Be it for a medical emergency, a sudden business opportunity, a big-ticket purchase, or a major repair, a personal loan could give you access to extra cash, almost instantly. But, in order to get a personal loan, you must first satisfy certain conditions.
An important factor that a lender considers while reviewing your loan application is your credit score. While most lending institutions prefer those with a high score, it is not impossible to get a loan with low CIBIL score as well. Let us see how.
Showing proof of a regular income could reinforce your application because it is considered to be an indicator of your ability to repay the loan on time. If you are self-employed, you can submit audited financial statements. At the end of the day, it is your prerogative to show your financial standing in a positive light. It may be easier for you to get an NBFC personal loan for a low CIBIL score, provided you can convince the lender that you have the resources to repay the loan on time.
Ensure that your credit report is up-do-date and error-free. For instance, the CIBIL report may not always reflect changes in your credit score immediately. Check whether your lender is using the CIBIL report with the updated score. If you find an error in your score, use the CIBIL portal to initiate a dispute resolution request. Add supporting documents and evidence to validate your claim. After verifying your claim, CIBIL will update your score report.
If you have not used your credit card for a sufficiently long period of time or don’t have a credit history longer than six months, it will be reflected in your credit report with a score of 1 or as NA or NH. While this doesn’t necessarily mean a poor credit rating, some lenders have policies that prevent them from granting loans to borrowers with such scores. However, if you have a reasonable explanation, a lender may be willing to consider and even approve your loan application.
To get an instant loan for a low CIBIL score, try applying for a loan which is on the lower side. Lenders usually associate higher risk to a bigger loan amount. Since a smaller loan is usually viewed as lower in risk, a lender may be more amenable to your application.
A guarantor is a person who guarantees the repayment of the loan on your behalf. So, essentially, the liability of making the loan repayment lies with the guarantor. Moreover, a guarantor is a person with credibility and a high credit score. Getting a personal loan for a low CIBIL score could become slightly easier if you have the backing of a guarantor.
The CIBIL score represents your creditworthiness as a loan candidate. It looks into how well you have managed your previous loans and how prompt you were with repayments. Since these are important considerations for any lender, your CIBIL score becomes an important eligibility criterion.
Lenders want to reduce their risk of lending by granting a loan to someone, who is capable of repaying it in full. For this reason, financial institutions and banks, as lenders, set a minimum credit score eligibility criterion. Typically, a score of 750 is considered good and gets progressively better as you go higher. But, lenders like Navi offer instant cash loans to individuals with CIBIL scores of 650 or more.
But as discussed, even those with low scores may be eligible for a personal loan with a bad CIBIL score, provided they satisfy certain other conditions. For example, pledging an asset, which can be liquidated to recover the loan if you default, or applying with a co-lender, who has a good financial standing.
The eligibility criteria usually varies from lender to lender. So, check them carefully before applying for a loan.
You could build a good credit history by paying your dues on time. This includes your loan EMIs and even your monthly credit card bills. To stay on track with repayment of your loans, you could link your bank account and set up auto-debit.
Your credit card comes with a credit limit. This is the maximum amount you can spend on your credit card every month. However, utilising the available credit in full can be detrimental to your credit score. Ideally, you must spend less than 30% of your credit limit to maintain and build a good CIBIL score.
There is a chance that your credit report has factual errors. CIBIL sometimes overlooks the recent transactions, which can negatively impact your score. If you find any errors in the report, make sure you raise a query with CIBIL and get it rectified at the earliest.
When you check your own credit score, it is counted as a soft enquiry. This does not affect your score, no matter how often you check it. However, if a lender extracts your report from CIBIL, it is counted as a hard enquiry. This is done every time you ask for credit. Too many hard enquiries can also affect your score.
There are various kinds of loans, short-term and long-term, secured and unsecured, and loans for different requirements. Having diversity in your credit portfolio will help you manage your finances better. Have a fair mix of short- and long-term loans, revolving credit, secured, and unsecured loans, etc. Please note that too many unsecured loans can also affect your score negatively. Thus, make sure you only apply for loans that you can repay on time and balance out the unsecured loans in your portfolio.
The obligation to manage and repay a loan lies with both the borrowers, in case of a joint application. Default on a loan by one will affect the credit score of the other as well. For example, if there are add-on credit cards on your primary credit card account, make sure that dues for all the others are settled on time. Besides, you must decide and ensure optimum credit utilisation on all the cards or credit lines.
Closely monitor your credit score. It is advised that you check your credit score at least once every 6 months. This will not only help you stay on track with your financial goals, but also report factual errors in the CIBIL report, if any.
