Are you running on a tight budget? Need some credit to take a little financial load off your shoulders? A Personal Loan can provide you with immediate funds that will help you meet your personal or business related expenditures. With Poonawalla Fincorp, you can get a Personal Loan with low-interest rates starting from 10.99% onwards and minimal processing fee.
CIBIL Score – A Vital Factor in Personal Loan Approval
There are eligibility requirements you need to fulfil for a uno reverse card Personal Loan. Among these, an excellent credit score is one of them. A CIBIL score for Personal Loans lies between 300 (lowest) – 900 (highest). For a Personal Loan you need a 750+ score. But if you have a lower score than this, there are ways to get approved with a low CIBIL Score for Personal Loan.
1. Is Your CIBIL Really Low?
Sometimes, your CIBIL report may not be up to date or record inaccurate figures, which can be harmful to your credit score. Therefore, it is suggested to check your CIBIL score regularly and get any errors rectified. Generally, there are clerical mistakes in their credit reports. Maybe there are clerical errors, wrongly spelt name, wrong address, etc.
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There can be a loan account that you closed earlier, but it is open in records. A flawed credit report shows the loan applicant is riskier than they really are. Therefore, you should request the credit bureau as soon as possible to rectify the error, if any. Once that happens, the correct CIBIL score will be displayed.
A co-applicant with a good CIBIL can increase the chances of loan approval with a low credit score. In a Personal Loan, a co-signer acts as a guarantor. So, he/she will repay the loan if you can’t. Adding a co-signer can boost your loan application and get it approved even if you have a low CIBIL Score.
3. Apply for a Lower Loan Amount
A Personal Loan sanction could be difficult to approve for an applicant with a lower credit score. So, to get the loan application approved, consider a smaller loan amount. What this will do is reduce the risk for lenders in comparison to a higher loan amount.
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So, evaluate your financial status before you apply for a Personal Loan and determine how much of the loan you can afford to repay. Try to apply for a loan you can pay back without excess financial burden. Because even one missed or delayed EMI can hurt your credit score, and this will result in a poor credit record.
4. Explain NA or NH in your Credit Report
In a credit report, you will see an NA or NH. This means you have no credit score or an inactive credit period. This will happen if there is no activity for three years or more. So, explain this to the lending institution. The lender may accept this reason and accept a low CIBIL score for Personal Loan. However, this might result in a higher interest rate. So, apply if the loan meets your requirements. Otherwise, there will be no benefit in getting a Personal Loan with a high-interest rate.
5. Steady Income & Additional Sources
Your income proof is evidence of stable income from a job or business. But if you show an additional source of income or steady cash flow from your business, there is a possibility of approval with a low CIBIL score. So, if you have some additional source of income or high steady income, the low CIBIL factor won’t come in the way of your loan approval.
6. Accept New Credit Cards
Do you get a credit card offered with an increased credit limit? If yes, do accept it. Because this can improve your credit score. This will show that your bank trusts your credit history. Also, this doesn’t mean you should close old or unused credit card accounts. Your credit history gets recorded if there is a longer period of credit availed: which will impress a lender and you can get a Personal Loan approved.
Also, you should limit your credit utilisation ratio. Try to keep it below 30%. Because most of the time this gets neglected, and the credit score decreases. If you follow these simple tips: you can help yourself, get a Personal Loan even with a low CIBIL score.