Dealing with financial insufficiencies can be challenging. A personal loan can however be a blessing when you are facing a financial crunch. An instant loan can cater to a variety of end uses. You can take a loan to pay for your hospital bills, travel expenses, wedding, home renovation costs and much more.
What is a CIBIL score?
CIBIL score is the summary of your credit history, it plays an important role in determining your credit worthiness. The score reflects your credit profile. The parameters include past credit conduct, that includes payments of your past, timely credit card, as reported to CIBIL on a regular basis by banks and lenders. CIBIL score typically ranges from 300 to 900. Generally, a credit score of above 700 is considered as a good credit score. The closer your score is to 900, the better are the chances of the personal loan application getting approved.
Can I get a Personal Loan with a low CIBIL score?
While you must have heard that getting a Personal Loan with a low CIBIL score may be difficult, but it is not impossible. Here are some measures that can help you with attaining an instant loan even with a poor credit score.
1. Do an intense research before finalising on a lender
The credit score cut-offs may vary from lender to lender. There may be some lenders who may set a high credit score for lending with low interest rates, while some may be okay with low credit score cut offs but at high interest rates. So personal loan applicants with a low CIBIL score, are generally advised to do a research between lenders before finalising on a lender.
2. Income proof
Your growth in salary can act in your favour while taking a loan. A lender may consider your personal loan application if you can prove that your income can support the EMI payments. If you have received a hike in your salary or have an additional source of income may help in the process. However, opting for an unsecured loan with a low credit score may lead to the lender charging high interest rates.
3. Lower your principal amount
A lower amount loan is more likely to be approved by a lender when you have a low credit score. Given that personal loan is an unsecured loan, a lower amount is easier to repay and indicated a less of a risk for the lender.
4. Apply with a family member or any co-applicant
Applying with a co-applicant can help with a securing a guarantor for your personal loan application. In case of a low CIBIL score, you can choose to apply for a personal loan with a co-applicant or a guarantor. If the co-applicant is proven to have a good credit score and a steady income, the lender is more likely to grant the loan.
5. Check for mistakes in your Credit score
It is possible that your CIBIL score contains errors. It may happen if the latest information has not been updated against. Checking your Credit Report periodically may help in avoiding any errors.
6. Go for secured loans
Secured loans are available to those who have been refused unsecured loans such as personal loans and credit card loans, or who are being charged disproportionately high interest rates due to their poor credit scores. Lenders face less credit risk when they make loans backed by reasonable collateral and ample liquidity. As a result, they place less emphasis on credit scores when authorising secured loan applications.
7. Choose an NBFC for your loan
It will lower your credit score because banks perform stringent credit report checks, which can also lead to hard inquiries. As a result, you should approach non-banking financial companies (NBFCs) rather than banks, as NBFCs have more lenient policies against people with bad or no credit. Bajaj Finserv offers an instant personal loan of up to Rs. 25 lakhs with minimal documentation, quick disbursal, and affordable interest rates. You can easily apply for the loan with your mobile.
