How To Get a Personal Loan With a Low CIBIL Score?

by Tashia J. Hansen

A good CIBIL score increases your chances of getting a personal loan. However, a borrower with an average CIBIL score can also apply and avail of a personal loan. This article discusses how you can get a personal loan with a low CIBIL score.

How important is a good CIBIL score for loan approval?

While assessing your loan application, banks calculate your ability to assume credit, called creditworthiness.

One of the many markers of a borrower’s creditworthiness is their CIBIL score, named after India’s largest credit rating agency, the Credit Information Bureau (India) Limited.

Since a borrower’s CIBIL score is the main parameter to assess their creditworthiness, it is vital for loan approval.

How does a low CIBIL score affect an instant loan approval?

If you have a low CIBIL score, it reflects poorly in your creditworthiness assessment by banks. Personal or instant loan approval is also affected by a low CIBIL score. However, you can work around a low CIBIL score and still avail yourself of a personal loan.

How to get a personal loan with a low CIBIL score?

Here are six ways to get an instant personal loan even with a low CIBIL score.

1. Prove your financial ability

If your financial condition has improved in the past, you can provide proof indicating your ability to repay the personal loan. If the bank approves this proof, it can approve your personal loan despite your low CIBIL score.

2. Request the bank for a lower personal loan amount

If a bank has denied your personal loan request citing a low CIBIL score, you can always request them to lend you a personal loan for a lower amount.

3. Get a co-applicant or a guarantor

If you require a personal loan but have a low CIBIL score, you can avail of the loan with a co-applicant or a guarantor. If the co-applicant or guarantor has a steady stream of income and a good credit score, the bank can grant you a personal loan.

4. Try to improve your CIBIL score

Your CIBIL score continues to be the most considered criterion by banks when granting you a personal loan. Hence, it is vital to start working on improving your credit score. Here are ten things that you can do to improve your CIBIL score.

5. Apply with an NA or NH as the CIBIL score in your report

If the CIBIL score in your credit report is reflected as ‘NA’ (not available) or ‘NH’ (no history), it indicates an inactive credit period of more than 36 months. In such cases, banks tend to grant their customers personal loans at a higher interest rate.

6. Double-check your CIBIL score

Lastly, you must check your CIBIL score regularly to be able to factor in the latest update. This is important to ascertain whether your CIBIL score is as low as the last time you checked it.

Once you know your CIBIL score, you can contact IDFC FIRST Bank for a personal loan. IDFC FIRST Bank is the preferred personal loan destination for borrowers as it provides customized terms and charges an affordable interest rate.

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