Need A Personal Loan With Low CIBIL Score? Here’s How To Avail One
A person with low credit score can avail a personal loan by applying smartly. Read on to know 4 ways to avail personal loan with low cibil score at IIFL finance.
A personal loan can be one of the easiest ways to get money quickly from a bank or a non-banking finance company. This cash can be used for almost anything, from paying children’s school or college fees to getting urgent house repairs done or to even meet any unexpected increases in expenses for a wedding or a family gathering.One can also fund big medical bills by using personal loans and then pay back the money slowly in installments. A personal loan can also be used for non-urgent purposes, like a foreign vacation or to purchase the latest iPhone.
The application process for a personal loan can be done online and the approval process is quite easy. Moreover, no collateral needs to be furnished while availing a personal loan.Apart from funding an emergency, such a loan can also be used to build one’s credit history and improve credit score over time.
The credit score, or the CIBIL score, is nothing but a three-digit number that independent credit bureaus like TransUnion CIBIL, Experian and Equifax generate upon looking at a borrower’s earlier loans and repayments record.A CIBIL score typically varies from 300 to 900 and is used to gauge a person’s credit history. The higher the CIBIL score, the easier it is to take a loan and at a lower rate of interest.
Most good lenders typically prefer borrowers who have a CIBIL score in excess of 750, which is an ideal number. Such borrowers can not only hope to get the best interest rates in the market but can also get the best possible value-added services free of cost.Having said that, a borrower who has a less than ideal CIBIL score can also hope to get a personal loan, albeit at a higher rate of interest and with stricter terms and conditions.
People with low CIBIL scores can also improve their chances of getting a personal loan by doing one or more of the four following things:
Getting A Co-Applicant:A borrower with a low CIBIL score may choose to get a co-applicant who has a higher credit score. By doing this, the lender will get the confidence that the chances of a late repayment or default are low and the risk is mitigated.
Getting A Guarantor:The borrower could get anyone with a much better credit history to become a guarantor so that if he or she defaults, the lender can recover the money from the guarantor.
By Pledging A Collateral:If the borrower can pledge some collateral like property, gold, shares or fixed deposits, the lender gets an extra comfort for the additional risk. The lender can invoke the collateral in case of a non-payment or default. A borrower with a low credit score should try and furnish some asset as collateral to get a personal loan.
By Seeking A Lower Loan Amount:A borrower with a low credit score can apply for a lower amount as personal loan, and repay both the principal and the interest in time and in full. By doing this repeatedly, he or she can improve their credit score and then hope to get a better deal for subsequent loans.
ConclusionMost lenders prefer borrowers with good credit histories and high CIBIL scores, and offer them some of the most attractive interest rates in the market, along with several complementary value-added services.
Having said that, a person with a lower-than-average credit score, too, can avail a personal loan by applying smartly and asking for a lower loan amount and repaying it in time and in full, thereby improving their CIBIL score.Bringing in a co-applicant or a guarantor or pledging an asset can also be of great help if you want a personal loan with a lower score.
Reputed lenders like IIFL Finance also customize the personal loans to match the requirements of the borrowers and their repayment schedules. The non-banking finance company provides personal loans of up to Rs 5 lakh at competitive interest rates. IIFL Finance follows a completely digital loan application process that can be completed within a few minutes while sitting at home.