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Get a Personal Loan with a low CIBIL Score

Author: Poonam Dambare
by Poonam Dambare
Posted: Nov 03, 2018
cibil score

Get a Personal Loan with a low CIBIL Score

Getting a Personal Loan can relieve you with several emergency financial crisis situations, which may otherwise, proving unmanageable at your end. The Personal Loan in a way offers a helping hand to the people, who are left alone on their own and have no one to support during the times of financial crisis. When the doors of the others are closed for you, the banks and other NBFCs have their doors always open to lend you money with Personal Loan schemes.

Featuring under the unsecured loan category, his personal loan can be a life-saver during many times. Even, the Personal Loans can act as a dream fulfilling for many, who can’t wait long to accomplish their dreams and goals.

But what are the requirements of personal loans, and how a person can avail the benefits under the Personal Loan schemes?

The Personal Loans are the unsecured loans, which are one of the fastest disbursing loan types in India. The personal loans don’t require too many eligibility criteria, and a person can easily avail the Personal Loans if he/she meets some of the basic requirements of the Personal Loans.

Eligibility Criteria required for availing Personal Loans

  • Minimum age of applicant should be 21 years, while the maximum should be 65 years

  • A Person needs to Salaried or Self Employed

  • A Person needs to be in the job for at least 2 years and must be in the same job for at least 1 year with the same employer. The self employed Person needs to be self employed for at least 2 years.

  • A person must meet minimum income, which differs based on the applicant location

  • A credit score of 750 is preferred

While, all the eligibility criteria is being fulfilled by the loan seeker, what will happen, if the person doesn’t fulfill the last requirement of the Credit Score? It has been seen that a loan seeker doesn’t meet the preferred credit score of 750. So, is this the end of the road for those, who are looking for the Personal Loans? Is there any way out for those needy people? Let’s check it out!

What is a Credit Score?

A Credit Score is the score, which ranges from 0 to 900, as is provided the Credit Scoring agencies like CIBIL. The CIBIL, which stands for Credit Information Bureau, India Limited, prepares the credit score of a person based on several factors; this credit score becomes one of the salient requirement for the loans, either it is a personal loan or any other loan type. Based on the various financial information of a person as provided by the banks and other financial institutions each month, the CIBIL calculates the CIBIL Score each month for the person concerned, which acts as a deciding factor while availing a loan.

How does a CIBIL Score affect your loan applications?

The CIBIL Score is one of the deciding factors in the rejection or approval of the loan application. Either it is a personal loan or any other type of loan; it’s the CIBIL Score which tells a lot about you to the lenders. The lenders may decide against approving for the loan if you have a low CIBIL Score on your report card, which is a clear indication of your untrustworthiness attitude towards repayment etc.

The CIBIL Score is nothing, but a track record of your financial history, which is based on your exposure to the finances. The CIBIL Score not only indicates the track record but also provides an insight to the lenders, of how much are the chances of their loan going default, if they offer you the loan. The CIBIL Score thus is a deciding factor in the approval or rejection of the personal Loans and other forms of loan. At the same time, it not only serves as the deciding factor for the approval or rejection, but also acts as important criteria, in deciding the rate of interest for your loan. Thus, the better is the score, the more is the chances that loans don’t go default, and thus, the better deal can be offered to you by the banks in terms of rate of interest. While, if your CIBIL Score features low score, the chances are that, either you will be disapproved for the loan, or the banks may take a risk with you, but they may charge you higher rate of interest, for taking such a risk.

Factors affecting your CIBIL Score

There are several factors, which may affect your Credit Score and may lower down your Credit Score. Let’s dive in for the factors which generally cause a low CIBIL Score:

  • Too many running loans causes a low CIBIL Score

  • High Credit utilization ratio may bring down the Credit Score

  • Pending EMIs at your name is another reason for the drastic lowering of your Credit Score

  • Bad behavior towards the payment of Credit Card Dues and outstanding balances

  • A very high percentage of unsecured loans on your name

  • Having no credit history can also be one of the reason for no Credit Score at all

  • Too many applications for the loans in a very short duration

  • Too many rejected loans or credit cards applications

  • Settling for the Credit cards dues, with the amount lower than the dues

How to Get a Personal Loan with a Low CIBIL Score?

