Personal Loan with low credit score
Lenders approve personal after evaluating the applicant’s credit score. The Credit score is an indicator of a person’s creditworthiness. The score summarizes your credit history, such as the amount of loan you’ve taken, how you’ve repaid it, and other parameters. The lender will evaluate the risk associated in sanctioning the loan based on the score. Though lenders expect a good credit score of 750+ to approve a loan, it does not mean that there is no way for people with low credit score to get a loan. There are many NBFCs that offer loan to people with low credit score. Here are some of the measures to get a personal loan with a low credit score.
Ways to Get Personal Loan with Low Credit Score
.Prove to Lender that your salary supports EMI
One of the main factors that lenders look for before sanctioning a personal loan to an applicant is his/her repaying ability. If your credit score is low, then you will have to convince the lender that you’ve got means to repay. Whether it is an increase in your salary or getting an additional source of income, you can negotiate with the lender to get a loan. However, the interest rates for such loans may be high. Better, be prepared for it.
Apply with a Co-applicant
During instances where your loan application gets rejected, you can try applying again with a co-applicant and a guarantor. The catch here is that they must have a good credit score. They would have to complete the Personal Loan documentations such as KYC formalities and provide signatures
Approach NBFCs
Most banks expect a credit score of 750+ in order to sanction a loan. For low credit score applicants, contacting a NBFC is a good option. There are numerous NBFCs like Bajaj Finserv, Finnable, and Hero Fincorp offering personal loan to people. You can use a net neutral loan aggregator site like Fincover to get loan quotes for your website. Doing so, will help you pick the best loan deal suited to your credit score
Ask for a Lower personal amount
Banks reject loan applications from customers with low credit score because of the credit risk associated with it. From a lender’s point of view, giving a loan to you is a risk as you may default on EMIs. In that case, you can negotiate with the lender for a lower loan amount. The lender may approve such loan requests as the repayment for it would be easier
Correct the mistakes in CIBIL report
At times, your CIBIL report may contain errors. It occurs when latest credit/settlement information is not updated on their records. Your credit score might have taken a hit because of this issue. In such cases, you must contact the CIBIL agency to rectify the errors so that your loan prospective improves. Please remember though there are options to avail a personal loan with low credit score, it is important to take efforts to improve your credit score as it makes you a better candidate for loan or credit cards.
These are some of the ways through which you can get a personal loan with low credit score. Please note that sanctioning a loan is entirely a bank/NBFC’s discretion.