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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.

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 a 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.

Flexi Loan Explained

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.

DISCLAIMER: The personal loan features mentioned in this article are subject to change, based on policy revisions. For the updated product details, please visit the Bajaj Finserv Personal Loan page here.

 

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