A bad CIBIL Score can affect you greatly, but all hope is not lost. There are some ways through which you may be able to get a Personal Loan fast with a poor CIBIL score. Keep scrolling through to know how. There are several options for getting a loan for a low CIBIL score. If you are new to credit or have zero credit history, there are still ways to get instant loans. Keep reading to know how!
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Personal Loan and CIBIL Score
There are several reasons why a CIBIL score could be low for an individual. Your CIBIL score could be ‘zero’ or ‘null’ if you have never borrowed. If you have defaulted EMI payment or have multiple dues your CIBIL score would have been low. Bank personnel often look at CIBIL scores to understand your state as a borrower. They will look at CIBIL score apart from regular monthly income, expenses, creditworthiness, and existing debt burden. You would have often heard that getting loan for low CIBIL score is nearly impossible, it is not entirely true. Here are some measures that you can try to ensure getting a low CIBIL score personal loan.
CIBIL Score
Your creditworthiness is evaluated in part by your CIBIL score. Lenders take your scores into account when you apply for a personal loan, home loan, or other credit products. A CIBIL( Credit Information Bureau India Limited) records and maintains individuals’ credit scores who take loans frequently. An excellent CIBIL score indicates the stable financial condition of borrowers. On the other hand, a poor CIBIL score means you have defaulted on loan repayments in the past, are going through financial difficulties, have insufficient income, or have a bad habit of overspending. As a result, banks often reject the loan applications of bad credit people and block their profiles for future consideration.
| CIBIL Score | Status |
| 750-900 | Excellent |
| 650-749 | Better |
| 550-649 | Fair |
| 350-549 | Bad |
| NA/NH | The person has not taken any loan so far. |
Get Personal Loan For Low CIBIL Score
Personal loans are unsecured, hence you do not need to provide any collateral for getting a loan. But to be safe, lenders use the CIBIL score as a parameter to assess your capability and repayment capacity.But a CIBIL score is only one part of the criteria, you can get a low CIBIL score personal loan through other ways. Let’s analyze
A Job With Good Income
Banks look at your overall monthly income and expenses before determining your loan amount. Most Bank executives expect loan borrowers to have at least 40% monthly savings after meeting all essential costs. In today’s modern world, inflation increases by leaps and bounds every month. People with unlimited monthly income always find it highly challenging to keep their expenses under control and save money.
Therefore you must look for a job with a handsome salary package somewhere around Rs.5- Rs10 lakh per annum. This will help you lead a comfortable financial life and build a solid cash reserve. You must also increase your income from other resources like renting your house, revenue from the sale of agricultural products, etc. The more income sources you have, the easier it becomes for bank executives to process your application for personal loans despite poor CIBIL scores. Sufficient income and a healthy cash reserve increase your chances of getting the requested loan.
Personal Loans With Flexible Terms And Conditions
Many banks,NBFCs, peer-to-peer websites and many other financial institutions offer instant loans without CIBIL score. These banks offer flexible terms and conditions and provide funds at an instant. You can search for these options when you are in need of emergency money with limited options and have to take an instant personal loan online. Go through the various deals and determine how they suit your needs. Extensive research and comparing multiple offers will help you choose a personal loan with simple terms and conditions and eligibility criteria. If you need to learn how to compare different loans, seek help from financial experts.
Also Read: Timely Repayment of Loan EMIs – Important Benefits At A Glance
Requesting a Moderate Loan Amount
Requesting a substantial amount when you are already looking for a loan without a CIBIL score it gives out an indication of risk. When you try to get a low CIBIL score for a personal loan, it indicates a default of payment or other factors from the lender’s point of view. Applying for a lower amount might increase your chances of getting a loan as well as increase the confidence in the lender to give you a loan. Asking for a loan under your budget and repayment potential, the Bank will happily consider your application and respond to your calls positively.
Monitor Your CIBIL Score
At least once every three months, check your credit report. Make sure to check for changes and reasons for the same. Keeping a track of your spendings, and your credit score will help you from overspending and putting your credit at risk. There are some things that you can follow while you look out for your CIBIL score-
if all the facts are true. Financial firms occasionally report inaccurate statistics. If such is the case, you should inform them right away and request a correction within 30 days.
