Imagine you’re in a position where an unexpected expense arises—perhaps a medical emergency, a sudden house repair, or even a trip you’ve been planning that needs to be paid for right now. You check your bank balance, and it is insufficient to meet the cost. To add to the burden, your credit score isn’t in great shape. Getting a finance loan appears impossible, right?
But it doesn’t have to be. Even with a low CIBIL score, there are ways to get a personal loan to cover unexpected needs. Understanding your CIBIL score is critical when applying for personal loans. Let’s break down how you can secure a loan when your credit score isn’t great.
How to get a personal loan with a low cibil score:
When discussing obtaining a personal loan, the first thing that generally comes up is the CIBIL score. The credit bureaus assign a CIBIL score, which is a three-digit numerical measure of an individual’s creditworthiness ranging from 300 to 900. It provides a snapshot of your credit history and helps lenders assess the risk of granting you credit.
Your CIBIL score has a direct impact on several parts of the easy personal loan application procedure. A higher CIBIL score indicates that you are a low-risk borrower, increasing your chances of loan approval. Those with higher credit ratings are more likely to get loans with lower interest rates. A good CIBIL score may qualify you for credit cards that offer better incentives or perks.
Some employers may examine your credit score as part of the background verification process, especially for positions with financial responsibility. A low CIBIL score might be a significant barrier to obtaining a personal loan or salary loan online.
When applying for loans with a poor credit score, you are more likely to be rejected outright or approved on less favorable terms. If you are authorized, expect significantly higher credit rates than individuals with superior grades. Traditional banks and financial organizations are more likely to reject applicants with scores below 600.
A low CIBIL score may also result in lower credit limits for credit cards and other financial goods, limiting your borrowing capacity. If you’ve been a long-term customer with a good financial history, your chances increase dramatically. Banks may be willing to offer you more flexible, fast loan terms if they believe you have a strong financial foundation. Consistent transaction history and other associations, such as fixed deposits or savings accounts, can benefit you.
Do not underestimate the power of paperwork. When applying for a loan, make sure to have all of your eligibility documents and documentation ready. These documents can build a more positive picture for the bank, demonstrating that you are a low-risk borrower despite your low CIBIL score.
Non-banking financial companies (NBFCs) are more flexible than traditional banks. They often consider giving Unsecured personal loan to those with lower CIBIL scores. However, this leniency comes with a higher interest rate than regular banks.