What is a CIBIL Score?

A CIBIL score is a numerical value calculated by credit bureaus to assess your creditworthiness while lending money to you. Your score is actually obtained from your credit report that records your repayment history among other aspects of your credit behaviour. As such, you will need to have a minimum CIBIL score for personal loans in India. TransUnion CIBIL, Equifax, Experian and Highmark are the four major credit bureaus in India. Most of the lending institutions consider the rating of TransUnion CIBIL, it being one of the first scoring models of India. 

Every lender, whether a bank or an NBFC or a fintech company, defines its own minimum CIBIL score for Personal Loan. CIBIL scores are rated on a scale of 300 to 850, wherein a score of 700 or more is considered to be good. And a score beyond 800 is excellent. 

What is the standard Minimum CIBIL score for personal loan?

Large lending institutions such as banks and NBFCs consider CIBIL scores to be the most important factor while approving personals loans. Since these loans are unsecured, the minimum CIBIL score that most private banks require is 750. This means that a borrower must aim for a score which is beyond 750, to get a smooth approval for personal loan. 

Moreover, the eligibility criteria for personal loans offered by these lenders also includes a minimum income of at least Rs. 35,000 a month. They reject the applications from individuals who are not working in their listed 50,000 companies, neither is there any personal loan for those who stay in shared accommodations or as PGs (paying guests). 

The average personal loan size of large lending institutions like banks is Rs. 5 Lacs. A middle-class salaried individual earning Rs. 20,000 per month cannot afford to borrow that loan amount (he will not be eligible in the first place). To reach out to these individuals, Qbera is a leading Fintech lender in the online marketplace that gives unsecured personal loans to those having low or no CIBIL scores. 

What is the minimum CIBIL score for Personal Loans at Qbera?

Qbera, a Bangalore based Fintech company aims at extending unsecured credit to those who need it the most. We believe that every segment of working professionals must be provided credit when they face any kind of financial emergency. We have our own proprietary risk model to check the creditworthiness of a borrower. Hence, the minimum CIBIL score for Personal Loans that we require is as low as 600.

Yes, since it is not possible to find the risk involved in lending, merely through a CIBIL score, we at Qbera use alternative data sources as well to find out the genuineness of the borrower to pay back. The typical Qbera customer will be the one who is an ordinary middle-class individual, working in one of our listed 7 Lac companies, with a net monthly income of Rs. 20,000 or more.  

The purpose of keeping the minimum CIBIL score for personal loans lower is to provide collateral-free instant personal loans to a large segment of working individuals. These people get rejected on the basis of a low credit score and low monthly incomes, which we don’t see as reasons to reject. The risk assessment of an individual also depends on the spending habits or financial decisions that he makes in his life. Alternate sources such social media profiles – is what we look at, to see whether an applicant likely to respect the loan obligation responsibly. 

Minimum CIBIL score for Personal Loan - Traditional Lenders v/s Qbera