A credit score is a basic parameter to check before giving you a personal loan. That is why borrowers with low CIBIL scores go through an arduous experience to secure one. However, there are stills to get a personal loan if you have credit scores.
A personal loan is the best way to manage your finances when you need funds for an unexpected event in your life. Since it is unsecured and there is no requirement of collateral as security, lenders usually perform various checks, particularly your online credit score check, to determine whether you are eligible for a personal loan or not.
What is the CIBIL score, and why is it important?
The Credit Information Bureau (India) Limited (CIBIL) is a credit information company authorized by the Reserve Bank of India, to calculate the credit score of an individual borrower. Your CIBIL score indicates your creditworthiness. The CIBIL score ranges between 300 to 900, with 900 indicating the highest creditworthiness. It is simple math. The higher score you get, the greater chances you have to get your personal loan application approved.
Your CIBIL score depends on your repayment history, your payment behaviour on your existing debts. If you make on-time payments of your credit card bill and loan EMIs, you will see an increase in your scores. However, delay and default in payments reflect poorly on your credit score. Personal loan applications for CIBIL defaulters are more likely to get rejected on the spot than someone with a healthy credit history.
If your CIBIL score is 750 or above, you are considered an ideal candidate for any type of loan. Any credit score below the range of 550 will lead to rejection or a higher interest rate as you may be considered a high-risk borrower. Besides your CIBIL score, the lenders will also consider your bank balance and job security to determine your payment capacity.
How to get a personal loan with a poorly maintained credit score?
Although it is a challenge, you can still secure a personal loan with a low credit score by taking the underlying measures.
Show a stable income
A low credit score may be a constraint to your loan application, but a hike in your salary or having an additional source of income may make the lender more favourable to your loan application. Furthermore, if you prove to the lender that you have a secure job with a steady income flow, the likelihood of your personal loan application getting approved increases too.
Apply for a low personal loan amount
Borrowers who ask for a high personal loan amount with a poor CIBIL score are considered high-risk candidates. According to a lender, the chances of you defaulting on loan repayment are higher. However, if you consider applying for a low personal loan amount, you will likely get it. It is also easy to repay a low loan amount.
Consider getting a co-applicant
When you have a guarantor or a co-applicant with a good credit score, you can get a personal loan faster. Ensure you have permission from your co-applicant to complete KYC formalities along with the necessary signatures on the relevant forms.
When lenders find that your co-applicant or guarantor has a good credit score on your loan application, they may approve your application and also give a better deal. Ensure that you perform an online credit score check before applying.
Rectify errors in your credit report
Sometimes, due to an error in your credit report, your CIBIL score can get reduced, which has been giving you a hard time getting a personal loan. There may be errors on your credit report, and it happens because someone has not updated it with the latest information.
Regularly perform online credit score checks to get ahead with the issues and if you find errors, report them to the relevant authorities and resolve them quickly. An improved credit score after rectification of errors one your credit profile can get you one step closer to getting a personal loan to manage your finances.
So, if you’re planning to apply for a personal loan, but you have not decided on a lender, you can opt for the Fullerton India personal loan to get the best deal in the online loan market. If you have a higher credit score, you have a higher chance of getting a maximum loan amount with an affordable interest rate. You can also do an online credit score check on Fullerton India’s web portal and get your credit score within just two minutes.
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