How To Get A Personal Loan With A Bad Credit Score?
A Personal Loan is offered by several banks and NBFCs in India and is the best available solution for people looking for immediate cash and each of these have their own eligibility norms.
Among others, having a credit score of above 750 is essential to get your loan request approved. Credit score is used by all the lending institutes to measure the creditworthiness of their customers. It’s a number assigned by the Credit Information Bureau (India) Limited based on the financial information they receive from all banks and NBFCs.
How things are right now
A person with a good credit score can easily get his loan request approved. However, for a person with a credit score lower than 750, this isn’t an easy job. Most banks and NBFCs reject their requests without giving a second thought. Since, Personal Loans are unsecured loan, they don’t want to take any risk.
So, is it impossible to get a Personal Loan with bad credit?
Well…it’s not absolutely impossible to get Personal Loan with bad credit and in order to get approved, there are certain things that you need to do.
Improve your credit score
The first thing that you need to do is try and improve your credit score. Depending on your current credit score, then this will take 4-8 months. If you’re not in immediate need of the money, this is the best option that you have.
When you have a good credit history, lender options will be many and you’ll be in a better position to negotiate terms in your favour. Some of the ways to improve your credit score are:
- Clear all your credit card outstanding dues and make sure not to default
- If you have any outstanding loan repayment, pay-off the amount and try all such payments on time with defaulting
- If you come across any errors on your credit report, appeal to the CIBIL website and get it corrected
- Maintain the right credit utilisation balance on the credit cards you are using (30% is the general rule)
- It is also important that you pay your bills on time
However, if you’re in immediate need of money, then you have the following option:
Look for Banks and NBFCs that give Personal Loans with Bad Credit
Many banks and NBFCs offer Personal Loan to people with bad credit history and this is what you need to look for. You can get both secured and unsecured Personal Loans with a low CIBIL score.
Low CIBIL score Personal Loan usually have very high interest rates and the rates are even higher when the loan is unsecured.
How to get Personal Loan without CIBIL Check?
It isn’t possible to get a Personal Loan without a CIBIL score as this is one information that all banks and NBFCs keep handy. However, the banks that offer loans even with a poor score, usually don’t refer to this score.
Personal Loans can be easily availed these days. You can check Personal Loan eligibility online and even apply online from with a few clicks on your mouse. The documents required are collected by their representatives from your preferred location and so there’s no need to go to the lender at all.
Having said that, remember, you’ll get the best deals with Personal Loan only when you have a good credit score. So, even if you are taking a loan in spite of having a bad credit, make sure to make timely payments, so that your credit score improves with time.