If your credit score is 600, then taking a personal loan can be a little difficult, but not impossible. Nowadays digital lending platforms and instant loan apps have made the loan process much easier. Such platforms offer flexible options for personal loans, due to which there is a possibility of getting loans for people with low scores.
Most of the lenders take care of your credit score and income before giving loans. That is, Credit History still plays an important role in personal loan approval. Although lenders always pay attention to high -scores customers, but a personal loan can also be found on the score of 600. Just the interest rate may be higher in it and the conditions of the repayment may be slightly strict.
Personal loans can be used for wedding, holiday, medical emergency or any sudden incoming expenses. On platforms like Moneycontrol, users can also apply by comparing loans. A personal loan of up to Rs 50 lakh can be taken from 8 lenders on the app and website of Moneycontrol.
Personal loan is available without any security, that is, there is no guarantee or collateral for this. In such a situation, the importance of credit score increases further. Lenders usually consider scores of 650 or above better. Therefore, getting a loan on a score of 600 can be a little challenging.
Rage and impact of credit score
The credit score is between 300 and 900. 900 is considered the best score. Understand what range what range:
300-599 (POOR): The score of this range is considered very risky. The chances of getting a loan are very low.
600-649 (FAIR): Loan can be found in this range, but the interest rate will be high and the conditions can be strict.
650-749 (Good): There is a good possibility of getting a loan, but the rate may be slightly higher.
750-900 (Excellent): Loans are easily found in this range and the terms are also better.
There may be a slight difference in the range according to different credit agencies. Therefore, it is important to understand in which range you come and what your position is.
What is the risk for loan on 600 score?
If you apply for a loan on 600 scores, the application can also be rejected many times. This can affect your credit score further and it will become more difficult to take a loan ahead. Some lenders may also demand guarantee or collateral to give loans to such customers.
Those with low scores may also have to pay more processing fees and other charges, which increases the overall cost. Therefore, experts say that if the credit score is low, it may be better to consider the option of secure loan like gold loan or property loan instead of personal loan. Meanwhile, if the funds are not needed immediately, try to improve the score first.
How to improve credit score?
- Pay your bills and EMI time
- Use credit cards in limit, try to use less than 30%
- Check your credit report on the regular base and get it fixed immediately if there is any mistake
- If you do not have a credit history, take a secure credit card and use it correctly.
It is possible to get an instant loan on credit score 600, but some compromise may have to be done with it like high interest rate. Platforms like Moneycontrol can make this process easier where you can see the offers of top lenders together. Personal loan up to Rs 50 lakh is available here at an initial interest rate of 10.5%.
Summary
It is difficult to get a personal loan when the credit score is 600, but not impossible. Know how to apply and how to improve the score.
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Disclaimer
This fraction/article is written by an external partner and does not reflect the work of the editorial team of Moneycontrol. This may include references to products and services offered by Moneycontrol.