When applying for a personal loan, your CIBIL score is one of the first things that the lender looks at. This information helps banks and lending institutions to evaluate the creditworthiness and repayment ability of an individual applying for a loan. So, does it mean that people who have a high CIBIL score are the only ones eligible for a loan? No, you can get a loan despite having a low score or no CIBIL score.
Let’s have a look at some of the ways through which you can get a personal loan without a CIBIL score.
1. Opt for Collateral Based Loans
Usually, personal loans are collateral-free and do not require security, but this is only applicable if you have a high CIBIL score. On the other hand, if you have a low or no CIBIL score you will have to offer security on a personal loan. You can pledge any of your valuable assets as collateral on the loan. Doing so will make it easier for you to obtain a loan from the lender of your choice.
2. Prove your Creditworthiness
To approve a loan application the lender always looks for a creditworthy borrower. If you have a stable source of income you can easily get a personal loan from any lender. Even if you have a low or no CIBIL score at all displaying your salary slip or bank statements as proof of your income. This will help assure the lenders of your ability to repay the loan amount on time.
3. Get a Guarantor for the Loan
Applying for a personal loan with a co-applicant or a guarantor will increase your chances of getting the loan approved. However, make sure the guarantor has a steady income and if your co-applicant is a family member they should be informed beforehand regarding your intentions of getting a personal loan. To successfully apply, the co-applicant needs to fulfill the KYC process. The lenders will then run a check through the bank statements and credit history and will most likely approve your loan application if the co-applicant meets the criteria.
4. Apply for a Lower Loan Amount
If you have a low credit score it's best to avoid applying for a higher loan amount, as the lender may not be willing to sanction your loan since they may doubt your creditworthiness. Hence, it is advisable to apply for a lower personal loan amount since the interest rates charged on the loan will be less. This will ultimately increase your chances of getting the loan approved.
5. Request your Lender for a NA or NH on your Credit Report
The History not Available (NA) or No History (NH) on your credit report marks the absence of any previous credit activity and credit in the last 36 months. In such cases, you can discuss with your lender regarding your credit inactivity. The lender will take your situation into consideration and it is likely that you will be offered a personal loan at a slightly higher rate of interest.
6. Check your Credit Report
It is always best to check your credit report as there are possibilities of errors in your credit statement. Such errors can have a direct impact on your CIBIL score. Hence, always check your credit score, and if you find any errors get it corrected as soon as possible. You can file a dispute with CIBIL regarding such errors. This will not only help improve your CIBIL score but will also make it easier for you to get a personal loan.
7. Consider Peer-to-Peer Lending (P2P)
With this method, you can get a personal loan without depending on your credit score. You can borrow directly from individuals or investors, and do not have to solely rely on traditional financial institutions. P2P platforms assess your income, employment history, and overall creditworthiness. This can help you fetch loans at flexible terms with quick approvals. Depending on your profile, you may also get lower interest rates. However, it’s essential to carefully review the terms and conditions of the loan before proceeding.
CIBIL score is essential for accessing credit and managing your financial health. Lenders rely on this score to evaluate your creditworthiness and determine the risk of lending to you. A high CIBIL score, usually above 750, often can lead to quicker loan approvals, lower interest rates, and higher borrowing limits. On the other hand, a low CIBIL score can lead to higher interest rates or even rejection of loan applications. Maintaining a strong CIBIL score is crucial for unlocking favourable credit opportunities and achieving your financial goals.
In case of late updating or wrong entries in the database by CIBIL may result in some borrowers losing out on acquiring loans. Hence, it is necessary for you to keep track of your credit report and maintain a good CIBIL score by making timely repayments. At Bajaj Markets, you can check your CIBIL score for free and also obtain a Credit Report. That will provide you with detailed analysis of your financial health and ways to maintain it in the future. Getting a score check done will give you a better understanding as to whether your personal loan application will be approved or not.