Indicate the cause of a lower score if one has occurred
The basic principles of having a good credit score depends on how capable you are in handling finances. Avoid overspending, keep a close eye on what you spend on every month. Optimize your monthly budget and spend only what you need and try saving up to 40% of your overall income. Try to pay off all the existing loans as soon as possible, as it will help you get your name out of the list of bad credit people. Consider using the debt consolidation process if you have already taken different loans. This allows you to combine different loans into one and repay the debt burden with reasonable interest fees. When there is no pending loan against your name, it helps to restore a good credit score once again.
Also Check: Things to Consider While You Are Checking Credit Score
Applying For a Joint Loan or Applying with a Guarantor
With a low CIBIL score, it might land you into getting a loan amount you wanted or sometimes might be denied of getting a loan at all. But in these situations you can get a co-borrower. Someone with a good credit rating can help you get your loan faster. With the consent from your co-applicant or guarantor you can start this process. The ‘secondary borrower’ is often responsible for all the terms and conditions mentioned by the lender.
In case of the primary borrower failing to pay back the loan, the secondary borrower must abide by the repayment terms and conditions.
When you are a person with a poor cibil score, the presence of a Co-borrower ensures the Bank about the compliance with the loan repayment terms and conditions.
Also Read: How Can You Get A Personal Loan Online Without Income Proof
Get A Personal Loan With Higher Interest Fees
Don’t bargain too much for loans with relaxed interest fees when you need money urgently following unavoidable financial commitments. It might provoke Bank executives to either put your application on the pending list or reject it straightforwardly. Instead, apply for the loan requesting a small sum of money for emergency expenses. To reduce the risk of issuing a low CIBIL score personal loan to people with a low credit score, the Bank might apply a higher interest fee to the loan amount you want to get. The lender might ask for a higher interest rate, it is often the best option to accept the offer since it is already difficult to get a loan.
Getting an Experts Help/Opinion
Every individual on this planet does not possess financial literacy, and that is why it is best to take the help of an expert when you are confused or in a block. It is common to make mistakes when people apply for different loans. Especially when you are trying to take a low CIBIL score personal loan, it is not common for many applications to get rejected.If you don’t know how to apply for personal loans, submit documents, and complete other formalities, take the help of independent loan experts and act as per his instructions.
Loan application and acquisition is not rocket science, but several people make mistakes during this process. Taking help from an independent loan expert will enable you to communicate with the banker the right way, know more about the loan agreement you will sign, and protect your interest in all circumstances.
A CIBIL-free Personal Loan to Rebuild your Credit Score Effectively
It’s imperative to restore your good credit score once again as soon as possible. The stigma of a bad credit score haunts people in almost every walk of life. That is why when you get a low CIBIL score personal loans meet all emergency expenses with received money and repay all EMIs at the right time. A good credit score always helps you get attractive loan products with reasonable terms and conditions from traditional banking institutions and lead a comfortable life. There are other benefits of a good CIBIL score as well. People start considering you a financially responsible person and will never hesitate to offer monetary help during emergencies.
If the payment doesn’t take place due to any technical reason, consult your banker as soon as possible and make alternative arrangements for loan repayment. This gesture and activeness let bankers feel that you are financially responsible and have the intention to pay back the loan money in full.
Apply for a Personal Loan with Bad Credit Cautiously
While applying for personal loan with low CIBIL score there are several things that you should be careful about-
- Hiding your previous transaction Report,
- Hiding information about your existing loans and EMIs
- Using fake documents for loan application and acquisition,
- Submitting too many applications for personal loans without CIBIl verification at the same time. It’s always better to deal with one financial organization at one time. You would submit your application successfully and complete various formalities in quick succession. Sending applications to different banks can mess-up the situation and will result in nothing and
- You are not disclosing enough sources of income.
Conclusion
When people have bad credit scores, they look for new ways to apply for a personal loan and get the much-needed money without irritating delays. Of course, having a bad credit score is always wrong, but it doesn’t mean you have no right to a respectful financial life. To get an online personal loan despite being tagged with a poor CIBIL score, follow the tips mentioned above. Then, use the received money to meet all essential and unavoidable financial applications and repair credit score again by repaying all loan EMIs throughout the repayment tenure. Prepayment of personal loans would work wonders for you. It helps to get rid of the loan commitment before the official ending of payment tenure and strengthens your credit score quickly.
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