Can I Get an SBI Personal Loan with a 672 CIBIL Score?
When it comes to availing a personal loan, the first and foremost thing banks and NBFCs consider is your credit score. There is a general belief that a higher CIBIL score means there are high chances of getting your loan approved whereas a lower credit score means dim chances of loan approval. This is why it is strongly advisable to maintain a good CIBIL score to get your loan approved by a majority of lenders. Your CIBIL score ranges between 300 and 900 and a CIBIL score of 700 tends to be a good score to get a personal loan.
What is a CIBIL Score?
CIBIL stands for Credit Information Bureau of India and it is a government-authorized body that maintains the credit records of individuals basis their PAN no. The body then assigns a 3-digit score which is known as the CIBIL score. This score is calculated based on various factors related to an individual’s credit performance like active/closed loans/credit cards, payment history, credit inquiries, default, etc. According to experts, a CIBIL score of 750 and above is considered an excellent credit score and your loan application is likely to get approved by a majority of lenders.
How good is a CIBIL score of 672?
As has already been mentioned, a CIBIL score of 700 is considered a good score and contains a higher chance of getting the loan application approved. A CIBIL score of 672 falls between the fair and average score range. So, it can’t be easily determined that a CIBIL score of 672 is a bad credit score as your loan application would depend on several other factors before lenders decide whether to approve or disapprove your loan.
Will you get a personal loan from SBI?
Just like other lenders, SBI or State Bank of India has its loan eligibility criteria along with its internal loan sanction guidelines. So, SBI is likely to check other factors too along with your CIBIL score before deciding whether to sanction or reject your loan application. Some of these underlying factors are mentioned below.
- Credit History – SBI would always love to know how well you handled your loans and credit cards in the past. It is generally believed that your past credit behavior is likely to drive your future credit performance. If you have a pending loan against your PAN, your loan application is likely to get rejected by the bank. On the other hand, if you showed punctuality and timeliness regarding the repayment of your EMIs in the past despite having a CIBIL score of 672, you have a higher chance of loan approval by the bank. If you have a clean past credit history with minor or no signs of default, you can expect to get a personal loan from SBI.
- Employment Record – Another crucial thing that banks check while reviewing a personal loan application is your employment record and stability. Applicants with a reliable and stable income source are likely to get their loan application sanctioned by the bank. But, if you made too many switches in your job in the past, it shows your unstable employment behavior which may be a red sign for the lenders. If you work in a multi-national organization or a blue-chip organization, your loan approval chances are good. Similarly, professions like doctors, chartered accountants, lawyers, and engineers carry higher chances of loan approval.
- Age – Your age may also play a role in your loan application process. For example, you start earning money in your 20s, and by the time you move to your 30s, you should have an excellent income and a clean employment record. This shows your stability in terms of employment. It also means that you have enough time to repay the loan. The closer you are to your retirement; the lower your chances of getting your loan application approved.
- Income - As already stated, the income you generate shows your repayment capability. Banks tend to evaluate an applicant’s income capacity regarding the running debt responsibilities, dependents, origin, and period. In this regard, one of the several things checked by the bank is enough surplus once the EMI payments are done. If this is revealed wanting, the bank concludes that your financial scenario is very weak and you are more likely to default. However, if the ratio stands at five times or more, the bank will take you financially responsible.
- Repayment - If you choose to prefer a curtailed repayment period, you might have an improved likelihood of getting the loan approved. A majority of banks and NBFCs give priority to applications for a repayment tenure of up to 5 years. When the loan repayment tenure goes up in five-year slabs – 10, 15, 20, and 25 years – the score tends to go down. So, one proven way to get your loan approved is to keep the loan repayment tenure as low as possible.
- Collateral: Collateral or security that you give to the bank when you apply may make it simpler and faster for you to get the loan. Given that the loan amount is determined by the collateral's assessed value, having a high-value asset could result in you being approved for greater credit. The asset may be moveable (car, merchandise, equipment, investments, insurance policies, gold jewelry, artwork, and other valuables) or immovable (land or house). Even though personal loans, such as credit card debt, are unsecured loans, they cannot be approved unless sufficient collateral is provided. Examples of such collateral include buying a home or car, operating a business, or financing education.
Q. Is it possible to prepay the loan amount?
- Yes, you can choose to prepay the loan amount given your financial situation. However, this may incur some charges known as a penalty. According to SBI, the penalty amount stands at 3% on the amount that is paid in advance.
Q. Can I choose between fixed and floating type interest rates while getting a personal loan from SBI?
- No, SBI provides personal loans on a fixed interest rate associated with a 2-year MCLR of the bank.
Q. What are the benefits of taking a personal loan from SBI?
- There are numerous benefits of taking a personal loan from SBI as mentioned below.
- Lower interest rates
- Reduced loan processing charges
- No hidden charges
- Minimal documentation
- No prepayment penalties
So, from the above-mentioned points, it can easily be determined that your chances of getting your loan approved are average. Along with your CIBIL score of 672, the bank will take into consideration several other factors (as mentioned above) before deciding on your loan application. However, it is advisable to take various measures to see a quick improvement in your CIBIL score. You can check our other posts on how to improve your CIBIL score quickly.