Living in tough economic times implies struggling with finances and making ends meet with difficulty. Because of this, raising money to start a small business, fund an event like a wedding or even complete a housing project that has been stalled for some time is just an elusive dream. The only option you may have is to go to banks, online lenders, or microfinance institutions for a low-interest personal loan.
There are several eligibility requirements in this regard, and one of the factors that most lenders check before approving the loan is your CIBIL score. While a score of 750 or above can guarantee a loan, a lower score can prove to be a problem. That being said, it is possible to acquire a low CIBIL personal loan through research and comparison shopping.
What is a CIBIL score?
A CIBIL score is defined as a three-digit number that ranges from 300 to 900 and reflects your previous credit history. You are considered to have a good CIBIL score when your numbers are close to 900, like 700, 750 and so on, and a low score when it’s below 650. Your CIBIL score is determined by the number of credits you have earned and how well you have repaid your loans and debts. Defaulting to pay a loan gives you a bad score.
While a good CIBIL score makes it easier for you to get a personal loan from any lender, a low score puts you on an ‘if’ list and most lenders will view you as a risk.
Can you get a low CIBIL personal loan?
The truth is that most lenders prefer clients with a high CIBIL score. They are in business, and they do not want to risk losing their money. A good CIBIL score is a way of telling lenders that you are credit-worthy. However, if you are in a fix and need the lowest interest rate personal loan. But have a low CIBIL score, there is still hope. You can get a low CIBIL personal loan from several lenders, but you will need to work harder in convincing them about your potential.
With a little research online, you will find several lenders offering low CIBIL personal loans. Some have been in existence for years, while others are new. Most of them have websites, and their contact information is available online, like Bajaj Finserv customer care number, and so on.
Here is what you will need to do to avail of a personal loan with a low CIBIL score –
Prove that you have a stable income – With a previous bad credit record, you will need to prove to the lenders that you have a steady source of income. You can do this by giving the lender certified copies of your pay slip if employed or a bank statement and business records if you are a business person.
Start small – With a low CIBIL score, you need to work on rebuilding trust. No bank or lender will be comfortable giving you a huge amount of money. To get your loan approved, start with a small amount of money, which you may increase after repaying your first loan. With consistency, you may be able to qualify for a bigger loan.
Clean errors – Having a low CIBIL score does not mean that you have been defaulting before. Sometimes it is because of a mistake that has not been corrected. It is important to ensure that your credit records are up to date and accurate.
Use of guarantors – To avail of a low CIBIL personal loan, you may need to find people who can stand in for you, people who have confidence in your ability and can guarantee your potential. Most financial institutions or lenders will require you to have one or more guarantors before they can give you a personal loan.
A guarantor is a person who knows you and is willing to pay your loan if you are unable to do so. This means that a guarantor’s financial ability is also vital in ensuring that your loan is approved.
No previous credit activity – A CIBIL score is only available when you have accessed some loans and defaulted on the repayment. If you have had no credit activity for the last 36 months, you may not have a credit score. In this way, you can convince your lender to approve a personal loan for you. Unfortunately, the interest rate may be higher due to the risks involved.
Final thoughts
Low CIBIL personal loans may not constitute the usual lending activity, but it is possible to get this loan if you look around and make inquiries. It may not be the best personal loan or a low-interest personal loan, but it can provide sufficient financial back-up for you to tide over the setback and improve your financial standing.
Read Also: How To Get a Personal Loan When Your CIBIL Score is Low