While it is wise to plan your objectives around your financial capabilities, there may be situations where you may have to dip into your financial reserves. Ideally, this is something you want to avoid and this is when a loan from the right lender can help. Whether you need the funds to pay for higher education, travel, or home renovation, a personal loan can come in handy. But you first need to qualify for funds, and most lenders will require you to have a CIBIL score of at least 750. If you are unsure about your score and want to do a CIBIL score check, free services are available.
Knowing this information is key, as lenders may not offer easy approval if you don’t have the required score. Fortunately, even with a low CIBIL score, you can get a personal loan. Here’s how.
Borrow a smaller sanction
Your CIBIL score dictates your creditworthiness and lenders are less likely to offer you a large sum without an adequate score. This is because the lender incurs a greater risk by lending to a borrower with a low score. However, you can still get approved for a loan if you apply for a smaller sanction. For instance, top lenders will offer up to Rs.25 lakh as a loan and while you will not get the full sanction with a low score, you may be able to get approved for a smaller one, if you can provide the necessary proof. Moreover, by borrowing a smaller sum, you have the opportunity to repay it consistently and build your credit score too.
Apply for a joint loan or with a guarantor
If you have a low CIBIL score and do not meet the lender’s requirement, you can still get the loan by applying with a guarantor. Here, the lender considers both applicants' CIBIL scores and credit profiles while approving the loan. As such, applying with a guarantor with a good credit profile and steady finances greatly improves your chances of getting approval. What’s more, you may even be able to qualify for a much higher sanction. This is also true if you co-apply for the loan as the responsibility of repayment is shared by all applicants. So, if you need a large sum and your CIBIL score isn’t high enough yet, you should request relatives or friends to either co-apply or become a guarantor.
Show proof of income to support loan repayment
To approve your personal loan application, the lender must be confident in your ability to repay the amount. Since it is an unsecured loan, lenders rely on your CIBIL score and your financial documents to assess your capabilities. However, in some cases, it is possible to have a low CIBIL score but have an income that can support payments easily. This occurs if you are a new-to-credit applicant or have very little prior experience with credit. So, if you have a low CIBIL score, be sure to disclose your income and any additional streams of income you may have. Proving that you have sufficient cash flow to cover payments comfortably is key and can help you get approval with ease.
Assess your credit report and rectify errors
When doing a CIBIL score check, free services like the one offered by Bajaj Finserv allow you to check your CIBIL report as well. This is when you should go through your profile and check if there are any errors. For instance, closed credit accounts that aren’t listed as closed accounts can be a huge problem and cause your score to dip. Fixing such issues right away will increase your score and may even help you get approval for a loan. Besides such errors, you should check if there are enquiries on your profile that you do not recognise. These could suggest fraud and that your information is being misused. Report such issues and ensure that all open accounts are verified and owned by you.
Armed with these pointers, you now have the necessary information to acquire a personal loan with a low CIBIL score. Also, do not wait too long before doing a CIBIL score check. Free services are available and you should use these to frequently check your report and ensure that everything is in order. For instance, you can check CIBIL score by PAN Card on the Bajaj Finserv website and the process is completely free. What’s more, it takes just 2 minutes and you get a clear idea of your credit profile as you can access a customised credit health report.Doing so ensures that you stay informed of changes to your credit profile and that you can address issues as they crop up. Remember, even though it can be a hurdle to get a loan when you have a low score, there are ways to work around it. To ensure that you have the best experience, pick the right lender and you can enjoy easy approval without any hassles.