Thanks to online processes, the popularity of instant personal loans has increased significantly over the past decade. Accessing funds is relatively easy as there is no need to worry about setting up collateral and there are no restrictions on how the funds can be used.
However, if you apply instant personal loans, it is essential to have a correct CIBIL score. Personal loans are unsecured, so this three-digit number represents your creditworthiness. It assures the lender of your credibility as a borrower to reliably repay the loan on time.
But what if your CIBIL score is low? Then you need to keep in mind some tips to access financial products.
Top 5 – Tips To Get Instant Personal Loans Even With Low CIBIL Scores
Here are some tips for getting a personal loan even if your CIBIL score is low.
meet income criteria
All financial institutions that offer personal loans have minimum income standards, and a certain monthly or annual income is required to repay the loan. If you can meet and exceed this requirement, you can get a personal loan without having a high CIBIL score.
Well, the reasoning behind this tip is that with proper income support, you can easily pay off your loan and are less likely to default. Lenders can therefore be convinced to extend their credit. However, this requirement varies depending on your choice of loan company, so check the income-related criteria before applying.
Another point to remember is that you can add income from other sources of income, such as rental income and interest income, to increase your total income and qualify for a loan.
Choose a joint personal loan
Choosing joint credit is another way to improve your personal loan eligibility. Now, in the case of joint loans, the lender considers the borrowing capacity of both applicants. Therefore, even if the CIBIL score is low, a co-applicant with high creditworthiness can still get a loan on good terms.
Additionally, when applying for a joint personal loan, the lender considers the combined income of both applicants to determine eligibility for the loan. So you can easily exceed your monthly income requirement and get the funds you need.
Choose a lower loan amount
Another way to take advantage of personal loans with a low CIBIL score is to settle with a low credit amount. Given your low credit score, lenders will perceive you as a high-risk borrower and be reluctant to approve your desired loan amount. From a lender’s perspective, they want to mitigate credit risk by not approving high value personal loans with a high probability of default.
However, if you apply for a lower loan amount, you are more likely to be approved as the loan risk is relatively low.
Ask your lender to consider your case as NH or NA
There are many reasons behind a low credit score and credit inactivity is one of them. So if you find yourself in the same situation and have had no credit activity on your account in the last 36 months, ask your lender to consider your case as NH (no history) or NA (no history). .
In this situation, you can talk to your lender to discuss why there is no credit activity, i.e. a low credit score. If you discuss this with your lender, you may be able to persuade them to approve the loan you need.
Apply for a loan from a reputable financial institution
The next strategy for obtaining a personal loan with a low CIBIL score is to apply for a loan with which the financial institution already has a partnership. For example, let’s say you have already paid off other loans from your financier and have completed your repayments on time and on time. If so, the financial institution has a good relationship with you and may trust you with another loan even if your current CIBIL score is not up to par.
These are effective strategies for getting a personal loan without having a high CIBIL score. Now let’s understand the significance of this three-digit number and how to improve it for a more favorable borrowing experience.
The Importance of Your CIBIL Score and How to Improve It
Having a good CIBIL score is important here.
- The main importance of a good CIBIL score is that it puts you in a better position to negotiate better loan deals. This includes lower interest rates, more flexible repayments, and longer repayment terms.
- A higher CIBIL score can also apply for a higher loan amount. Because the lender guarantees your ability to borrow, they may be able to give you a higher loan amount or the amount you want.
- A good CIBIL score may also result in faster approval of your loan application. Lenders can approve your loan application without delay because you meet or exceed the CIBIL score required for loan approval.
- Another advantage of having a good CIBIL score is access to various offers such as minimal processing fees, nominal foreclosure fees, etc.
Here are some strategies you can take to improve your CIBIL score:
- Paying your dues on time is one of the easiest ways to improve your CIBIL score. This includes loan EMIs and credit card bills.
- Keeping your credit utilization low also helps improve your CIBIL score.
- To improve your CIBIL score, it’s important not to apply for more than one loan or credit card at once.
- Checking and fixing errors on your credit report can also have a positive impact on your CIBIL score.
- Maintaining a healthy credit mix is another way to improve your CIBIL score. This means that having the right number of secured and unsecured credits in your portfolio will improve your ability as a borrower.
The last word
A personal loan can be an excellent option to meet any financial requirement, especially in emergency situations. However, to ensure you get your desired loan amount without delay, you need to get a good CIBIL score for him. But even if you don’t, the strategies described in this article can help your end.