Need A Personal Loan With Low CIBIL Score? Here's How To Avail One

Cibil score is considered as an important factor to get any loan. Read on to know how can you avail for a loan with low cibil score.

28 Sep,2022 10:41 IST 238 Views
Need A Personal Loan With Low CIBIL Score? Here's How To Avail One

“What’s your CIBIL score?” is one of the most common first questions your potential lender asks before you apply for a loan. A good CIBIL score is essential to get any loan, especially personal loans. This score demonstrates your creditworthiness which tells the lender that they can trust you to make timely payments. As it can get challenging to avail of a personal loan with a low CIBIL score, there are a few ways to succeed. Read on to learn more.

How To Avail Of A Personal Loan With A Low CIBIL score?

Typically, a CIBIL score of 700 or above is exemplary, whereas that between 300 and 550 is considered poor. Availing of a personal loan with the latter score can be difficult. If you fall under the latter category, you can use the following tips to convince the lenders to sanction the loan.

1. Show Income Evidence To Support EMIs

An additional source of stable income or a salary hike can help the lender approve your loan application. The CIBIL score instils the trust factor in the lender, and if you do not have that to showcase, you need to prove that in another form. Showing them a sure-shot way to pay the EMIs smoothly can be a game changer.

2. Consider Taking A Low Amount

You become a high-risk candidate with a poor CIBIL score. Your lender perceives you as the one with a high probability of default. Therefore, if the personal loan amount is lower, the lender might be more inclined toward granting your loan than for a higher amount.

3. Get A Guarantor Or A Joint Loan

A co-applicant or guarantor with a high credit score can help you process the personal loan faster. When you approach lenders with a person or entity with a good credit history, you enhance your chances of getting a personal loan.

4. Request The Lender To Consider You With An NA Or NH In Your Credit Report

An NA or NH is marked in your credit report when there is an idle credit period in the last 36 months. This sign indicates you do not have a credit history or credit report. Discuss this with your potential lender and explain why there is a credit period inactivity. The above scenario can have personal loan approval with a higher interest rate.

Ideally, the best way to ensure the approval of your personal loan is to work towards improving your credit score. However, the above tips can help you secure a loan without worrying about a low CIBIL score under stressful financial circumstances or other factors.

Frequently Asked Questions

Q.1: How to improve my CIBIL score?
Ans: You can improve your CIBIL score by following the below tips-
• Not default in the credit report
• Timely EMI payments
• A decent credit period
• Lesser number of loans simultaneously

Q.2: How to get a loan without a CIBIL score?
Ans: You can avail of a personal loan without a CIBIL score in the following ways.
• Collateral loan
• Peer-to-peer lending
• Using your parent’s or partner’s credit score
• Availing of a credit card

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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