Lenders measure your ability to repay a loan by checking your credit score. This score summarises your credit history, the amount of credit you have taken, how you have repaid it, and other factors. All this helps a lender determine if granting you a personal loan is a risky proposition or not, since a personal loan is an unsecured loan and the lender has no other assets to fall back on.
While you may have heard that you cannot get a personal loan with bad CIBIL score, this isn’t entirely true. Here are the measures that you should implement to get a personal loan despite a poor CIBIL score
Prove that your income can support EMI payments
If you have received an increase in your salary, or have an additional source of income, a lender may consider your application for a personal loan even if you have a low credit score. If you can communicate to the lender that you have a stable job and steady income, they are more likely to grant you the loan despite a poor CIBIL score. However, you may have to pay higher rate of interest when you prove your eligibility in this manner.
Additional Read : What is Annual Percentage Rate (APR): Understanding How APR Is Calculated
Ask for a lower personal loan amount
Asking for a high amount with a low credit score only indicates more risk to the lender. From a lender’s point of view, these are indicators that you may default on repayment. If you apply for a lower amount of a personal loan, a lender may feel more comfortable granting the loan to you, as a lower amount is easier to repay.
Additional Read: Personal Loan Up To Rs.25 Lakh - Only With Bajaj Finserv
Apply with a co-applicant or secure a guarantor
In case your CIBIL credit score is low, you can avail a personal loan by involving a co-applicant or a guarantor. Of course, you will need to ask the other applicant beforehand, as they will have to complete KYC formalities and provide signatures too. The key benefit here is that if your lender finds the co-applicant or guarantor to have a steady income and a better credit score, they are certainly more likely to grant you a personal loan.
Correct mistakes in your credit report
It is possible that your CIBIL report contains errors. This is usually when the latest information hasn’t been updated against your record. Mistakes like these can take a toll on your credit score for no fault of yours. So, it is important to check your CIBIL report for free on a regular basis and correct them If any. This will boost your credit score and make you a better candidate for the loan.
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Request your lender to consider your case with a NA or NH in your credit report
The NA or NH on your credit report marks absence of any previous credit activity or absence of credit in the last 36 months. In such a case, you may not have a credit score in your CIBIL report. So, you can try and speak to your lender regarding your credit inactivity. It is likely that the lender will offer you this loan at a slightly high rate of interest.
These measures will help you avail a personal loan despite a poor CIBIL score. However, make sure that you have sufficient funds for repayment. If not, your credit score will plummet further. For this, you can use Personal Loan EMI Calculator to know your EMI well in advance and plan your repayment accordingly. As a last resort, you can check to see if you can pledge assets such as jewellery or property to get a personal loan.
Additional Read: How to Get Instant Personal Loan
Applying for a personal loan from Bajaj Finserv is easy, with exclusive pre-approved offers that are tailored to your unique repayment capacity. You can check your personal loan pre-approved offer by simply adding some basic details, and avail a personal loan in just 24 hours.
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