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10 tips to get personal loans despite having low credit score or CIBIL score

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Credit score is where most applicants lose out on, especially when half of them have no idea what credit score is in the first place


10 tips to get personal loans despite having low credit score or CIBIL score

Banks do not give unsecured loans like personal loans as easily as they do secured loans like home loan or auto loan. They take various parameters into consideration and not everyone can pass the stringent eligibility criteria. Credit score is where most applicants lose out on, especially when half of them have no idea what credit score is in the first place. Lenders are totally dependent on CIBIL (country’s biggest credit bureau) among others to understand customers’ past credit behavior and hence, credit worthiness.

What do you think is the next step if your credit score is less than satisfactory and you’re in dire need of money? Don’t worry. It is not the end of the world if your score is bad at the moment. Building back credit score takes time (at least 6 months). Meanwhile, here are ways to get personal loans despite having low credit score:

1. Approaching non-traditional or alternate lenders

While banks may rebuff you mercilessly, there are alternative lenders who are slightly more ‘tolerant’. For instance, Qbera offers one such personal loan product that is specifically designed for salaried employees above age 23 with high earning potentials. They offer emergency loans if your CIBIL score is 625 and above. A huge respite when you compare this to the 750-score that banks demand.

2. Having a good salary at present

Your bad score may be the result of your credit behavior when your income was less. If you have a better job (and hence a better salary) now, you can convince the lender that you are more than capable of repaying the loan without defaulting.

3. Getting the help of spouse or other close family member or friend

Your CIBIL score may be low; that doesn’t mean your spouse’s is. If you can convince him/her to be a joint loan applicant, chances for approval are more.

4. Applying with the same lender

Most lenders that provide quick personal loans follow a one-record format. If you have already received loan from them, they might lend to you again no matter what the current score is.

5. Applying to lenders that caters to people with low CIBIL Scores

Many online lenders understand that a low credit score doesn’t necessarily translate to low credit worthiness. There could be plenty of reasons for a less-than-ideal score due to technicalities.

6. P2P lending for personal loans

Quite a popular lending trend in developed countries is peer-to-peer lending, it is not that common in India. Customers haven’t taken to it because the loan amount offered is small while the rates are high.

7. Work on improving your credit score

Get a credit report from any of the 4 credit bureaus in India and check how and why you slipped. If there are errors, you can get it rectified. If you have defaulted, focus on paying the dues on time and clearing long-due credit card debts and bills.

8. Mixing it up wisely

If you have taken more loans, please ensure that you have a wise mix of secured and unsecured loans rather than having only one kind. Banks deem this as risky credit behavior and might refuse to loan to extend loans to you.

9. Paying taxes

Even if your CIBIL score is low, if you are the kind to pay your taxes diligently, lenders might give you a pass.

10. Getting loan against collateral

Yes, personal loans are unsecured loans. But if you need cash urgently, pledging your gold, shares or FD might ensure faster approval.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the publication

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  1. Pingback: How your social media profile affects your credit score and some tips to improve it

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