Personal Loan Low CIBIL Score
Creditworthiness plays a crucial role in personal loan approvals. Applicants with high CIBIL scores are usually preferred by banks as they communicate greater repayment potential to the lender. Loans with low CIBIL scores, however, ensure that everyone is included in the personal loan spectrum. They make sure that poorly rated borrowers, in need of financial assistance, also enjoy ready access to personal loans.
Personal loans against low credit scores might be slightly difficult to manage. There is greater scrutiny from the bank and the loans are often offered at higher interest rates. Stay tuned as we discuss the most effective ways of borrowing a personal loan for applicants with poor credit scores.
How to Get a Personal Loan With a Low CIBIL Score
Here are some of the best ways to get a personal loan while having a low credit score.
- Showcase High-Income Levels: Income levels play as big a role, if not bigger, in establishing a borrower’s repayment potential as their credit score. Banks are quick to approve loan requests of applicants who showcase high and steady income.
- Opt for Secured Loans: Loans for low CIBIL scores can also be gained against an asset. If a borrower is unable to establish their creditworthiness, submitting an asset assures the bank and encourages them to sanction the loan.
- Submit Joint Applications: Borrowers with low scores of their own can apply for a personal loan with a co-borrower having high credit scores. The ratings of the co-borrowers act as a guarantee for the bank and assure them of the loan’s repayment.
- Apply for Smaller Loan Amounts: Smaller amounts imply a lesser risk for the bank. Therefore, applicants applying for smaller accounts might get loan approvals with less scrutiny.
- Improve Your Credit Score: The most important advice for borrowers with low credit ratings is to improve their score over time. Consistently showcasing positive financial behaviour can help improve credit ratings and make them eligible for easy loan approvals.
Tips to Get a Personal Loan With a Low CIBIL Score
Borrowers with low credit scores must keep these things in mind while applying for a loan:
- Be prepared for high rates of interest
- Avoid applying at multiple banks as it can hamper your existing ratings
- Apply smartly according to your repayment potential
- Be wise with your collateral while applying for a secured loan
- Read the T&Cs of the loan agreement carefully
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Frequently Asked Questions (FAQs)
Can I get a personal loan if my CIBIL score is low?
Yes, it is possible to get a personal loan even with low CIBIL scores. However, loan terms might be more stringent than regular personal loans.
Can I get a loan with a 650 credit score?
Yes, loans can be gained with a credit score of 650. However, the banks might consider your application with thorough scrutiny and charge higher interest rates upon approval.
Is 720 a good CIBIL score?
720 can be considered a decent score. However, a rating between 750-900 is typically regarded as a good score.