirements and served provinces as well.
  • To get pre-approved for a bad credit personal loan, fill out the applications to receive estimates of interest rates, loan amounts, and terms you qualify for.
  • To proceed with a loan application, you may be required to provide documents like a government-issued ID and bank statements.
  • After verifying your identity and income, your lender will provide you with a loan offer. Carefully review the loan agreement before signing the contract. Once signed, you can expect to receive the funds in your bank account within 2-5 business days.

Personal Loan Options for a CIBIL Score of 650

For a CIBIL score of 650, personal loan options are limited but not impossible. NBFCs and secured loans are potential options, as well as banks that may offer loans with higher interest rates. Having a co-applicant with a higher credit score can also improve eligibility. Thorough research and comparison of lenders' terms and conditions are important.

Eligibility Criteria for Low Credit Score 650

To be eligible for a personal loan with a credit score of 650:

  • Age between 21 and 60 years old
  • Salaried or self-employed
  • Have a regular source of income
  • An Indian citizen

Documents Required for Personal Loan for Low CIBIL 650

The following documents are required for a personal loan with a CIBIL Score of 650:

  • Proof of Identity: (PAN Card/ Passport/ Voter ID/ Driving License)
  • Proof of Address: (Utility Bills/ Passport/ Aadhaar Card)
  • Proof of Income: (Bank statement/ Salary slip/ Tax Return)
  • Proof of Employment: A formal letter from your employer or documentation affirming your business ownership.

Challenges with a CIBIL Score of 650

Having a CIBIL score of 650 presents several challenges:

  • Limited Loan Choices: Several banks and conventional financial institutions have a preference for a higher CIBIL score when it comes to unsecured loans, which could restrict your options.
  • Higher Interest Rates: Lenders tend to view a lower CIBIL score as a greater risk, which frequently leads to loan offers with increased interest rates.
  • Reduced Loan Amounts: Despite loan approval, the requested or necessary sum may be diminished.
  • Stricter Terms: The terms of the loan, such as the schedule for repayment, could be more demanding.

What are the Factors for a Low Credit Score?

Your credit score is represented by a three-digit number known as your credit score. This number is a summary of your transactions and is used by lenders to assess your trustworthiness when you apply for a personal loan. Here are some factors that contribute to a low credit score.

Inconsistent Repayment Record: It is important to consistently make your EMI and credit card bill payments to avoid penalties, late payment charges, higher interest costs, and negative marks on your credit report.

Skipped Bill Payments: Forgetting to pay EMI and credit card bills on time can negatively affect your CIBIL score.

Same Types of Debt: It is important to vary the debts in your credit portfolio, incorporating both secured and unsecured loans. By solely relying on one type of debt, it demonstrates inadequate financial management, ultimately resulting in a diminished credit score.

How to Improve Your CIBIL Score Above 650?

Getting a loan with a CIBIL score of 650 can be difficult and comes with a higher interest rate. Therefore, the most effective approach is to improve your score through various methods. Here are a few suggestions to raise your CIBIL score beyond 650:

  • Pay your loan EMIs and credit card bills on time.
  • To keep your credit utilisation ratio low, use less than 30% of your available credit limit.
  • Maintain an appropriate mix of loan kinds.
  • At least twice a year, review your CIBIL record and credit score.
  • Keep previous credit card accounts to extend the credit age.

How to Apply for A Low CIBIL Personal Loan From Urban Money

The following are the steps to apply for a Personal Loan with a CIBIL Score 650:

  • Visit the Urban Money official website.
  • Select the "hamburger menu" option.
  • Select the ‘Loan’ option, then the ‘Personal Loan’ option.  
  • Locate the lender you wish to apply with and click on ‘Enquire Now’.
  • Add the required details
  • Once the form is completed, click on ‘Submit’.
  • A 6-digit OTP will be sent to your registered mobile number. Enter the OTP.
  • Within a day, an Urban Money specialist will contact you and help you till the money reaches your suitable bank account.

Frequently Asked Questions (FAQs)

What is the minimum CIBIL score for loan approval?

A CIBIL score above 750 is considered good and increases the chances of loan approval.

Is 650 a good CIBIL score?

A CIBIL score of 650 is considered fair and falls between good and poor credit scores. While it may still allow for loan approval, the options may be limited compared to higher scores.

Can a CIBIL Score of 650 be Improved?

Yes, a CIBIL score of 650 can be improved. Consistent and timely repayment of debts, maintaining a balanced mix of credit (secured and unsecured), and limiting credit utilisation to 30% or less of your credit limit are effective strategies. 

How to choose the right Personal Loan with a CIBIL Score of 650?

You can choose the right personal loan with CIBIL 650 via Urban Money.

Urban Money