What is Minimum CIBIL Score Required for Business Loan
So, you’re thinking about applying for a business loan, but you’re not sure what the minimum CIBIL score required is? You’ve come to the right place. Here we’ll give you an overview of a CIBIL score, how it’s calculated, and what the minimum score is for business loans.
What is a CIBIL Score?
A credit information report (CIR) and associated credit score are issued by Credit Information Bureau (India) Limited (CIBIL). Like a credit report in other countries, a CIR contains information lenders use to assess an individual’s creditworthiness. The scores range from 300 to 900, with 900 being the highest – or best – score. The higher your score, the better your chances of getting approved for a loan or line of credit.
Calculating your CIBIL score considers factors such as payment history, the total debt owed, and length of credit history. Generally speaking, the higher your past payment performance and debt levels relative to income level will result in a higher your score. Having longer tenure on existing credits can also help improve your current score.
Minimum CIBIL Score Required For Business Loan
Most lenders prefer borrowers with high scores when approving business loans. Generally speaking, most non-bank lenders require borrowers to have at least 700 points on their CIBIL scores before they can be considered for approval on their business loan applications. Banks typically require even higher scores (usually between 800-900). That said, some lenders may consider lower-scoring applicants depending on other factors, such as the loan amount applied for or the type of industry sector the applicant belongs to; however, this would be at the discretion of each lender.
When applying for any kind of loan – including a business loan – it’s essential to understand your CIBIL score and how it affects whether or not you get approved by lenders. Knowing what goes into calculating your CIBIL score can help you prepare accordingly when applying for any loan – including business loans – as it allows you to improve your rating if needed before submitting an application.
While most lenders prefer borrowers with high scores (typically 750+), there are some exceptions where lower scoring applicants may still be considered depending on other factors such as loan amount applied for or the type of industry sector that the applicant belongs to; however, this would be at the discretion of each lender.