The Credit Information Bureau India Limited (CIBIL) generates CIBIL score for individuals on the basis of their credit history and all other factors. People having credit scores of more than 750 will get approval easily. But it is too much difficult for an individual to get a loan with a bad (or less than 600) credit score.
To check where you exist now, see the below table of various ranges of CIBIL scores.
CIBIL SCORE REMARKS CHANCES FOR APPROVAL
More than 750 Excellent Fast approval with competitive interest rates.
700-750 Good Fast approval but competitive interest rates are available.
600-700 Satisfactory Collateral loan with high-interest rates.
Less than 600 Bad Bad for all kinds of loans.
Steps to avail loan for poor cibil score
It is one of the biggest challenges to getting your loan approved with a poor cibil score. But you can deal with bad credit loans to follow these steps.
1. Steady income/job- Show your last 6 month’s bank statements to the lenders which represent your income stability whether you are in any profession, self-employment, and job. Let them know about your all sources from where your income is generated.
2. Pay tax on time- Show the lenders your previous year’s details with proof that you are a regular taxpayer. It would be helpful for lenders to trust you with a low cibil score also.
3. Opt for online lenders- If you are looking for loans urgently with a low cibil or loan without cibil score, Apply for online lenders who are providing loans with moderate interest rates with less proof.
4. Apply with Banks and NBFCs- Many NBFCs and banks also provide loans with low or without a credit score, but they may charge higher interest rates as compared to people with high cibil scores.
5. Add a co-guarantor- You must apply with a co-guarantor who has good performance in credit history and has an excellent cibil score. It improves your weightage for getting credit instantly.
6. Doing research before applying for a loan- Various lenders are available in the market before approaching anyone quickly, you have to do proper research you should find the best institution.
7. Ensures your documents- Generally, applying for unsecured loans needs less documentation but if you are applying for bad credit loans, keep all documents with you like: address proof, strong income proof, salary slips, etc.
8. Minimize loan amount- First you should calculate your need and try to reduce your loan amount. Lenders don’t need to put too much effort into processing your loan application. Don’t take loans to their full extent.
9. Use old credit cards for payments- Don’t block your old credit card, always use old accounts for any transaction, it will helpful for you to increase your credit score.
Conclusion- Starting from a low credit score to a high credit score is a journey of your credit behaviour. You can also get bad credit loans from any reputed institutions and repayment of loans on time will increase your credit score. Mentioned above are the ideas to avail loan for poor cibil score.
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