How To Secure A Personal Loan With Low CIBIL Score: Know The Guidelines

If you have a low CIBIL score, while you need to adopt a healthy mentality towards money, this doesn’t mean you can’t avail of a personal loan to help with your financial goals and needs.

One of the ways to secure a personal loan with a low credit score is to apply for a joint loan with a co-applicant, who should have a high CIBIL score to make the loan application strong.

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It can be difficult to secure a personal loan with a CIBIL score below 550. While it is advisable to maintain a good credit score, things aren’t always ideal. However, this doesn’t mean we can’t work to improve our situation. If you have a low CIBIL score, while you need to adopt a healthy mentality towards money, this doesn’t mean you can’t avail of a personal loan to help with your financial goals and needs.

But first, let’s talk a little bit about what exactly is a CIBIL score and what it means for our loan applications. CIBIL (Credit Information Bureau India Limited) score is a numeric representation of how credit-worthy an individual is. This score is a three-digit number, ranging from 300 to 900. A score above 750 is generally considered good, while a score between 550 to 700 is considered average, and a score below 550 is considered poor. A healthy CIBIL score represents a borrower’s creditworthiness and a credit report is a marksheet displaying an individual’s credit history.

So let’s discuss ways to secure a personal loan with a low CIBIL score.

Increment Or Other Income

If you have received an increment in your salary or have secured an additional source of income, it could help convince the bank to consider your application for a personal loan. Even if you can communicate to the lender that you have a steady job and income, the lender is more likely to approve your loan, although you might have to bear higher interest rates in such a case.

Lower Amount Loan

If you have a poor credit score, try to seek a personal loan for a lower amount to reduce the chances of getting your application rejected. A lower loan amount would allow the lender to consider your application without doubting your repayment capability.

Secure A Guarantor

Apply with a guarantor to ensure the bank that the loan will be repaid irrespective of your financial health. You have to keep in mind that the guarantor should have a healthy credit score to help encourage the lender to take a chance with you. Also, now that you have a guarantor onboard, maintaining their good credit score also lies with you as any delays or faults in your loan repayment process will directly impact them. So be careful and ensure that you make all your repayments on time. 

Verify Credit Reports

Thoroughly examine your credit reports to ensure they are error-free and give an accurate representation of your credit history. It is possible that a small documenting error in these reports could be wrongly affecting your credit score. 

Joint Loan

Apply for a personal loan with a co-applicant. You can apply for a personal loan with your parents, spouse, or siblings. The only thing to keep in mind is to ensure that the co-applicant should have a high CIBIL score to make your loan application strong.