The concerned lender would take into consideration the credit history of an applicant before providing a personal loan. However, a low CIBIL score makes it extremely complicated to obtain one. But people with a minimum CIBIL score could still avail of a personal loan by going through the below mentioned steps.
A personal loan proves to be beneficial for those who are struggling to cope with the financial crisis. Therefore it is essential to perform a comprehensive check regarding the lender online. Take advantage of the personal loan eligibility checker which gives you a rough idea about the maximum loan amount he/she is eligible for.
An applicant should initially focus on CIBIL or credit score. They should get familiar with the significance of acquiring a good CIBIL score. Let us discuss the importance of the CIBIL score.
- CIBIL score is a clear indicator of an applicant’s creditworthiness. CIBIL which is referred to as The Credit Information Bureau Ltd. is a prominent credit agency governed by the Reserve Bank of India to estimate the CIBIL score of an individual.
- CIBIL score ranges from 300 to 900 and 900 is regarded as the best score. As a result, one should try to obtain a maximum CIBIL score and they are most likely to be considered for a personal loan.
- CIBIL score is based upon the credit history, timely repayment of outstanding dues such as a loan on EMI’s, credit cards, etc. A slight default in monthly payments would affect or reduce the CIBIL score.
- An applicant must secure a score of at least 750 to be eligible for a personal loan application.
Now we will focus on how to get a personal loan with a minimum CIBIL score: —
- Submit income proof to cover repayment of the loan: — Even though an individual has a poor CIBIL score, a surge in monthly salary is most likely to be reconsidered by a lender. It would be better if you are able to submit proof that you hold a secured job with a steady flow of income. This would enhance the possibility of your loan being approved.
Note: — A higher rate of interest might be charged by the concerned lender
- Aim for a minimum personal loan amount: — The concerned lender might regard you as a high-risk applicant when you request a huge loan amount with a minimum CIBIL score. From the lender’s perspective, the chances of default payment from your end are high. So, it is better to apply for a minimum loan amount and this is most likely to be taken into consideration by the lender. Even loan repayment could be carried out with ease.
- Secure a guarantor or consider applying for a joint loan: — Despite having a low CIBIL score, possessing a guarantor with an exceptional credit score would help you obtain a personal loan quickly. But it is essential to seek permission from the guarantor or a co-applicant to execute KYC procedures and relevant signatures wherever applicable.
- Rectify errors in the credit report: — One might be encountering a tough time in securing a personal loan with a poor CIBIL score. The chances of misreporting and flaws in a credit report are high and this could be due to the failure of regular updates regarding records. Therefore, it is up to the applicant to keep track of the CIBIL score on a daily basis. If in case you come across any errors, then he/she should immediately report it to the concerned authorities and clear it ASAP. This is helpful in enhancing the credit score and makes you an ideal candidate for securing a personal loan.
- Ask the lender to reconsider the application: — The process works out by requesting the concerned lender to consider an application with NA or NH marked on the credit report. The credit period might be inactive for the past three years or the absence of a credit period is responsible for not having a good credit score in the CIBIL report. Therefore it is up to you to interact with the concerned lender and ask why credit inactivity occurred. In such cases, a loan might be sanctioned but with a higher rate of interest.
Related Articles: How to Apply for Low Salary Personal Loan
Conclusion
Even though the above-mentioned measures would assist you in securing a personal loan despite having a low CIBIL score, you should have a steady flow of income to repay the outstanding dues within a stipulated period of time. In case of any default payment, your CIBIL score would fall drastically.
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