A low CIBIL score thus becomes a severe drawback when one is looking to get a personal loan. Credit scores are commonly used among lenders to determine the level of risk when extending credit. Thus, obtaining a personal loan is not out of bounds, even if one has a low CIBIL score. Here are six highly effective minor steps that you can take that will help you get a loan for salaried with a low score.
- Approach Non-Banking Financial Companies (NBFCs)
Therefore, many NBFCs are more relaxed in their lending procedures compared to authorized money-lending banks. They always offer flexible conditions with credit scores; thus, bad credit score holders can get loan approval. NBFCs look for parameters, such as your income, prospects for your monthly income, and your capacity to pay the loan. You can check it on a personal loan app.
- Demonstrate a Steady Income
This type of loan is available against a warranty in the form of property, gold, or a fixed deposit. With collateral, the risk for the lender is abated to a large extent and increases the chances of a low CIBIL score applicant being approved for the loan. Generally, secured loans are given at cheaper interest rates and on better terms. However, to be safe, it is important to relieve the risk tied to this; if you default on the loan, you will forfeit your collateral.
- Apply with a Co-Applicant or Guarantor
Credit seekers with a low CIBIL score will find that lenders do not strictly judge them based on a poor CIBIL score if they can generate an assured income. Regarding the capacity of repayments, it will be beneficial to show income proof, pay slips, bank statements, and tax computations to the lenders. Income signifies stability, and in the case of cash flow, it can negotiate for ratings and a low credit score in the estimation.
- Seek a Peer-to-Peer Lending Platform
A co-applicant or guarantor with a favorable credit score would give the lending institutions higher chances of approving your loan. A co-applicant or guarantor ensures he also agrees to pay back the borrowed money, which makes the risk to the lender less. Ensure the co-applicant or guarantor is aware of the responsibility and his creditworthiness. They want to know that they will be able to recover their money somehow, and this is where the applicant’s financial stability can work in their favor despite the poor CIBIL score.
- Improve Your Credit Score
Even though this may sound obvious, managing to boost your credit score can help acquire a personal loan. If you need to fix your credit score, then first of all, you should review your credit report, and if there is anything that is not correct, then you should dispute the credit report. This, in turn, entails being disciplined regarding outstanding balances, always making payments on time, and paying less than 30% of the credit limit available on credit cards.
- It is difficult to get a personal loan with a poor CIBIL score, but that is not out of the question. Thus, one can increase his chances of getting a loan by considering such strategies as contacting NBFCs, going for secured loans, providing a regular income, getting a co-applicant, considering P2P, and getting a better credit score.
As may be seen in the following strategies, some of them come with a little higher cost or risk, but they all offer a way of getting the financial help you need.
