When you place an application for a personal loan, financial institutions often look at various variables to consider your loan eligibility.
Your credit score is one of the necessary factors in this equation. The oldest credit bureaus in our country, like CIBIL, act as a source to fetch instant credit reports from financial institutions.
Your credit score, also known as the CIBIL score, often predicts your potential to make timely repayments on a personal loan. A credit score of 750 and above is generally favored by lenders and is more probably to be accepted for a personal loan with a CIBIL score.
Most huge financial institutions, on the contrary, may certainly turn down your personal loan with zero credit score or if your score is low or bad. Even while a low score considerably lowers your chances of availing of a personal loan without a credit score, there’s still a good chance that you can get one through NBFCs like Fullerton personal loan, Bajaj Finserv, etc. However, for this, you must completely be aware of the crucial elements, which are –
CIBIL score and its significance
Your credibility is evaluated using your credit score or your CIBIL score. The RBI (Reserve Bank of India) has allowed the CIBIL (Credit Information Bureau India Ltd.) to compute your credit score.
You are considered credible if you have a credit score between 750 and 900. Your personal loan application holds better chances of approval if you have a higher score.
CIBIL score is dependent on how well you can repay your prevailing debts. Your credit score is based on your timely repayments on all your outstanding commitments, involving your loan EMIs, credit cards, etc.
On the contrary, if any of you fail to make the personal loan repayment on time, your credit rating may be reduced. There’s a higher probability that someone with low credit history might be denied a personal loan than someone having a clean credit history.
Borrow a smaller loan and proceed
Owing to your credibility, lenders are less likely to lend you funds if your credit score is not high enough. To put this in a simpler way, funding someone with a low credit score is riskier for bank lenders.
A reduced sanction can still make you eligible for a Commercial loan. If you hold a low credit score, you might still get lesser loans to proceeds from top lenders. Moreover, by borrowing the required or modest proceed, you have the choice to repay it periodically as per your repayment capacity and simultaneously increase your credit score even.
Avail a joint loan or with co-applicant
It is highly possible to get a personal loan, even with a low credit score, if you have a co-applicant willing to assure or guarantee your personal loan. As part of the personal loan approval procedure, the lender assesses your credit score ratings and profiles you as well as your co-applicant.
To enhance your probability of loan approval, applying with a co-applicant having a solid credit score and stable financial background is a must. Adding a co-applicant to your personal loan application reduces your repayment burden to a certain extent, as all the co-applicants here share the repayment burden. It is best to ask your pals and family to either serve as guarantors or co-apply if your credit score is not good enough.
Provide income authentication to facilitate timely loan repayments
To avail of a personal loan, the lender must thoroughly be convinced that you can fully repay the availed loan without creating any stress on your finances.
As this is an unsecured credit option, lenders factor in your personal loan with CIBIL authentication and financial documents to decide your repayment potential. However, in a few cases, it is very much possible to have a low credit score but an income adequate to cover your loan costs or other obligations.
New credit loan applicants or those with a little credit history at risk are the ones who may fall in this category. Ensure to identify any income sources you might have if you have a low credit score.
When applying for a personal loan, ensure to opt for the NBFCs like Fullerton personal loan as such financial institutions. At the same time, consider your credit score, and give higher preference to your income, which may make you eligible for a personal loan from them.
Also, checking your Fullerton India loan status is easy by visiting the lender’s online website and inputting your loan details.
Ensure there are zero errors on your credit profile and report
Free services permit you to assess your credit report while performing a CIBIL score check. In case you find any problems, this is the time to go through your credit profile and rectify it. It’s possible to get a low CIBIL score because of unclosed loans or credit accounts that are not identified as closed.
Taking thorough care of such problems will assist you in ameliorating your credit score and getting a personal loan with ease. Additionally, you must authenticate your profile to view if there are any sort of unidentified inquiries.
If you view any of the unidentified inquiries, it can be an indication of misuse or fraud of your personal info. Make sure all your open accounts are confirmed and owned just by you before you report any of the issues.
Personal loan financing with a low credit score can now simply be obtained with the assistance of various advice and tips. Ensure to check your credit score continuously.
To ensure everything is in the right order, you must use free services to review your report periodically. It is possible to authenticate your credit score through your PAN card. You might receive a personalized credit health report in just 2 minutes, endowing you with a perfect picture of your financial situation.
By doing so, you will be able to keep close tabs on any changes to your credit profile and take instant action at the earliest. There are ways to simply secure a loan even if you hold a low score, so keep this in your mind. It is crucial to select the right lenders so that you can witness a hassle-free loan application procedure.