A low CIBIL Score can lower down your chances to get a Personal Loans. But, the doors are never completely shut down. There are several other ways, which can prove to be helpful in getting you a personal loan, even with a Low CIBIL Score. The following are some options, which can help you in getting a Personal Loan despite low Credit Score:

Check for the tie-ups from the bank and the employer

In case, you are suffering from the low CIBIL Score and you need a Personal Loan, the first thing you can do is to check for the tie-ups with the bank and your current employer. If you work in a reputed firm, there are chances that you end up with getting a Personal Loan, despite a Low CIBIL Score. In such cases, it has been seen that due to corporate tie-ups, the employees are benefited with special facilities in getting loans of all kinds at the special rates of interest and even with the adjustment in some of the eligibility criteria as laid down by the banks for the general customers.

Joint Loan

A joint Loan is another option you are left with if you carry a low CIBIL Score. Check your family member’s CIBIL Score and if they are found out with the good CIBIL Score, you can take a joint Personal Loan, taking into account of your cumulative CIBIL Score.

Get yourself a guarantor

Getting yourself a guarantor can again ensure that you can get a Personal Loan, even if you carry low CIBIL Score. Getting a Guarantor, who can guarantee the bank, that he/she is reliable to pay the loan amount in case, you default on the Personal Loan can ensure that you get the Personal Loan despite having a Low CIBIL Score.

Furnish your Salary Details and other required documents

You may take a chance with the banks, by negotiating with them, and by furnishing your income details and imbibing a sense of confidence that your salary is high enough now, to pay Personal Loan EMIs and you will not default on the loan amount. There some chances that you might end up getting a Personal loan approved, if you are having very high salary and the bank decides to take a risk with you. Prove to the bank’s officials that your income can now support EMIs very well and you can handle the responsibility of EMIs with ease.

Ask for the lower Loan Amount

In case, you are getting a negative reply from your banks, ask them to approve the lower loan amount on your name. The higher loan amount is an indication of more risk, and thus the banks may decide against approving for the Personal Loan with the low CIBIL Score, but when it comes to the Lower Loan Amount, the banks may take a chance with you by approving for the lower loan amount, despite lower CIBIL Score.

Put collateral

In case, you are not getting success in getting a Personal Loan, you can even decide on putting a collateral against your loan. Putting collateral like shares, bonds, gold, and assets can end you with getting a Loan with collateral. When you put on collateral the banks may decide against checking CIBIL Score and may consider it as a secondary aspect, since their loan is now secured with the collateral, you put on.

Look for other sources

There are banks, which work with high restrictions in approving for the Personal Loan, and most often they are seen as rejecting the Personal Loans application, if a person carries a low CBIL Score. But, leaving aside those banks, there are several NBFCs and other financial institutions, which are constantly looking to expand their customer base, and in a bid o increase that number, they can offer you a Personal Loan despite your Low CIBIL Score. You may end up paying a higher rate of interest on your Personal Loan, but the most satisfying thing is that, you will be sanctioned a Personal Loan.

Request your lender to reconsider NA Score in your CIBIL Score

In fact, the NA or NH, is an indication of the absence of the Credit history, which may happen due to several reasons. The reason like no financial history like no Credit cards, no previous loans of any kind, can return you with ‘NA’ on your credit score. Even, if you don’t have any financial records for last 3 years, the CIBIL Score can show your score as NH or NA. In such a case, you may request your bank to reconsider this aspect and can discuss your credit inactivity, thus offering yourself a chance with the Personal Loan Approval.

Look for the mistakes in the CIBIL Score

There are conditions, when the person suffers with no mistake of his/her. There are several situations, when the calculations for the CIBIL Score goes wrong, which can happen with the wrong information being entered on your name, and thus, in the process affecting your CIBIL Score. You may cross check your CIBIL Score and can raise a complaint to the bank or CIBIL, if you consider, there has been any wrong doing in your CIBIL Score.

Low CIBIL Score is not the end of the road for Personal Loans

The Low CIBIL Score can create an issue and can trouble you while getting any loan; however, having a low Credit Score is never an end of the road. There are many en route to the Personal Loans as discussed above and you can still avail Personal Loans, despite having a low CIBIL Score. However, the Low CIBIL Score might affect your loan rate of interest and you can end up with paying a higher rate of interest in your Personal Loans.

Thus, it is always recommended that keep yourself updated with the latest CIBIL Score and let yourself remain prepared for any mishappening in the future. If you are having a low CIBIL Score, try improving your score, with various ways to Improve your Credit Score and get yourself prepared before the actual need of the Personal Loans arises. Try boosting your CIBIL Score with various steps, and help you in getting into such a precarious situation, where you are rejected for any Loan, just because of Low CIBIL Score.

Keep yourself updated with the latest CIBIL Score, which changes every month and keep an eye on what factors are leading to this change. Better CIBIL Score can help you with several Personal Loan offers!

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Author: Poonam Dambare

Poonam Dambare

Member since: Aug 24, 2018
Published articles: 47

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