What are the specific CIBIL score requirements for business loans? MintGenie explains
loans. While there is not a fixed threshold of CIBIL score requirement which is applicable universally to all banks, a higher CIBIL score usually raises the likelihood of loan approval and favourable terms. Here are the general rules: Excellent credit score (750 and above): Applicants with excellent credit scores typically have a higher chance of loan approval and may qualify for lower interest rates and better loan terms.
Banks, therefore, consider them as low-risk borrowers. Good credit score (700 - 749): A good credit score shows a solid credit history and responsible repayment behaviour. Borrowers who fall within this range may still qualify for business loans but might face slightly higher interest rates compared to those with excellent scores.
Fair credit score (650 - 699): Individuals with fair credit scores may face more stringent lending criteria and could encounter challenges in securing business loans. While some lenders may still consider their applications, they might face higher interest rates and stricter terms. Poor credit score (Below 650): Applicants with poor credit scores may find it challenging to procure business loans from traditional lenders.
They may need to explore alternative financing options or work on improving their creditworthiness before applying for a loan. ALSO READ: What is the fastest way to improve your CIBIL score? Follow these 9 steps It’s vital to note that apart from the CIBIL score, banks also consider other factors such as the applicant's revenue, profit, sector, current debt (if any) in order to make a guess of their ability to repay at the time of examining business loan applications. Besides, different lenders may have varying eligibility criteria and may place different
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