What is the Minimum Credit Score for Unsecured Personal Loan?
Let’s check tips for fixing issue of minimum credit score for unsecured personal loan. 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 fulfil the need. Personal loan is also called unsecured loan.
You have to pay back the borrowed amount in monthly instalment. 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 good credit score to get the loan approved.
FICO Grades for Real Lenders
Personal loans are sanctioned very fast. Your credit score and the pay check you earn are the only requirements. Generally, credit grades are assigned by the lenders based on the credit scores.
There is different credit scoring models. FICO, Vantage scores are considered as standard for credit scoring.
Following given is the grading system according to FICO score.
FICO scoreGrade assigned
< 580 F
Vantage Scores grading is as given below:
< 600 F
Minimum Credit Score required for getting a loan
People with good grade get loan at lower interest rate. It is very easy to get loan approved for people having grade A and grade B. For grade C and grade D, it is hard to get the loan approved. Below that, you want get a loan. Following given is a sample of July 2013 rates from a credit union having different grades, interest rates and limit 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 fixed interest rate. Generally, it is for one, three or five years. For 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 pay back, 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, bigger the loan amount, lower is 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 for more than two to three times a year, as it will also count to your credit history. It is better you try to improve your credit score and history.
If you are in need of a personal loan, make sure you have good credit score and then apply for it. Get it approved and get the things of your dream.
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