Personal Loan: Can you qualify with a 666 credit score?

Credit score can help you get low interest rates on personal loans and is one of the major criteria of your application approval. Personal loans are unsecured and do not require collateral. Hence, your income and credit score plays a major role in determining your credit worthiness as well as getting you a personal loan under your desired terms.

What is a credit score?

A credit score is a 3 digit number which is prepared by credit bureaus and is based on your past borrowing history. This score generally ranges between 300 to 900 and reflects your borrowing habits and whether or not you are a reliable borrower. A high credit score can help you get low interest rates and your desired loan amounts. On the other hand, a low credit score can attract enormously high interest rates and might even make you ineligible for loans.

Can you get a personal loan with a 666 credit score?

If you have a credit score of 666, you just reach the mark of a good borrower. This score typically represents that you had a few defaults in the past and might have been irregular in your past payments. This credit score depicts that you are not a high risk borrower. However, you still may face a hindrance in getting your loan approved.

With this credit score, your chances of getting a loan application approved are decent. In this case, your salary and other assets as well as investments play a crucial role in making your profile strong. With this, lenders will have a sense of security that although you had a few defaults in your past loans or credit card bills, you are capable of repaying the loan on time. Even though you might not be able to get the lowest interest rates with this credit score, still you will be able to grab decent interest rates.

How can you improve your credit score?

• Check your credit report to see if there are any discrepancies and rectify them to improve the credit rating and thus the chances of getting the loan.
• It is better to compare the lenders as the eligibility criteria differ from one another and with this you may be able to get the best deal for yourself.
• You must also provide additional documents to prove that you have a stable income and are capable of repaying the loan on time.
• You can get the loan with a guarantor who has a high credit score, to better your chances of being approved for the loan and get low interest rates.
• If you are not in urgent need of the loan, and the amount is quite large, you can work to increase your credit score by paying remaining credit card balances and lowering your credit utilisation ratio which can help you get better deals on the loan.

In conclusion, you must understand that personal loans have high interest rates in general as compared to other loans in the market. Hence, you must evaluate your needs and then explore other options available so that you can get the best deal for yourself.

(Note: Raising a personal loan has its own risks)