Many people avail of personal loans to meet several different financial needs. Different needs such as funding your child’s education, supporting a wedding ceremony, taking a vacation, etc., can be met with the help of a personal loan. Different banks and lending institutions offer personal loans with a different set of eligibility criteria. Your CIBIL score is one of the most important criteria that will be checked by banks. Let us have a look at how you can avail of personal loans with a low CIBIL score.
What is CIBIL Score?
A CIBIL score is a 3 digit number that helps banks and lending institutions understand your creditworthiness. This score is calculated based on factors such as the amount of outstanding debt you have, your credit repayment habits, and others. This helps lenders gauge whether they can loan you credit or not. Having a good CIBIL score can help lenders easily provide you with credit.
How to Get a Personal Loan with a Low CIBIL Score?
If you have a poor CIBIL score, you can still apply for personal loans. While it might be challenging to get personal loans in an easy way, it is still not impossible. Here are a few things you can do to get personal loans if you have a poor CIBIL score.
- Pre-Qualify
Pre-qualifying for a personal loan gives you information about the loan amount, the interest rate charges, and the terms of repayment that come along with the loan. This does not affect your credit score. Especially if you are trying to identify whether you qualify for a loan or not, it is best to pre-qualify.
- Compare Lenders
The CIBIL score requirements for a personal loan vary across different lenders. Some lenders may have a lesser CIBIL score threshold compared to several others. So, depending on your credit score, you can choose an appropriate lender so that you can be eligible to apply for a personal loan.
- Have a Co-Applicant
Having a co-applicant will decrease the focus on your CIBIL score. In fact, the CIBIL score of your co-applicant will also be considered. If you have a low CIBIL score and your co-applicant has a high CIBIL score, you have more chances of availing a personal loan without any hassle.
How to Improve Your CIBIL Score?
If you have a low CIBIL score, it can help to improve the same by following a few things. Here are some tips to help improve your CIBIL score.
- Retain your old debt on your report
- Pay all of your credit card bills on time
- If you use credit frequently, opt for a higher credit limit
- Check your credit report for inconsistencies
- Repay a huge debt
Final Thoughts
While applying for a personal loan, the bank or lending institution will definitely check for your CIBIL score. It is important to maintain a good CIBIL score so that you can be eligible for a personal loan. You can also apply for personal loans on Finserv MARKETS while experiencing several benefits such as nominal interest rates, flexible repayment tenures, and minimal documentation.
