05 December, 2024 | 11:00 IST
Have you set your sights on a brand-new car but find yourself questioning whether your credit score will influence your loan approval? You're not alone in this dilemma. Your credit score is a key determinant in securing a car loan. A clear understanding of the credit score required for a car loan can help you in choosing the most suitable offer.
By familiarising yourself with the minimum credit score needed for car financing, you can navigate the loan application process with greater confidence and clarity.
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Your credit score for car loan applications reflects your creditworthiness, summarising how well you've managed credit cards and loans in the past. A strong credit score can not only increase your chances of securing a loan but also improve the terms of that loan. For most lenders, a credit score of 750 and above is considered favourable to obtain a car loan. However, with a credit score of 600 and above you may still get some offers depending on the lender's policies.
In India, credit scores range from 300 to 900, with a score of 300 indicating poor creditworthiness and a score of 900 reflecting excellent creditworthiness.
You can easily check your credit score for free and apply for a new loan on digital lending platforms like Moneycontrol. You just need to login to the Moneycontrol app and website to check the credit score. The users can also apply for loans up to Rs 15 lakhs on the Moneycontrol app and website in a 100% paperless process. The loans start at as low as 12% per annum.
For most lenders in India, the minimum credit score required for a car loan is around the 750-mark. A score above this threshold indicates to lenders that you have a history of responsible credit behaviour. Achieving this score increases your likelihood of not only securing a car loan but also obtaining favourable loan terms.
When you apply for a car loan, your credit score is the first thing lenders evaluate. It acts as your financial report card, indicating how responsible you've been with credit.
Here's how your credit score can impact your car loan journey:
ALSO READ: Can you get a loan with a low credit score? Here’s what you should not miss
If you're keen on speeding up your car loan application process, it’s important to know that a higher credit score can be hugely beneficial. Here’s how:
It just needs a few simple steps and financial discipline to improve your credit score. Check these tips:
Overall, understanding credit score requirements for car loans is important for buying your dream vehicle. A poor credit score can impede your ability to secure financing, while a solid score can significantly enhance your chances of approval. To keep yourself on the right path, regularly conduct a credit score check for errors, pay your bills punctually and reduce credit card balances.
On Moneycontrol, you can avail multi-purpose personal loans up to Rs.15 Lakhs through a 100% digital process. Interest rates start at 12% per annum and you can avail the best offers from top lenders in the industry.
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