Whether you are a salaried individual or self-employed, if you are having cash troubles, taking up a personal loan can put your finances on ease. A personal loan is the best way to tackle financial emergencies, as it comes with a large amount, flexible end-use, flexible repayment options, and quick processing. With that said, you can take a personal loan for circumstances like home renovation, debt consolidation, vacation, child’s wedding, medical expenses, business needs, and a lot more.
However, there are certain criteria to be fulfilled for availing a personal loan. The CIBIL or credit score is the most important aspect that a lender looks into before granting a loan. So, people ask a lot of questions like whether they can get a personal loan for low CIBIL score. The answer depends on how low your CIBIL score is, and the lender you are approaching.
In this post, we will discuss how you can get a personal loan for a low credit score.
If you apply for an instant personal loan with a low credit score, the lender will first look into your income to determine whether you have the capacity to repay the loan on time. If your income is high, then the lender may consider you to be ina position to bear the loan. Submit your income proof to the lender to show them that you have the capability to repay the loan with a low credit score.
#2 Check for inconsistencies in your credit score
If you have recently closed another loan, then your previous lender may have missed out on filing the closing application with the credit bureau. Additionally, your score could be low because you have not taken a loan for a few years. You can reach out to the credit bureau to address the inconsistencies and gaps. Getting these issues addressed will help improve your score instantly. Once the score is up, you can get the loan sanctioned.
#3 Apply with a co-applicant
If you have a low credit score, then you can look at applying for an instant personal loan with a co-applicant with a higher credit score. You can ask a parent or your spouse and improve your easily sanctioned, especially if the co-applicant has a good credit score and meets the eligibility criteria. Enquire with the lender for the procedure for taking a personal loan with a co-applicant.
#4 Take time to build your credit score
If it is not an emergency, you can take out time to build your score. It usually takes about six months to improve your score. One of the ways to do it is byensuring you are making your credit card installations on time. If you have any other loans, you need to make sure you are paying the EMIs on time. Do not apply for a loan until and unless you have a high chance of approval. Loan rejections lead to a lower credit score, and hence, you should apply to one lender instead of applying to multiple lenders.
#5 Consider Non-Bank Financial Services
While exploring your lending institutions, it is important to explore non banking financial institutions. They offer quicker approval and disbursal processes and are usually not as stringent with credit score as compared to banks. You can go online and apply, or download the app of the lending institution, and complete the process from your smartphone.
In the end, you have to remember that getting a personal loan with a poor credit score can be difficult and sometimes not possible. So, it is important to research the lender and look at their eligibility criteria. For example, if a lender requires a score of 700 for a personal loan, and yours is 650, then that lender should be checked off your list or you should work on improving the credit score by 50 points before applying.