Instant Loans Without CIBIL: Essential factors to check before borrowing

One of the most difficult aspects of dealing with a financial emergency is the unpreparedness to meet an unplanned expenditure. If you do not have enough cash in hand or savings, you may face a crisis. In such a scenario, one of the options people commonly resort to is taking an instant loan.

Instant loans are conveniently available, don’t require too much documentation and give you fast access to the required funds. One of the main criteria checked by a lender while evaluating a loan application is the CIBIL score. A CIBIL score, or credit score, indicates how efficiently you manage your money. The CIBIL score ranges from 300 to 900.

Most banks and non-banking financial companies (NBFCs) prefer borrowers with high credit scores. But what happens when you don’t have a CIBIL score or a low score?

While the CIBIL score is an important consideration for a lender, nowadays several banks and fintech platforms provide loans without checking the CIBIL score as well.  However, before applying for any such loans, it’s important to know the key factors from interest rates to fees.

What Are Instant Loans Without CIBIL Score?

An instant loan without a CIBIL score refers to a loan that is sanctioned without requiring your credit score to evaluate the loan application. Such loans are typically offered by various lenders. These loans are meant for quick disbursal, often within hours, and cater to those with no credit history, low credit scores, or immediate cash needs.

While considering making a loan application, it is important to explore options and compare the terms and conditions for loans being offered by different lenders. You can download the Moneycontrol app on your smartphone to apply for loans of up to Rs 50 lakhs with interest rates starting from 10.5% per annum. The loan approval process is fast, and the amount could be credited into your account within a few minutes to a few hours.

Advantages of Instant Loans Without A CIBIL Score

Easy Accessibility 
Traditionally, you have to provide a credit report when you apply for a loan. Thus, if you have a low or non-existent CIBIL score, then your application can be rejected. In such a scenario, an instant loan without a CIBIL score can come to your rescue.

Fast Disbursal
When you apply for an instant loan without a CIBIL score, the whole loan approval process is much faster. This is especially helpful in times of emergencies.

Minimal Documentation
You would usually be required to submit your KYC (Know Your Customer) documents and bank statements to avail yourself of an instant loan without a CIBIL score. It helps you avoid the extensive paperwork required for a conventional loan.

Opportunity to Build CIBIL Score
By repaying such loans as per schedule, you can build your CIBIL score. This will boost opportunities for securing better loan conditions in the future.

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Disadvantages of Instant Loans Without A CIBIL Score

Higher Interest Rates
The tradeoff for not having to provide your CIBIL report is that the lender can charge a significantly higher interest rate compared to those charged by banks for loans that are sanctioned after checking the credit score. It is one of the pitfalls of applying for an instant loan without a CIBIL score.

Short Repayment Period
An instant loan without a CIBIL score usually comes with a much shorter repayment period compared to a traditional loan. Such a tight schedule can make it difficult to make the payments on time.

Risk of Debt Trap
Their easy accessibility, combined with high interest rates and short repayment periods, can potentially lead borrowers to a debt trap.

Potential for Malpractice
Apps that provide instant loans without a CIBIL score can sometimes have hidden charges and aggressive recovery methods. In some cases, they may also come with privacy issues.

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Conclusion

To conclude, you need to carefully weigh the pros and cons of opting for an instant loan without a CIBIL score. While you can get quick access to funds with such an option, it is important to note that they come with high interest rates and short repayment periods. It is important to explore all options before taking an instant loan without a CIBIL score.

You can access personal loans from eight lenders via the Moneycontrol app and website. The loan amount can go up to Rs 50 lakhs with interest rates starting from 10.5% per year. It is an easy method to compare options and pick loans that suit you the best. You can complete the loan application online without having to provide collateral.