Search for:

Struggling with low cibil Score ? Loans for low cibil score

loans for low cibil score
Loans for low cibil score

loans for low credit score

Cibil score is a very important metric for approval of all kinds of loans in India. Low cibil score is big issue and low credit score is a hinderance in approval of any kind of loan.

When we talk about loans.

There are three types of Loans.

1. Secured Loans

Mortgage loans, loan against property, Housing loans and auto loans come under the category of secured loans as they are backed by some type of physical assets. Basically, a secured loan need borrowers to offer collateral, while an unsecured loan does not. This difference affects your interest rate, borrowing limit, and repayment terms.

2. Unsecured Loans

Personal loans, business loans and credit cards come under unsecured loans as there is no asset that is given as security.Secured loans are not just for new purchases. We call Secured loans as home equity loans/home equity lines of credit. These are based on the current value of your home loans or home equity home minus the amount still owed. Such loans use your home as collateral.

3. Consumer Loans

Now lets us talk about a hybrid kind of loans, which are a mix of both the categories i.e. Gold loans, loan against securities and credit cards against Fixed deposits. Overdraft facility is also a mix of loans, as this is only a temporary liability. Banks approve these loans even in case of low credit score.

Can you challenge a default due to cheque bounce?

You can very well challenge the default case arising due to cheque bounce or any unwanted credit crunch arises because of situations created by natural events/disasters. You should consult Single debt for legal help on these type of issues.

Good cibil Score is Important for a Personal Loan

A personal loan is an unsecured loan that does not require the customer to pledge any kind of collateral. Banks/Financial institutions sanction loan after scrutinizing the CIBIL score of the customer. This is where the credit history of the borrower plays its part. TransUnion CIBIL Ltd also referred to as the Credit Bureau of India is an RBI licensed company that maintains records of loans and credit cards.

A CIBIL credit score for a loan is a 3-digit number ranging from 300 to 900 that speaks for the credit history of the customer. The higher your CIBIL score, the better are your chances of loan approval. Also, the sanctioned loan amount depends on how good your CIBIL score is. Read more to know about the ways to get a personal loan for a low CIBIL score.

Minimum credit Score for approval of a Personal Loan

CIBIL score required for a personal loan is usually 750 or above. The credit score for a personal loan plays a vital role in determining your eligibility. It also helps lenders in assessing the permissible limit of the amount which they can sanction as your loan (apart from other eligibility criteria). However, achieving an ideal credit score is not a big deal, but still you should follow certain rules to keep your credit history neat and clean.

Read How to improve your credit score

Loan for low credit Score

For those who do not have an eligible CIBIL score, there are certain things that can be done in order to get loan approval and/or improve creditworthiness.

  • Regular Income earning job/business: If you have a good, regular income, then there are chances of getting a loan approval. However, please note, your loan approval depends on a multitude of factors, including type of job, employed, income and credit score.
  • Paying Taxes: Regular payment of taxes gives a good impression of the applicant’s profile.
  • Bank Balance and good investment portfolio: A good bank balance reflects one’s capability to repay the loan which certainly increases the chances of getting a loan. If you have enough Mutual Funds and Stocks in your investment portfolio, you can easily take loans against securities.
  • Guarantor / Co-applicant: You can ask a family member with a good CIBIL score to be the guarantor or co-applicant for your loan.
  • Repay Your Debts on Time: Repayment of all your EMIs on due dates and credit card bills can help you build towards a good CIBIL score. It is better to pay all your EMIs through ECS mode, so that you will pay your EMIs on time.
  • Reduce the Loan Amount: You should always take a loan lesser than the approved limit. For example, your annual salary is 10 lakhs and according to that you can get a personal loan up to 2-3 lakh. So you should avail personal loan lesser than your lower limit, that is 2 lakh. This will improve your credit score in the coming future.

Boost your Credit score with a deposit/collateral based loan

This is a quite tricky idea to improve your credit score immediately. As you are already struggling with a low credit score, So you will not get any secured or partial secured loans. Then what to do?

In this situation, try this.

You should take a credit card against fixed deposit (small limit) in a nationalized bank. By this way, you can easily get a credit card.

Now you should keep following two things in mind.

  • You should use the 20% – 30% limit of this credit card for next three months.
  • Keep using this card in low utilisation mode for these three months.
  • Pay your full credit card bill in time.

This is a rapid way to boost your credit score in one month.

Still there are various online loan providing websites which are providing loans to the individuals having low credit score

If still you are not getting a loan, then get a customised loan with comfortable interest rates. Don’t forget to mention your current credit score

Open your demat account with Samco Securities.

Open your demat account with Upstox

How to improve cibil score

How to improve credit score

In, we carry away most of the jobs through mobile applications and so are the loans. Therefore, We should have a good credit score to avail fast loans.

A credit score of 750 and above is considered as ideal score for approval of any type of Loan

What is CIBIL? What does it mean to a common person?

Let us start with the full form of CIBIL. It stands for CREDIT INFORMATION BUREAU OF INDIA LIMITED. A credit bureau get a licence from RBI and comes under the Credit Information Companies (Regulation) Act 2005. CIBIL score is a 3 digit numeric summary of your credit history which comprises your loans and enquiries. This score ranges from 300 to 900. If your score is higher than there are maximum chance, you can get approval for your loan. Lenders consider a credit score above 750 as an ideal mark for approval of a loan.