To apply for a low CIBIL personal loan, you will need the following documents:
Having a stable income is a must while applying for a loan, especially if you have a low CIBIL score. This gives the lender more confidence in you as a loan candidate. Typically, the minimum monthly income requirement for a personal loan is ₹15,000. However, this could vary from one lender to another.
You must show proof of employment when applying for a loan with low CIBIL score, whether you are self-employed or salaried. If you are self-employed, the lender may ask for audited financial statements to establish how financially stable you are. On the other hand, for employees, your application can get a boost if you work with a reputable company.
Getting a personal loan for a low CIBIL score is certainly possible. Case in point is Navi Instant Cash Loan, which is available to individuals with CIBIL scores as low as 650.
In fact, there could be situations where getting a personal loan with low cibil score, may still be the most viable solution to your last-minute cash needs. By showing a proof of regular income or pledging an asset, you may successfully get your loan approved. Alternatively, wherever possible, you could try getting a guarantor on board.
Yes, there may be instances where your credit report has errors or the latest information is not updated. In such a case, you must raise a complaint with CIBIL and upload relevant documents to support your claim. Once your claim is validated, your credit score will be updated.
Having a job helps you get a loan faster. If you don’t have a job, you may need a co-signer to apply for a loan. However, ensure that the co-signer has a good financial standing and strong credibility.
In general, to get a low cibil personal loan, you will need to show your identity proof, address proof, salary slips, bank statements, and passport-size photographs. However, please check with your lender for the document list since it can be different for different lenders.
Yes, credit cards have a massive impact on your credit score. If you pay your monthly credit card bills on time and maintain low credit utilisation, your score can significantly improve with time.
No Credit Check Loans in IndiaWhat is No Credit Check Loan? A ‘no credit check loan’, as the name suggests, does not... Read More »
Instant Cash Loan in 1 Hour Without DocumentsInstant Cash Loan in 1 Hour Are you in any emergency cash crisis and in need of an instant cash ... Read More »
Personal Loan on PAN Card – Check Your Eligibility & Apply Now!Do you need urgent cash to pay for an unexpected expense, a pending bill, or a medical emergency? A... Read More »
What are Short Term Loans? – Key Features and BenefitsShort Term Loan A short term loan provides urgent assistance for an individual’s financial req... Read More »
Interest Rate on NBFC Personal LoanNBFC Personal Loan Non-Banking Financial Companies (NBFCs) are becoming increasingly popul... Read More »
How to Apply for a Pre Approved Personal Loan?Pre Approved Personal Loan Pre-approved loans are instant personal loans that are offered by ban... Read More »
Personal Loan Disbursal ProcessA personal loan is an unsecured loan which you can avail to deal with any type of financial emergen... Read More »
Unsecured Loan – Types, Benefits, Interest Rate & EligibilityWhat is an Unsecured Loan? An unsecured loan is a type of loan that doesn't require any collater... Read More »
Small Cash Loan on Aadhaar Card without PAN CardSmall cash loans are type of personal loans offered by banks and NBFCs to meet short-term financial... Read More »
What is a Fast Loan – Features, Interest Rates and How to Apply Online?What is a Fast Loan? A fast loan is an instant personal loan that allows you to borrow money wit... Read More »
How to Get a Personal Loan without Income Proof?When you apply for a personal loan, in most cases, lenders would ask you to provide income proof to... Read More »
Long Term Loans in India – Features, Benefits and Interest RatesLong Term Loan Long-term loans could be secured or unsecured loans that are repaid over an exten... Read More »
Top 10 Chit Fund Schemes in India in 2023Chit funds are one of the most popular return-generating saving schemes in India. It is a financial... Read More »
10 Best Gold ETFs in India to Invest in March 2023Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physica... Read More »
10 Best Demat Accounts in India for Beginners in 2023Creation of Demat accounts revolutionised the way trades were conducted at the stock exchanges.&nbs... Read More »
20 Best Index Funds to Invest in India in March 2023What is an Index Fund? An index fund is a type of mutual fund or exchange-traded fund (ETF) that... Read More »
Best Arbitrage Mutual Funds to Invest in India in March 2023Arbitrage funds are hybrid mutual fund schemes that aim to make low-risk profits by buying and sell... Read More »
10 Best SIP Plans in India to Invest in March 2023What is SIP? SIP or Systematic Investment Plan is a method of investing a fixed amount in ... Read More »
10 Best Corporate Bond Funds in India to Invest in March 2023Corporate bond funds are debt funds that invest at least 80% of the investment corpus in companies ... Read More »
10 Best Bank for Savings Account in India 2023 – With Interest RatesSavings account is a type of financial instrument offered by several banks. It lets you safely depo... Read More »
All information is subject to specific conditions | © 2023 Navi Technologies Ltd. All rights are reserved.
FEE FREE MONTH
No Processing Fee on Cash Loan