Minimum Credit Score for Unsecured Personal Loan
Minimum Credit Score for Unsecured Personal Loans: Let’s check tips for fixing the issue of minimum credit score for unsecured personal loans. You may want to buy an auto vehicle, buy a computer, want to go on a vacation trip, or want to buy a new sofa and you find it difficult to afford the big amount. Many of you want to get a personal loan to fulfill your need. A personal loan is also called an unsecured loan.
You have to pay back the borrowed amount in a monthly installment. You will also be paying interest on the money borrowed, the rate will be decided by the credit score you have. Many of the banks and financial services providers offer a loan, provided you have the good credit score to get the loan approved.
FICO Grades for Real Lenders
Personal loans are sanctioned very fast. Your credit score and the paycheck you earn are the only requirements. Generally, credit grades are assigned by the lenders based on credit scores.
There are different credit scoring models. FICO and Vantage scores are considered standard for credit scoring.
Following given is the grading system according to the FICO score.
FICO score grade assigned
< 580 F
Vantage Scores grading is as given below:
< 600 F
Minimum Credit Score required for getting a loan
People with good grades get loans at lower interest rates. It is very easy to get loans approved for people having grades A and grade B. For grades C and grade D, it is hard to get the loan approved. Below that, you won’t get a loan. Following given is a sample of July 2013 rates from a credit union having different grades, interest rates, and limits to the credit given.
Grade Rate Credit Limit
A 9% $7,000
B 10% $5,000
C 12% $3,000
Term of the Loan and Fixed monthly payments
A personal loan is approved for a fixed period of time and with a fixed interest rate. Generally, it is for one, three, or five years. In the longer term, you will end up paying more interest. You will be informed at the outset how much you will need to pay each month as payback, so you can plan accordingly.
How much can you borrow?
There is a limit to the personal loan and usually, you can borrow up to £25,000. For more than that, you have to put up an asset (such as property) as security to the lender. Interest rates also vary according to the loan amount. Usually, the bigger the loan amount, the lower the interest rate.
When you apply for a personal loan, your credit history is checked. If you have had debts in the recent past and have a poor credit history, you will be denied a loan. Even if you manage to get it approved, you will be paying more interest.
You should not be applying for a loan more than two to three times a year, as it will also count into your credit history. It is better if you try to improve your credit score and history.
If you are in need of a personal loan, make sure you have a good credit score and then apply for it. Get it approved and get the things of your dream. Read more articles on rozyjos.
More Related Queries:
- Unsecured personal loan
- What is the minimum CIBIL score to get a personal loan?
- Personal loans for poor credit