Featured Image Caption: Cibil Score
Personal loans are all about taking a fixed amount of money from an organization and then repaying it within a fixed tenure along with interest. Personal loans can be used for various personal uses. A person can take a personal loan in order to buy something for the house or for a vacation or even to repay a debt. CIBIL score is more like a credit score within the range of 300 to 900. India’s Credit Information Company, TransCIBIL, keeps a check on the CIBIL score, which is more like a credit score.
For personal loans, it is important to keep a high CIBIL score. A low CIBIL score means that the individual, who had taken the loan, is not responsible enough. There may be several reasons behind having a low CIBIL score, including poor payment records, a High Credit Utilization Ratio, etc.
Ways to Get a Personal loan with low CIBIL score
When a personal loan of an individual is to be sanctioned, the CIBIL score of that individual plays a significant role, and when the CIBIL score is low, then it becomes pretty difficult to get a personal loan.
However, it may happen that a person with a low CIBIL score may still need to take a loan.
The various ways in which you can get a loan even after having a low CIBIL score are described as follows: –
Showing Income as Evidence such that Loan repayments are Supported
You can get a personal loan even after having a low CIBIL score if you had an increment in your salary or if you have an additional source of income that can assure the lender that you will be able to repay the loan on time and make it favorable for you to get the loan.
You can also avail of a personal loan if you can prove before the lender that you have a job and hold a secured position in it along with a steady income, then the probability of getting the loan increases drastically. However, it may happen that you have to pay a greater rate of interest.
Better if you can apply for a personal loan of a small amount
Suppose you have a low CIBIL score and apply for a personal loan of a hefty amount. In that case, there is a high possibility that the loan will not get sanctioned because it may occur to the lender that you will not be able to repay on time, and you may be perceived as a high-risk candidate. If it is a low amount personal loan, then the lender will be more likely to grant it as repaying a low amount loan is much easier.
Try applying for a joint loan or look for a guarantor
In case of a low CIBIL score, you can apply for a joint loan, and if your co-applicant has a good or high CIBIL score, your loan will easily get sanctioned. You need to fulfill the KYC formalities by taking the permission of the co-applicant or the guarantor and request them to sign in all necessary places.
On seeing the good CIBIL score of the co-applicant or the guarantor, the lender might consider the loan, and sometimes, this helps in getting better deals as well.
Keeping a check on any errors of the CIBIL score report
Often, due to certain errors, a wrong CIBIL score may be shown. This wrong CIBIL score can be low and can create problems when you go for personal loans.
It is important that you keep a check on your CIBIL score, and if you find any errors, you need to correct them as soon as possible.
Requesting lender for the Consideration of Your Case by putting an NA or NH in the CIBIL Score report
An NA or NH is put on the CIBIL Score when the credit period remains inactive or due to the absence of the CIBIL credit score for a period of 3 years. Such a thing makes your CIBIL score report invalid. If you can explain its cause properly, then the lender can sanction the personal loan.
By keeping the above points in mind, you can avail of a personal loan even if the CIBIL score is low.
By Meghana B S
– A content writer with over 4 years of experience, Meghana has dabbled in writing for a myriad of topics such as healthcare, food, technology, interior design, and is currently finding her writer’s nirvana in the world of finance at Money View. When not writing, you can find her painting, choreographing, or curled up with a book.