Personal Loan: What is the minimum credit score required? MintGenie answers

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interest rates to individuals with lower credit scores. As a result, you’ll end up paying more in interest throughout the loan’s duration. Alternatively, if you don’t meet the minimum credit score requirements, you can consider other options like NBFCs, digital lenders, peer-to-peer lending platforms, or loans against gold or mutual funds for personal financing.

A good credit score is crucial, but it’s not necessarily a strict requirement to obtain a loan or credit card. A good credit score significantly enhances your likelihood of loan and credit card approval, often at favourable terms. It demonstrates to lenders that you are a responsible borrower who is likely to repay debts punctually.

There’s usually not a specific minimum credit score requirement; instead, lenders often have a preferred range. For instance, for personal loans, a preferred score might fall within the 720-750 range. Even with a lower score, you may still be eligible for a loan or credit card, albeit with a higher interest rate and possibly more stringent terms.

Additionally, fewer lenders may be willing to collaborate with you. Having a co-signer with a solid credit score can be advantageous when applying for a loan, particularly if your credit score falls below the lender’s preferred range. A co-signer essentially supplements your application with their creditworthiness.

As lenders consider individuals with a strong credit history to be less risky, having a co-signer can greatly enhance your likelihood of loan approval. The primary risk is that if the borrower fails to repay the loan, it could negatively impact the co-signer’s credit score. Additionally, the co-signer becomes responsible for repaying the loan.