Is it possible to get a personal loan with low CIBIL?

A CIBIL Score or a credit score is important for any type of loan. It is a form of pre-screening which is done by the lenders, to assess the eligibility of the borrower. It is the first thing that is taken into consideration while evaluating a loan application of the individual.

Having a good credit score always have the plus point of winning quick access to funds at an attractive rate of interest. While a poor credit score might be the reason an individual’s application might not be approved by the lender and even if it gets the nod, it will be offered at a higher rate of interest. 

TransUnion, Equifax, and Experian are the popular credit bureaus in India along with Experian and Equifax. These credit companies keep track of the financial history of the individuals. These bureaus assign a three-digit score to every individual. These scores may vary from 300 to 900 depending on their previous transaction records.

As personal loans are unsecured loans, the lenders check the CIBIL score as the very first thing while giving a green signal to the application form. Therefore, it is important to check the CIBIL score and keep updating it frequently before applying for the personal loan. Banks and financial institutions are at higher risk while granting approval for a personal loan with a low CIBIL score. This is the reason why a CIBIL score holds so much importance in terms of personal loans.

Take the below mentioned necessary steps to improve your CIBIL score before applying for a personal loan.

• Do not miss the EMI payments on or before the due date; always do the payment on time.

• Lower the credit utilization ratio by making more payments and reducing the usage on your credit cards.

• Always keep updating the credit report, if there is any discrepancy.

Measures to seek Personal Loan with a Low CIBIL score:

Apply with a co-applicant or a guarantor

If you apply with a co-applicant or a guarantor, whose income is steady and past reports are creditworthy, and who is ready to become a guarantor, after submitting all the KYC’s, the lender will be comfortable in granting the loan to you. The guarantor will have to submit all the KYC’s and fill the form with the signature.

Updating your Credit report time and again

Get the corrections done on your existing report, which will get your chances of approval increased.  Keep an eye on your Credit score, time and again. There are chances, the latest information has not been updated, which will take a toll on your score without your fault. 

Decreasing the amount of Loan

A bad CIBIL score is an indication that you are going to default on repayment. Any lender should be comfortable enough to lend you the money, considering the factors that you will be able to repay the amount in time. If the amount is lower, there are chances, the lender will consider it, to get the amount disbursed to you.

Submitting Income Proofs for Repayment

There is a possibility that the lender will charge you higher rates of interest if you prove it that you have other sources of income, or there is an increase in salary, a stable job and a steady flow of income, even if you have poor CIBIL score. If the lender considers it worthy of eligibility, your loan will be granted.

The lender might approve the loan if he sees signs of repayment methods as stated by the lender. Repayment of debts is the only thing that lenders are bothered about while approving a loan application. The money which any lender will be disbursing should have the trust upon you, that you are going to repay them back. 

Higher the score, the more are the chances of leveraging the benefit of negotiating with the bank for rates of interest. Time to time payment of EMI’s, bills and proper service of loans is what will make you a favorite of every lender. A person with higher scores, don’t just accept the deal, they are offered by the bank. They fully utilize their credit scores to their advantage. 

Here are the factors, which will give a clear understanding of what affects a person’s credit score:

• A higher percentage of unsecured loans.

• Untimely payment of EMIs, Credit Card dues. 

• Previously rejected loans, credit card dues.

• Absence of past credit history

• Overutilization of credit card limits.

• Settling loan with the bank by paying a lower amount than the dues.

With the advent of technology, applying for a personal loan online has made the lives of people, a much lot easier. At the top of the button, and by submitting a few documents online, from the comfort of your office or home, you can avail of a personal loan. It has eliminated the physical visiting of the bank branches to a great extent. 

All the major banks and NBFC’s have made their services of providing Personal loans available to customers by directly visiting the website and applying for the same. Even the first-time user of the website can apply for the loan, with ease and comfort. The entire process of loan application has been made simpler in terms of user accessibility. 

The user can visit the website of the chosen lender and click on the segment of apply personal loans. Proceed by the step by step procedure of filling the details of the online personal loan. Submit the required documents, as demanded by the lender. After the submission, if the application qualifies for the approval, it gets disbursed within 3-4 working days.

A personal loan is most popular amongst masses, to avail immediate cash, in times of monetary shortfall. Personal loans these days are also availed to sort out other issues, which need financial backing, which otherwise becomes a challenge with regular income.

Therefore, it is important to look out for the CIBIL score before applying for a personal loan. A personal loan can be availed, if an individual is having a poor CIBIL score, however, it is important to take the necessary measures and then seek for the loan.

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