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How to Get a Personal Loan with a Poor Credit Score

  • Highlights

  • Search for alternate class of lenders

  • Opt for a joint loan with your spouse or relative

  • Find a suitable guarantor

  • Pledge collateral for procuring loan

Your credit score is one of the main determiners of whether you will be sanctioned a personal loan or not. It reflects your creditworthiness, prudence with serving past loans and instils a sense of confidence in your prospective lender regarding loan repayment.

Check your cibil score for free

Often, personal loan applications are rejected because of the applicant’s not-so-healthy credit score. However, note that despite a poor score, you can still avail an Instant Personal Loan. Read on to know how to avail this loan even with a low score.

1. Look for alternate lenders

Traditionally, banks have been the go-to institutions for personal loans. Banks have strict lending norms whereby a lot of emphasis is on the credit score. A poor score is enough to throw the borrowing exercise off track. However, today, there is an alternate class of lender(s) such as non-banking financial companies (NBFCs) that have somewhat relaxed lending norms compared to banks.

Though NBFCs also keep a close tab on your credit score while sanctioning the loan, yet there are chances of your loan being sanctioned with a not-so-good credit score. However, the amount might be lower, with a relatively higher rate of interest. To perform a free CIBIL check. Simply visit the Bajaj Finserv website and enter your basic details to check CIBIL score for free.

2. Check if there’s a provision for a collateral

Note that personal loans are an unsecured mode of finance. This means you don’t have to pledge any collateral for availing them. Offering a collateral for this loan on a poor credit score might prompt your lender to re-think. It might also lead to sanctioning of your loan.
A collateral is a backup for your lender to fall back upon and recover the dues in case of a default. However, prior to offering a collateral make sure your lender has such a provision.

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3. Apply for a joint loan with your spouse or relative

If you don’t have a healthy credit score, you can apply for a joint personal loan with your spouse or a relative who has a better score. While sanctioning the loan, the lender considers the credit score of both the applicants.

Thus, a healthy score of your spouse or relative enhances your chances of procuring the loan.

4. Get a guarantor

This is another effective way of availing a personal loan with a poor credit score. In legal terms, a guarantor is liable to pay off the loan in case of a default and acts as the principal borrower. Choose a guarantor with a good credit score. Financial institutions may have their norms while accepting guarantors. Some of the common norms are:
- The guarantor must be above 18 years of age.
- He/she should have a good repayment history.
- The guarantor must be of sound mind and understand his/her responsibilities before signing the agreement.
- The guarantor shouldn’t have been forced or tricked in to signing the document

You can also apply for a personal loan on a poor credit score when you get an increment. An increment facilitates your repayment ability. You can also check if there’s a collaboration with your employer with lending institutions. Such collaborations might help in availing a personal loan.

With pre-approved offers from Bajaj Finserv, availing a personal loan and other loans such as business loan, home loan, etc., is a hassle-free affair. To check your pre-approved offer, share a few basic details.

The content of this document is meant merely for information purposes. The personal loan features mentioned in this article are subject to updation, completion, revision, verification and the same may change materially based on policy revisions. For more details, please visit our Personal Loan terms and conditions page here.

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