Know all about the minimum CIBIL score required for car loan and its features and eligibility.
Maintaining a good CIBIL score is always beneficial for you, whether you want to avail car loan or any other type of credit product. To make yourself eligible for a car loan, you need to meet the eligibility criteria, as defined by the lending banks or NBFCs. The basic eligibility criteria to be cleared consist of the applicant’s minimum age, monthly salary or income and good CIBIL score. There are no fixed CIBIL score criteria set by the lenders to apply for a car loan. If you already have a CIBIL score of 700 and above, then it is good enough to apply for a car loan; however, a CIBIL score of 750 or above is an added advantage. Higher credit scores increase the chances of your car loan approval on favourable terms.
Car Loan Features & Eligibility Criteria
Below are the basic features and car loan eligibility criteria defined by the financial institutions to apply for a car loan.
Features of Car Loan
· Interest Rates: Shall vary from lender to lender
· Instant finance available for applicants with high CIBIL score
· Financing the purchase of new and pre-owned car up to 75%-90% (Up to 100% for some car makes and models)
· Repayment Tenure from 12 months to 8 years, including EVs
· Bank’s tie-up with dealers or manufacturers helps in further discounts and offers
· Car is in the form of collateral with the bank until the loan amount is repaid
Eligibility Criteria for Car Loan
· Age Criteria
For Salaried: Minimum 21 years at the time of loan application and 60 years at the time of loan maturity
For Self-employed: Minimum 21 years at the time of loan application and 65 years at the time of loan maturity
· Minimum CIBIL Score: 650 or above and as close to 900 as possible
· Minimum work experience: At least 2 years with a minimum 1 year with the current employer
· Minimum monthly salary: Rs. 3 lakh per annum or as defined by the lending institution
Note: The above-mentioned eligibility criteria are for indicative purposes only and shall vary from applicant to applicant. The actual eligibility criteria defined by Banks/NBFCs shall vary at their sole discretion.
CIBIL Score Range
CIBIL score is classified into various credit score ranges that define your creditworthiness and repayment capacity and help lending institutions access your loan application.
|CIBIL Score Range
|Less than 300
|No CIBIL score or credit history
|Very Low Credit Score
|Low Credit Score
|Fair Credit Score
|Good Credit Score
|750 or above
|Excellent Credit Score
Note: The above-mentioned credit score range is only indicative and may vary from lender to lender and bureau to bureau.
Know how to get a Car Loan with a Low CIBIL Score
Even if you have a low CIBIL score, there are still chances for you to apply for a car loan. You should need to display a stable source of income with your lender. In some scenarios, you also need to apply along with a guarantor, so in case you default the co-applicant shall repay the loan in time. The only drawback in this case is that the interest rates offered by the financial institution shall be on the higher side.
Ways to apply for Car Loan without CIBIL Score
You can even apply for a car loan without a CIBIL score. For this, you need to show your income proof along with records of the repayment of your previous bills. As the lender might not assess the risk of lending you credit, they may offer you the loan at a higher interest rate.
With a high CIBIL score, lending institutions offer you a car loan with various special benefits, such as low interest rates, low processing fees, zero down payment, etc. These add up to big discounts on the total payable amount. Try maintaining your CIBIL score high, as low scores can lead to instant loan rejection or low chances of approvals with higher interest rates. Just like other lending products, including personal loan, home loan, business loan, overdraft, etc. require high CIBIL score for loan approvals, same way it is applicable to your car loan as well. If you do not have a good CIBIL score, then try to improve and maintain it by following the adequate measures.