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Business News/ Money / Personal Finance/  CIBIL score for car loan: What is the minimum requirement?
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CIBIL score for car loan: What is the minimum requirement?

CIBIL score for car loan: Although it is not a rule of thumb, but most lenders like to have borrowers with a CIBIL score of over 700 to qualify for a car loan.

CIBIL score for car loan: While a higher credit score is preferred, it’s not the sole factor which lenders consider when they evaluate loan applications.Premium
CIBIL score for car loan: While a higher credit score is preferred, it’s not the sole factor which lenders consider when they evaluate loan applications.

CIBIL score for car loan: The Credit Information Bureau (India) Limited, commonly known as CIBIL, is one of the leading credit bureaus in India. Lenders typically consider the CIBIL score (or credit score) to determine the borrower's creditworthiness on a car loan application.

The minimum CIBIL score required for a car loan can vary based on the lender’s policies and several other factors such as income, current debt, job stability and amount of down payment. 

Although it is not a rule of thumb, but most lenders like to have borrowers with a CIBIL score of over 700 to qualify for a car loan.

Interest rates

Having a higher credit score may also help you secure a lower interest rate on your car loan, thus saving you money over the loan term.

But one should bear in mind that while a higher credit score is preferred, it’s not the sole factor which lenders consider when they evaluate loan applications. 

They will also assess your income, employment stability, debt-to-income ratio, and other factors to determine your creditworthiness.

ALSO READ: Personal loans affect your credit score and here's what you need to know

If your credit score is lower than 700, you may still be able to qualify for a car loan, but you will in that case face higher interest rates or stricter loan terms. 

In such cases, you can work on improving your credit score by making timely payments, reducing outstanding debt, and maintaining a healthy credit utilisation ratio before applying for a car loan.

Frequently Asked Questions:

What is the minimum CIBIL score required for car loan?

The minimum CIBIL score required for a car loan can vary based on the lender’s policies and a number of other factors such as income, current debt, job stability and amount of down payment.

What does the CIBIL score above 700 indicate?

A CIBIL score over 700 shows a good credit history and demonstrates to the lender that you are likely to repay the loan on time.

Is it possible to dispute the details on credit report?

Yes, it is possible to raise the objection by following the right procedure.

Does checking your credit report affect your credit score?

A short answer is, it does not. In fact, it is advisable to keep checking the score from time to time for accuracy.

Why should you keep credit card balance low?

Maintaining low credit card balances relative to your credit limit is likely to impact your credit score positively.

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Published: 11 Mar 2024, 12:43 PM IST
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