A CIBIL score is one of the most important factors lenders consider before approving any loan or credit card application. It reflects your repayment behaviour, credit discipline, and overall financial trustworthiness. Most banks and financial institutions in India prefer borrowers with a credit score of 750 and above. But what if your CIBIL score is 650 and you’re trying to understand your 650 CIBIL score loan options?
A CIBIL score of 650 falls into the “average” or “fair” category. While it is not a poor score, it is also not ideal for securing the best loan deals. If you are planning to apply for a personal loan, home loan, car loan, or credit card, it’s important to understand what this score means and what options you realistically have.
This article explains what happens when your CIBIL score is 650, the loan options available, common challenges, and practical tips to improve your score.
Is a CIBIL Score of 650 Good or Bad?
A score of 650 is moderate. It shows that you have some positive credit history but may have missed payments, defaulted earlier, or used too much of your credit limit. Banks usually consider borrowers with a 650 score as higher risk than those with 750+ scores.
While a 650 score will not automatically disqualify you from getting a loan, it can lead to:
- Higher interest rates
- Stricter verification
- Lower loan amounts
- More chances of application rejection
However, the good news is: you can still get a loan especially from NBFCs, smaller banks, and digital lenders.
Loan Options Available When Your CIBIL Score Is 650
Even with a 650 score, you still have several borrowing options. Here are the most common ones:
1. Personal Loans
Personal loans are unsecured, so lenders rely heavily on credit scores. With a score of 650:
- Banks may hesitate, but some will still consider your application if you have stable income.
- NBFCs and fintech lenders are more open to approving such loans.
- Interest rates may be higher (sometimes 15%–24% depending on the lender).
- Loan amounts may be lower than requested.
If you have a good salary, existing relationship with a bank, or a guarantor, chances improve significantly.
2. Secured Loans (Best Option)
If your CIBIL score is 650, secured loans are easier to get because you provide collateral.
Types of secured loans:
- Home loans
- Loan against property
- Gold loans
- Loan against FD
- Loan against insurance policies
- Car loans
Among these, gold loans and loans against FD are the easiest and come with low interest rates because lenders have security.
Even with a 650 score, your chances of getting a home or car loan are fair, especially if your income is stable and documentation is strong.
3. Credit Cards
With a 650 score:
- You might not qualify for premium cards.
- Banks often issue secured credit cards against a fixed deposit.
- NBFC-backed or fintech credit cards may approve fair-score applicants.
Using a secured credit card responsibly can quickly boost your score.
4. Buy Now Pay Later (BNPL) Services
Companies like ZestMoney, LazyPay, and Slice may approve users with moderate scores. However, misuse or late payments can further damage your credit score.
5. Small Loans from Fintech Lenders
Digital lending apps offer small-ticket loans such as:
- ₹5,000–₹1,00,000
- Short repayment periods
- Moderate credit score requirements
These loans are usually easy to get but often come with higher interest rates. They can help build your credit score when repaid responsibly.
Challenges You May Face with a CIBIL Score of 650
When applying for loans with this score, you may encounter:
1. Higher Interest Rates
Banks charge higher rates to compensate for risk. Over the loan tenure, you may end up paying significantly more interest.
2. Lower Loan Amounts
Even if lenders approve your application, they may offer a smaller loan amount than requested.
3. More Documentation and Verification
Lenders may ask for:
- Salary slips
- Bank statements
- ITR documents
- Proof of stability
They may also take longer to approve your loan.
4. Guarantor Requirement
Sometimes lenders ask for a co-applicant or guarantor to reduce risk.
5. Higher Chances of Rejection
Although not guaranteed, a 650 score may result in rejection if lenders find additional risk factors such as multiple active loans or high credit utilization.
Tips to Improve Your CIBIL Score From 650 to 750+
Improving your credit score is absolutely possible. Here are proven ways to increase it:
1. Pay All EMIs and Credit Card Bills on Time
Late or missed payments reduce credit scores severely. Set reminders or enable auto pay.
2. Reduce Credit Card Utilization
Try to keep usage below 30% of your credit limit.
Example: If your card limit is ₹50,000, keep spending below ₹15,000.
3. Avoid Multiple Loan Applications
Every time you apply, lenders run a hard inquiry, which lowers your score. Apply only when necessary.
4. Maintain a Healthy Credit Mix
A combination of secured (home/car loan) and unsecured (personal loan/credit card) credit helps improve your profile.
5. Regularly Check Your Credit Report
Look for:
- Incorrect loan entries
- Old closed loans still showing as unpaid
- Mistakes in personal info
Report errors immediately to CIBIL for correction.
6. Take a Secured Credit Card
A credit card against an FD is easier to get with a 650 score and can help prepare your credit profile.
7. Prepay Small Loans
If you have active short-term loans, consider prepaying them to bring down your credit utilization and improve your credit score.
If you are curious how a slightly higher score changes eligibility, read our guide on getting a loan with a 700 CIBIL score.
Frequently Asked Questions (FAQs)
Yes, but approval may be difficult with banks. NBFCs and online lenders are more likely to approve, though at higher interest rates.
Yes. Since home loans are secured, lenders may approve your application if your income is stable and documents are strong.
With consistent repayment and reduced credit usage, you can improve your score within 3–6 months.
No. Self-checks are soft inquiries and do not affect your credit score.
Yes. You may qualify for secured credit cards or entry-level cards from banks and fintech companies.
