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 of an instant personal loan. Read on to know how to avail of 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 wherein 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, there are higher chances of your loan being sanctioned despite a not-so-good credit score. However, the amount might be lower and would be availed of at a relatively higher interest rate. To perform a free CIBIL check, visit the Bajaj Finserv website and enter your basic details.
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 collateral for this loan on a poor credit score might prompt your lender to re-think their lending decision. It might also lead to sanctioning your loan.
A collateral is a backup for your lender to recover the dues in case of a default. However, before offering collateral, ensure that your lender has such a provision.
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, lenders consider the credit score of both 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 of 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 standard norms are:
- The guarantor must be above 18 years of age
- The guarantor should have a good repayment history
- The guarantor must be of sound mind and understand their responsibilities before signing the agreement
- The guarantor shouldn’t have been forced or tricked into 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 between your employer and the lending institutions. Such collaborations might help in availing of a personal loan.
With pre-approved offers from Bajaj Finserv, availing of a personal loan and other loans such as business loans, home loans, etc., is a hassle-free affair. Check your pre-approved offer today.
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