How To Get a Personal Loan When Your CIBIL Score is Low - Loan Trivia

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Wednesday, 23 October 2019

How To Get a Personal Loan When Your CIBIL Score is Low

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You may need a good amount of money at some point in your life. A personal loan can be a good choice when you need extra money to cover your financial needs. A personal loan is usually an unsecured loan where lenders rely on your credit score to determine your loan eligibility. The Credit Information Bureau India Limited (CIBIL) is one of the companies that prepare your credit score. A credit score is a numerical rating of your credit history. Getting a personal loan for a low CIBIL score may be a little difficult, but it can be managed. 

Let’s find out how to avail a personal loan for low CIBIL score, To do this, it is important to understand why your credit score is low. There may be various reasons for this. 
  • Having many open loans at the same time. 
  • Having a higher percentage of unsecured loans 
  • Overutilization of your credit card credit limit 
  • Too many rejected loans or credit card requests 
  • Settlement of credit card dues by paying a lower amount 

What is the best way to avoid rejection of your personal loan application? Start by working on your credit score and try to avoid the situations listed above. 

But sometimes, certain unavoidable circumstances may not allow you to maintain a good CIBIL score. In such a situation, you may still try to avail a loan for your personal needs by following a few tips. 

Check Your Eligibility 

Before applying for a loan, check the required personal loan eligibility criteria. You can get a personal loan from any bank or non-banking financial company (NBFC) like Bajaj Finserv. Apart from the CIBIL score, other important factors also determine your loan eligibility. These include your age, monthly income, and the loan amount. 

You could also check up on the pre-approved deals available to you. For instance, Bajaj Finserv brings pre-approved offers for personal loans and more. Besides simplifying the process of availing your loan, it helps you save on time. All you have to do is share a few basic details and check out your pre-approved offer. 
Must Read: Need of Knowing Your Personal Loan Eligibility Before Applying

Varying Personal Loan Interest Rates 

Once you are done checking the eligibility criteria, you could look for varying personal loan interest rates. Your CIBIL score is an important factor to determine your competitive interest rate. If you have a low credit score, you could still get a loan—but you might be charged a higher interest rate. Look for such options with different lenders. If the interest rate is high, you could opt for a slightly higher tenor. This will help you keep your equated monthly installments (EMI) within a certain limit. 

Look For Secured Loan Option 

Are you finding it difficult to get a personal loan due to a low credit score? Look for other secured loan options. There are certain loans that you can take against your assets. Some good examples can be loans against gold, land, fixed deposit, and life insurance. 

Availing Joint Loan 

If your chances of getting a loan approved for a loan are low, you could opt for a joint loan. You can take a loan with your spouse or immediate family members. If the co-applicant has a good credit score, the loan may be sanctioned based on your combined credit rating. 

Getting a Guarantor 

A friend or family member with a good credit score can stand in as a guarantor. A combined credit score may work in your favor. 

Help From Your Employer 

Some employers may have collaborations with lenders to arrange a personal loan for their employees. You could check with your employer about the availability of such offers. 

Conclusion 

A personal loan is thus a convenient way to take care of sudden financial needs. You may need a hefty sum for various reasons like home renovation, marriage expenses, and other things. But having a lower credit score makes it difficult for you to get approval. Just follow the above tips and you could get a loan sanctioned with ease.
Must Read: 5 Ways to Increase Your CIBIL Score and Get a Quick Personal Loan

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