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5 Ways to Get Personal Loans with a Low CIBIL Score

Updated on February 17, 2024 , 49828 views

When you apply for a loan or a credit card, lenders measure your ability to repay the loan by checking your Credit Score. The CIBIL, which is one of the oldest Credit Bureaus in India evaluates your score based on your credit history, the number of credits you own, the amount of credit you have taken, past repayment, and other factors. All this helps a lender determine if you are a responsible borrower to grant a loan.

Personal loan with low CIBIL Score

When you have a low CIBIL Score, most banks or creditors may not offer you a loan. However, there are a few ways where you can apply for personal loans with a Low CIBIL Score.

Why CIBIL Score is Important for Personal Loan?

A strong CIBIL score makes borrowing easy. While lending money, lenders consider a score of 750+ as it indicates that you have good repayment habits. Also, you get the power to negotiate lower interest rates and loan terms. When it comes to credit cards, you’ll be eligible for various features like air miles, rewards, cash backs, etc.

Personal Loans for Low CIBIL Score

A low CIBIL score might lower your chances to get a personal loan approved. But, there are other options which could be explored to avail a personal loan with a low credit score.

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1. Review your credit report

Mistakes or errors in your CIBIL report can hamper your credit score. This happens usually when the latest information isn’t been updated against your record. Such errors can take a toll on your score for no fault of yours. So, review your report regularly and ensure there are no mistakes in your personal information & other details.

Note that you are entitled to a free credit check every year by credit bureaus like CIBIL, CRIF High Mark, Equifax, and Experian. Make the most of it and monitor your report. If you come across any error, get it rectified. This will boost your credit score.

2. Ask for a lower amount

When you apply a high amount loan with a low CIBIL score, this indicates more risk to lenders. So, instead of getting rejected for higher amounts, ask for a low loan. The lender may feel comfortable granting you the loan.

3. Secure a guarantor

If your CIBIL credit score is low, then you can get a guarantor among family or friends. But the guarantor should have a Good Credit score and steady Income.

4. Collateral

If you are not getting personal loan approval, try to get a secured loan. Here, you need to give Collateral in the form of security. The collateral can be Land, gold, fixed deposits, etc. In case, you Fail to repay the loan, the security that you put against your loan will be liquidized and the loan amount will be taken.

5. NBFCs

Non-Banking Finance Companies (NBFCs) are other sources apart from banks that are worth considering. They lend money for low credit score customers, but at a higher rate of interest than that of the Bank.

Conclusion

These alternate options can help you get emergency personal loans despite a low CIBIL score. But, ensure you build a good credit score to get the best deals on loans and credit cards.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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Khadayata Jitendrakumar Hiralal, posted on 21 Dec 21 9:28 AM

Good Adwise

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