Personal loans are one of the quickest ways to secure short-term finance for marriage, travel, higher education, home renovation, or any emergency situation. However, there are certain things that ensure smooth loan availability to meet all the financial needs, and CIBIL score is one of them. When it comes to applying for a personal loan online, most of the banks and financial institutions look for your credit report and based on that, lenders decide the loan amount, interest rate, and repayment tenure. So, have you ever applied for a personal loan and didn’t get it for a low or no credit score? If your answer is ‘yes’, then we have a solution for you – apply personal loan online with a low credit score. Read on to learn what is CIBIL score and the importance when it comes to applying for a loan online.
Secure a Loan Online With Low CIBIL Score
A CIBIL score is a numerical synopsis of an individual’s credit history and monthly expenditures, calculated by the credit bureau of India. To measure the creditworthiness of the borrower, credit bureaus will collect your financial details from banks and non-banking financial institutions. The score ranges between 300-900. Having a score of 750 is considered good to avail of a loan instantly without any bias. But having a score below that is considered bad and can get difficult to avail of a loan.
Most of the lenders do not wish to take the risk of loan default and this leads your loan application towards rejection, impacting your credit score negatively. However, a credit score is not the only factor to decide your loan application approval/rejection. There are multiple lenders who consider borrowers’ monthly income, employment details, repayment capacity, etc. If you are holding a no or low credit score, then check out the below tips that will help you get a personal loan in an instant.
Maximize Your Search For Lenders:
Not all lenders check for a good credit score when it comes to applying for a personal loan online. There are many who look for your income, repayment capacity, and other factors. So, keep continuing the search and explore all the lenders who offer loans with your existing credit score. In this case, you might need to pay high-interest rates to avail of the loan. cake
Apply For a Loan With Co-applicant:
Most of the lenders reject loan applications with a low credit score as they do not want to take the risk of loan default. In order to increase the chances of getting instant loan approval, consider applying with a co-applicant or guarantor with a good credit score and job profile.
Opt for a Smaller Loan Amount:
If you have a low credit score, then go for a smaller loan amount and repay it timely to build a credit score. This will not only help you develop a healthy score but also make you eligible to get a better credit line in the future.
Apply for a Secured Personal Loan:
People with a high CIBIL score can easily obtain collateral-free unsecured loans. If you have a low credit score, then you can go for a secured personal loan by mortgaging any assets as a guarantee or security. Lenders will easily approve your loan application once you agree to pledge anything. But make sure you apply for a secured loan when you are in urgent need of cash.
Maintain a Good Relationship with Banks:
Always maintain a healthy relationship with the bank or lender with whom you have been associated for a long period as this builds up trust, and you can easily avail of a loan by showing your employment proof and income details.
Financial emergencies can arise at any time and personal loans are the best financial instrument to meet any financial needs. Consider improving your credit score by repaying your bills timely and lowering credit card utilization. Also, do not apply for loans with multiple lenders, because rejections will damage your credit score further. Follow these tips, improve your credit score & apply for a personal loan online. You can consult with financial experts to make a better decision when you have a bad credit score and need a loan instantly to fulfill all your financial requirements!