CIBIL score plays a vital role in the loan application process. As soon as an applicant fills loan application with supporting documents, It is the duty of the lender to check the creditworthiness of the applicant. CIBIL scoring is the only means of checking the credit history of the borrower. CIBIL score shows the loan repayment history of the borrower which gives a clear picture of the borrower that how he has repaid his old loans and his credit behaviours.

How to check CIBIL scores?

There are various online platforms to check your CIBIL score. I have divided them in following two categories.

Banks and credit rating agencies: You can check your CIBIL with your bank if you use net banking facilities. Other direct options are also available to check your credit score with TransUnion CIBIL, EQUIFAX, CRISIL and CRIF. They charge some fee for generating a credit information report (CIR) which comprises all the details regarding loans and repayments.

www.cibil.com

www.equifax.com

Private partners and loan providers : There are various loan providers and online lenders like Indialends, Paisabazaar, PolicyBazaar myloancare, PAYTM and creditmantri (They provide CIBIL score free of cost). These are lenders who can provide you CIBIL score based on your credit history they don’t ask for any charges to provide a credit information report. FREE CREDIT REPORTIf you have availed loan you can get a detailed Credit report (CIR) on PAYTM as well. Websites of these lenders are:

www.paisabazzar.com

www.creditmantri.com

www.myloancare.in

Credit information report (CIR)?

You might have seen or heard that few people don’t have any credit score or sometimes some wrong loan entries are there in your CIR. Where does this data come from?

It bound all the lenders and banks to share their lenders information to central agency CIBIL collectively on a monthly basis. Loan enquiries are also being shared to CIBIL in the same way. This is how the data is being compiled with CIBIL. CIBIL captures data based on contact details. Sometimes there is a slight error of digits in contact number or email address due to which the loan details get uploaded in someone else’s report. You can rectify such errors can by communicating the same with CIBIL by the individuals.

What factors affect CIBIL score

Before talking about the factors affecting CIBIL Score, let us talk about a person who has no credit history, means ‘0’ Zero credit score. How to solve this issue. If you also have such issues, then no need to worry. It means you have availed none loan. So there are multiple factors which affect your CIBIL scores.Factors affecting your credit score

how to improve your credit score

Credit Utilization

An increase in current balance of your credit card indicates an increased repayment burden and this may affect your credit score negatively.

Payment History

For getting a good credit score you should pay all your EMIs and or credit card bills on time. Full payment of credit card outstanding creates positive scoring in your report.

Multiple credit Enquiries

If you have recently made multiple queries for personal loans, auto loans or other kinds of loans and you have been rejected by lenders then you should wait for a few months. If you raise multiple loan enquiries, then Banks/lenders consider you as credit hungry individual. Avoid credit hungriness.

Ideal credit score for taking loan

Basically loans are of two types, secured loans and unsecured loans.

Housing loan auto loans and mortgage loans come under secured loans as we hypothecate them with some physical assets. Therefore secured loans can be granted with ‘0’ credit score or no credit history. Sometimes there are some EMI/loan defaults with genuine reasons, so the lender can avoid these and clear the loan application of the borrower in case of a low credit score. It means secured loans get approval on credit score lower than 700 as well.

Personal loans and Credit cards are unsecured loans, for sanctioning then lenders need a good credit score of the borrower. Ideal CIBIL score for personal loans and credit cards is 800+. Some banks or lenders can lend on 750 also, you need to check with the bank as per the loan amount and case to case basis.

Low credit score? Need a personal loan?

How can you improve your CIBIL score?

You can improve your credit score by paying all your dues in time. A good credit history is very important for approval of any kind of loans. Follow these simple steps to get an ideal cibil score.

  • Always pay your EMIs on time

  • If you have a credit card, use its credit limit as minimum as possible

  • Maintain a healthy mix of credit between secured (home loans & Auto loans) and unsecured (Personal loans & credit cards).

  • Monitor your co-signed, guaranteed and joint account on a monthly basis. If you are a guarantor of some borrower, then It means that you are also a part of that loan.

  • Never make too many frequent credit enquiries.

  • Review your credit history frequently to avoid some wrong entries in your report.   

A review video of credit report generated from Paisabazaar portal.

No need to panic if you see you credit score like this

How can you remove your wrong entries reported in your CIBIL

It is very important to have a periodic review in your CIBIL report to report any wrong entries. If you have any wrong entries or some defaults which have been resulted because of genuine reasons (hospitalisation, relocation, loss of job or lockdown situations) then you can write to CIBIL about the same and as them to remove such default/ wrong entries.

You can report wrong entries in your CIR to CIBIL Consumer Dispute Resolution:

https://www.cibil.com/consumer-dispute-resolution

As soon as you report these wrong entries to cibil, they confirm this with lenders and update the records accordingly.

It is important to note, that CIBIL can not delete or change these entries on his own? No.

You need to communicate the same with the lender (Banks or other Financial institutions) as well. Because lenders are the one who send these data to the CIBIL agencies.

We are here to help you

know how to improve your credit score

There is a very simple process to make these corrections in your cibil report. You can either start these corrections on your behalf or contact us at paisekikahani@gmail.com.

We will guide you in improving your credit score. We will be more than happy to answer your queries. You can contact us by submitting your details in Contact Page.

Read our best cibil score for loan
cibil score based loan
cibil score range for personal loan
minimum cibil score for loan