How To Get A Personal Loan With A Low CIBIL Score?

 It is imperative for any company or individual to have a satisfactory credit profile in order to qualify for a loan; however, having a low CIBIL score can impede one's access to a loan or other financial support. A score of less than this suggests that the individual has a prior history of credit failure or late payment, which can lead to a decrease in one's credit score. Nevertheless, there are ways to secure financing despite having a poor credit profile. Here are five examples of how to obtain a CIBIL loan with a score lower than this.

1. Consider Getting A Loan From An NBFC

An NBFC can provide assistance in the event that a personal loan is declined by a renowned bank. In fact, some Non-Banking Financial Companies (NBFCs) were established to facilitate access to credit for individuals who are not able to secure formal and established lenders. It is important to note, however, that if a personal loan is secured by such a non-banking financial company, the individual may be charged higher interest rates, and may be obligated to repay their debts in a shorter amount of time.

Also Read: Financial Tips For Small Business Owners

2. Apply For A Loan With A Co-Applicant Or Get A Guarantor

Individuals without a credit history or a low credit score can still be eligible for a personal loan application if they have either a guarantor or a co-applicant. Additionally, if the guarantor's credit score is high and the applicant's credit history is good, the applicant may be able to secure a higher loan amount with the lender. Nevertheless, it is essential to have the necessary KYC documents and permissions in place to qualify for a loan application.

Also Read: What’s The Difference Between Secured And Unsecured Loan?

3. Consider Applying For A Small Loan Amount

If your CIBIL score is low, it is more likely that you will be declined for a loan of a larger amount. This is because the lender may view you as a high-risk borrower. However, if you wish to improve your credit score, you can take a loan of a lesser amount and repay it on time, thereby increasing your creditworthiness and earning the lender's confidence. This will enable you to reapply for the loan and receive a larger amount.

Also Read: Top 5 Factors Affecting Your CIBIL Score

4. Get A Loan Against Collateral

Secured loans are the best option if you want to get a cheap CIBIL loan quickly and easily. These loans are offered by banks and other non-banks financial institutions, and you have to provide some kind of security as collateral. These loans can be applied for against assets like real estate, gold, a fixed deposit, etc.

Also Read: Why Unsecured Business Loans Have Become Popular In India?

5. Work On Improving Your CIBIL Score

The CIBIL score is a record of a borrower's creditworthiness to the lender. Basically, it tells the lender if they can trust the borrower with money. It's really important to keep a good CIBIL score if you want to get a personal loan. Even though you can get a personal loan if your CIBIL score is low, it's a good idea to work on improving it in the future.

Final Thoughts

Despite the fact that your CIBIL score may be lower, this does not necessarily preclude you from being eligible for financial aid. With minimal effort, lenders are willing to offer loans irrespective of your credit score. However, it is important to note that borrowers with a lower credit score may be subject to higher interest rates than those with a higher score, and it is advisable to strive to improve your credit score over time.