Many Indians worry that a 650 credit score is “too low” to qualify for a personal loan. While it’s not considered excellent, it’s also not the worst—you’re still in the fair range. With the right preparation, it’s possible to secure a ₹3 lakh personal loan even at this score.
Understanding a 650 Credit Score
Credit Score Range in India:
750 & above – Excellent
700–749 – Good
650–699 – Fair
Below 650 – Poor
A 650 score indicates some risk to lenders (perhaps delayed payments or high credit utilisation). Banks/NBFCs may approve your application but at higher interest rates or with additional requirements.
Steps to Get a ₹3 Lakh Loan with a 650 Score
1. Check Your Eligibility First
Use online pre-approval tools on bank/NBFC websites. These don’t impact your credit score and give you an estimate of the amount you may qualify for.
2. Apply with Banks/NBFCs That Serve “Fair” Credit Profiles
Some lenders (Bajaj Finserv, Tata Capital, Fullerton India, PaySense, MoneyTap, etc.) are known for approving loans to people with fair credit scores.
3. Show Stable Income & Employment
Lenders weigh income and job stability heavily if your score is borderline. Provide:
Salary slips (last 3–6 months)
Bank statements
Form 16 or IT returns
4. Reduce Existing Debts Before Applying
Pay off small loans or credit card balances. This improves your debt-to-income ratio, making you look less risky.
5. Offer a Guarantor or Co-Applicant
Adding a co-borrower with a higher credit score or stable income can improve approval chances and lower your interest rate.
6. Consider Secured Loans
If unsecured loan approval is tough, pledge collateral (like a fixed deposit, gold, or property) to get a lower-interest secured personal loan.
7. Apply for the Right Amount
Since ₹3 lakh is moderate, it’s often easier to get approved than a very large loan. But don’t apply for more than you actually need; high amounts raise risk perception.
Interest Rates You Can Expect
At a 650 score, expect:
Interest Rate: 14%–24% p.a. (varies by lender)
Tenure: 12–60 months
Processing Fees: 1%–4%
A higher score (700+) could reduce your rate by 2%–4%.
Pro Tips to Improve Approval Odds
Don’t apply to multiple lenders at once. Each hard inquiry can lower your score.
Provide complete documentation. Missing papers delay approval or cause rejection.
Highlight positive factors. If you have a salary credit of ₹50,000+ per month or work with a reputed employer, mention it.
Conclusion
A 650 credit score doesn’t automatically disqualify you from getting a ₹3 lakh personal loan. By choosing the right lender, showing stable income, reducing debt, and considering a co-applicant or collateral, you can improve your chances of approval and possibly negotiate a better interest rate.
FAQs
Q1: Is a 650 credit score enough for a personal loan?
A: Yes, but approval isn’t guaranteed. You may face higher interest rates or additional requirements from lenders.
Q2: Which lenders approve loans for 650 scores?
A: NBFCs like Bajaj Finserv, Tata Capital, Fullerton India, PaySense, and MoneyTap often serve customers with fair credit profiles.
Q3: Can a co-applicant help me get approval?
A: Yes, a co-borrower with a higher score or stable income can increase your chances and lower the interest rate.
Q4: How quickly can I improve my score?
A: Paying off small debts, keeping credit utilisation under 30%, and avoiding new hard inquiries can boost your score within 3–6 months.
Q5: Will applying to multiple lenders hurt my score?
A: Yes. Each hard inquiry can reduce your score by a few points, so compare offers first and then apply selectively.
Published on : 19th September
Published by : SMITA
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