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How can I avail a personal loan with a low Cibil™ score?

Can I avail a personal loan with a low cibil™ score?

Before approving your loan application, the lender will look into your credit history to learn about your creditworthiness. Having a low Cibil™score will impact your eligibility to get a loan. Generally, a personal loan will tremendously help you to cater to all your necessities. You can easily opt for a personal loan as they are categorized as an unsecured type of loan. An unsecured loan is a collateral or security-free loan where you need not provide any kind of collateral to the bank. You can get a personal loan by proffering minimum documentation and less processing duration. But the significant aspect that you need to look through is your cibil™ score.

Importance of Cibil™ score in personal loan:

The  cibil™ score reflects your credit history based on your financial behavior. It contains the history of loans and repayments, credit card payments, and more. The cibil™ score ranges between 300 and 900. The high cibil™ score indicates higher financial soundness to repay the loans.  Usually, the minimum cibil™ score for a personal loan is between 720 to 750. A cibil™ score over 700 is considered a good score whereas a cibil™ score of 550 is a considered low cibil™ score for a personal loan. It’s quite difficult to get a personal loan with a low cibil™ score. Having a low credit score may have a higher chance of getting a loan with a high-interest rate or facing loan rejection. Read ahead to find out how to get a personal loan with a low cibil™ score.

Personal loan with a low cibil™ score:

Since personal loans are easy to acquire, many of us utilize a personal loan to cater to different needs including the purchase of a new car or bike, renovating your house, marriage plans, and repaying other debts or loans.  Apart from a low credit score, other factors like employment status, income, and credit report will be considered before approving the loan amount. If you lack any one of these factors, it would affect your chances of opting for a personal loan. A low cibil™ score may also impact the interest rate of a personal loan. If the lender who you are seeking to get a personal loan is a participating cibil™ member, then you could get a personal loan with a special interest rate based on your score and other factors.

Here are a few ways for opting for a personal loan with a low cibil™ score

Show income proof to support the repayment of personal loan

If you have a  low cibil™ score with an increase in salary or additional source of income, you can show this income evidence to the lender. Furthermore, if you show this proof to the lender to avail of a personal loan, the lender may aid you with a personal loan that too with a high-interest rate.

Ask for a low amount of personal loan 

If you ask for a higher amount of personal loan with a low credit score, the lender may categorize you as a high-risk borrower. According to the lender’s perspective, the high-risk borrowers will highly lack the loan repayment capability. If you ask for a low amount of personal loan, the lender may be more willing to help you. Also, getting a low amount personal loan will be easier for you to repay the loan amount in a very short time.

Rectify the errors in the credit report

Another reason for a low credit score is an error in your credit report. Any misreporting or omission of credit information in the credit report may wrongly depict your credit score. This kind of mistake may occur due to any wrong entry or non-up-gradation of the latest information on your credit report. To prevent this error it is mandatory to have a regular check of your credit score. In case of any error, you can report it to the authorities to resolve the errors. This aids in repairing your credit score which ultimately enhances your eligibility to get a personal loan.

Opt for a joint  loan 

You can apply for a joint loan or include a co-applicant or guarantor with a good credit score to act as a guarantee to avail of a personal loan with a low credit score. This joint loan process should be performed with the assent of the co-applicant or guarantor. Guarantee that the KYC process and the other formalities are completed and signed by the co – applicant. If the lender sees the joint loan application with a good credit score of the co-borrower, then the chance of approval is likely to be high.

Ask the lender to consider your case with an NA or NH in a credit report 

An inactive credit period of the last 36 months of a credit period during the same period is marked by NA or NH on your credit report. You can speak with the lender regarding why there is a period of credit inactivity. The lender may provide a loan at a high-interest rate.

Is it possible to get a personal loan without a cibil™ score?

Opting for a personal loan without a cibil™ score is impossible. Since the personal loan is an unsecured type of loan it is quite hard for a lender to offer a loan to a person without a credit score.

To tackle this, you can either gradually improve your credit score which incurs a long time, or consider the following few factors:

Take a collateral loans

You can opt for a loan by pledging your asset or collateral like gold, bonds, saving certificate, etc.

Utilize peer to peer lending

In case you are looking for a small amount of loan then you can utilize this peer-to-peer kind of loan. Usually, these kinds of loans come with a higher interest rate.

Use the above ways to get a loan without having a credit score. Kindly note that some lenders may not consider these factors as they still look for applicants with a good cibil™ score.

Conclusion 

Though following the above-listed measure can help you to get a personal loan with a low cibil™ score, you need to have an adequate fund for the repayment of the loan amount. If you fail to repay your personal loan it will again plummet your Cibil™ score further down.

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