How to get personal loan with low CIBIL score?

 

Getting a personal loan with low CIBIL score can be tricky, but it is not impossible. A low CIBIL score indicates a higher risk to lenders, which often results in higher interest rates or loan rejections. However, there are several strategies you can use to increase your chances of approval:

 

 1. Look for Lenders Who Provide Personal Loan with Low CIBIL:

   - Non-Banking Financial Companies (NBFCs): NBFCs and fintech lenders are often more flexible when it comes to credit assessments compared to traditional banks. Some NBFCs specifically provide personal loan with low CIBIL scores.

   - Online Lenders: Many online platforms or digital lenders offer personal loans to individuals with low credit scores. However, these loans may come with higher interest rates or shorter repayment terms.

   - Fintech Lenders: New-age fintech platforms may have more lenient eligibility criteria and could approve loans even with low CIBIL scores.

 2. Provide a Co-Applicant or Guarantor

   - Co-Applicant: Having a co-applicant with a higher CIBIL score and stable financial standing can improve your chances to get your personal loan with low CIBIL score. The lender will assess both the primary applicant’s and the co-applicant's creditworthiness.

 

 3. Offer Collateral for a Secured Loan

   - If you have valuable assets, you can offer collateral to secure the loan. Lenders are more willing to approve your personal loan with low CIBIL score.

   - Examples of collateral include property, gold, fixed deposits, or life insurance policies.

   - A secured personal loan can be easier to get personal loan with low CIBIL score as the risk to the lender is mitigated.

 

 4. Consider a Smaller Loan Amount

   - Lenders may be more willing to approve a loan if you ask for a smaller amount. A smaller loan is less risky for lenders, so they may be more likely to approve your application for personal loan with low CIBIL score.

   - Once you repay this smaller loan successfully, you can build your credit history and improve your chances of securing larger loans in the future.

 

 6. Apply with a Strong Relationship with the Lender

   - If you have a strong relationship with your bank or financial institution (for example, you have a salary account or have maintained a good banking history), you may have a better chance of getting a personal loan with low CIBIL score.

   - Some banks may consider factors other than credit score, such as your banking relationship, income, and account activity.

 

 9. Explore Employer-Backed Loans

   - Some companies offer employee loans or salary advances at lower interest rates, especially if you have been with the company for a long time. This is a good option if you are looking for a smaller loan and have a stable job.

 

 10. Consider Short-Term Loans or Credit Lines

   - If you need immediate funds, some lenders may offer short-term loans or lines of credit that can be easier to obtain than long-term personal loans. These loans may come with higher interest rates and stricter repayment terms, but they can serve as a temporary solution.

 Key Considerations:

- Higher Interest Rates: Be prepared for higher interest rates, as lenders consider your low CIBIL score a risk factor. If possible, try to negotiate for a better rate or explore options that allow you to pay off the loan earlier to reduce interest costs.

- Loan Tenure: You may also be offered a shorter loan tenure, which can result in higher monthly payments. Make sure you can afford these higher payments before accepting the loan.

- Loan Amount: Lenders may offer a smaller loan amount compared to what you apply for, especially if your credit score is low.

 

 Conclusion:

While it may be difficult to get a personal loan with low CIBIL score, it is possible if you are willing to explore alternative options. You can improve your chances by offering a co-applicant, collateral, or applying with a smaller loan amount. If none of these options work, focusing on improving your CIBIL score for the long term will increase your chances of getting better loan terms in the future.

 

Tips: getting loan with low CIBIL score is very tough and challenging, but consulting to financial advisors and credit consultants can increase the chance to get it, as their experience and knowledge of financial world can guide you to a better path.