In the market scenario, loan and credit approval are now sanctioned on a vital parameter of credit history that encompasses the credit amount you have taken, when and how the repayment was made and other related aspects. Falling in the criteria of unsecured loans, personal loans are solely assessed by the CIBIL score of an individual since the lending institutions have no collaterals to bank upon. Low CIBIL score makes you a defaulter customer, and banks generally don’t tend to give loans in such circumstances. The general fallacy is that most people believe that with poor CIBIL scores, there are no opportunities to procure a loan. However, there are certain measures and conditions which will help you to get a personal loan for low CIBIL score.
These cautious moves will help you to get your personal loan sanctioned:
Apply for a marginal amount of personal loan: The poor CIBIL scores make the lender suspective regarding the repayment. If you opt for a higher loan amount, then a lender may not approve it, but you can convince your lender for a personal loan with a marginal loan amount as this will be much easier to repay
Get the help of a guarantor or co-applicant: In caseyour low CIBIL scores are affecting your chances to get a personal loan then you can prefer for a secured guarantor or co-applicant. This can boost your eligibility criteria if your guarantor or co-applicant has a good credit history. Completing certain formalities like KYC and providing signatures will do the rest of the work
Use collateral to get a personal loan: There are other ways to get a personal loan for low CIBIL scores. A collateral loan falls under the classification of secured loans that can be availed as a personal loan by using gold, fixed deposits, property, etc as security
Prove that EMI payments can be met with your income: If someone receives a hike in his salary, then he can show this to the lender and assure that the additional money can be used for loan repayment. The low credit score will not matter in case the income is steady and stable though you might need to pay a higher interest rate despite meeting such criteria
Look for tie-ups between your employer and lending institutions: There are ample chances to get a personal loan if you work in an esteemed organization and your employer is having good terms and dealings with the lending institutions. As a result of such corporate relations, banks and NBFCs give special discounts and facilities for availing personal loans
Seek your lender for NA or NH report in a credit report: The report of NA or NH marks anyone absent from prior credit activities or activities within 3years. So when you have a poor CIBIL history, you can request your lender to mark your inactivity, but it might happen that interest rates charged will be on a higher side
Improve your credit ratings: There are multiple steps that can be taken to improve the ratings of your credit score. Start with the credit card by paying off the outstanding amount and stop spending unnecessarily from it. If you have many credit cards, then don’t cancel them instantly before transferring all the credit limit to one card. In case of loans, don’t apply for different loans at a time and get rejected. Credit hungriness will ultimately tend to hit your credit scores
Apart from this, sometimes there are errors in the CIBIL scores as well, so an applicant must review and correct his CIBIL report regularly for free. A faulty report or mistake can take a toll on the credit ratings and affect the status of credit approval. Therefore, with a poor CIBIL score, you can get personal loans quite conveniently, but before that, you must assess your financial condition and repayment abilities.