What is a CIBIL Score?
A CIBIL score is a three-digit number ranging from 300 to 900 that reflects your creditworthiness. It is based on your repayment history, credit utilization, outstanding debts, and financial behavior.
- Excellent Credit Score: 750–900
- Good Credit Score: 700–749
- Fair Credit Score: 650–699
- Poor Credit Score: Below 650
Lenders prefer customers with 750+ CIBIL scores as they are considered low-risk borrowers.
Minimum CIBIL Score Required for a Car Loan
To get a car loan in India:
- 750 and Above → Instant approval, lower interest rates, higher loan amount.
- 700–749 → Good chances of approval but with slightly higher interest.
- 650–699 → Approval possible but with stricter terms and higher EMI.
- Below 650 → Difficult to get a loan; most banks may reject your application.
Ideally, you should aim for a CIBIL score of 750 or higher to get the best deal on your car loan.
How CIBIL Score Affects Car Loan Interest Rates
Your credit score directly influences the interest rate offered by banks and NBFCs.
- High CIBIL Score (750+) → Lower interest rates, reduced EMI, flexible repayment.
- Low CIBIL Score (<700) → Higher interest rates, limited loan amount, strict eligibility.
Example:
- With a CIBIL score of 800, you may get a car loan at 8% interest.
- With a CIBIL score of 650, the rate may go up to 12–14%.
Can You Get a Car Loan with a Low CIBIL Score?
Yes, but with challenges:
- You may need a larger down payment.
- Lenders may ask for a co-applicant or guarantor.
- You will pay higher EMIs due to increased interest rates.
Some NBFCs and private lenders also offer loans to people with low CIBIL scores, but the cost is significantly higher.
Tips to Improve Your CIBIL Score for a Car Loan
- Pay EMIs and credit card bills on time.
- Reduce credit utilization – keep it below 30%.
- Avoid multiple loan applications within a short time.
- Maintain a healthy credit mix (secured + unsecured loans).
- Check your CIBIL report regularly and correct errors.
Improving your credit score takes 6–12 months, but it helps you secure better loan deals.
Final Thoughts
If your score is low, take time to improve it before applying. A good CIBIL score doesn’t just help with car loans but also makes you eligible for personal loans, home loans, and credit cards.
Your CIBIL score is the key to unlocking a smooth and affordable car loan journey. While you can get a loan with a lower score, aiming for 750 or above ensures better chances of approval, lower interest rates, and a hassle-free experience.
FAQs
1. What is the minimum CIBIL score for a car loan?
Most banks require at least 700, but the best offers come with a 750+ score.
2. Can I get a car loan with a 650 CIBIL score?
Yes, but with higher interest rates and stricter conditions.
3. Does a car loan improve my CIBIL score?
Yes, if you repay EMIs on time, it can boost your credit score over time.
4. Can I apply for a car loan with no credit history?
Yes, but lenders may charge higher interest rates since you are a new borrower.
5. Which bank is best for a car loan with low CIBIL score?
Some NBFCs and private lenders offer loans with lenient policies, but interest rates are higher compared to public sector banks.
Disclaimer: This article is for general information only. The interest rates and terms mentioned in it depend on the policies of the bank and NBFC. These may change from time to time. Before taking any type of loan, get complete information from your bank.