CIBIL score is very important when it comes to availing of personal loans. This score gives an idea about the applicant’s credit history. So, if you have a low CIBIL score then it might be very difficult for you to get a loan. The financial institution does not have the confidence that a person with poor credit history can repay loans.
So, does that mean that CIBIL defaulters can never get a loan? Well, not exactly as there are certain ways by which a CIBIL defaulter can apply for a loan.
Explore the different ways by which CIBIL defaulters can apply for a loan:
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Search for a co-applicant:
You can lookout for a co-signer who has a good credit score. Apply for the loan along with this co-applicant. When there is a guarantor then the financial institution has better confidence that there is less risk of default. But make sure that the loan is repaid on time. Because if you fail to repay this loan in time then it has a negative impact on the credit score of the co-applicant.
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You may try for a secured loan:
In the case of secured loans, the applicant has to give collateral. If the borrower fails to repay the secured loan, then the lender can sell the collateral and recover the money. So, if you are a CIBIL defaulter and are in dire need of money then try for a secured loan. Since there is less risk for the financial institution in this type of loan the chances of loan approval are better.
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Go for loans with higher interest rates:
There are financial institutions that agree to give loans to CIBIL defaulters at a high-interest rate. This interest rate can be in the range of 25% to 30%. So, if you are willing to pay such high interest then you may explore this option of getting the loan at a high-interest rate.
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Having a good income can be a plus point:
You may be a CIBIL defaulter but if you are having a hefty monthly income then also you have better chances of getting a loan. So, if you are having a healthy monthly income then also you can try to apply for a loan. Because having a good income shows that you can pay the EMI’s with ease.
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Try other options of getting a loan:
If you feel that no financial institution is sanctioning your loan application as you are a CIBIL defaulter then you can check other avenues. For example, you can check for the option of withdrawing a part of your provident fund. CIBIL defaulters can also explore the option of peer-to-peer lending. In peer-to-peer lending, the transaction happens directly between the lender and borrower, and no middlemen are involved in this transaction.
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Always better to try and improve your credit score and have high CIBIL score:
If you do not want to go through all these hassles then the best thing to do is try and improve your credit score. Once you have a healthy credit score then you can easily get a loan.
Valuable tips to improve your CIBIL score:
There are many ways by which you can try and improve your credit score.
- Make it a habit that you pay your full dues within the stipulated time. If you have the habit of simply paying the minimum due amount of the credit card bill then you are heading towards trouble in the long run.
- If possible, try to use only 30% to 50 % of the credit limit of your credit card. Ideally, avoid using the complete balance of your credit card.
- Try to go for a combination of different types of loans so that your loan portfolio looks good. You must opt for a combination of different types of secured loans and unsecured loans to have a good loan portfolio.
- If you have signed as a guarantor in any loan application then make sure that the applicant repays the loan in time. In case this person defaults on the payment then it reflects badly on your credit score. Become a guarantor only if you are confident that the applicant is capable of repaying the loan in time.
- Make it a habit to review your credit history regularly and also make sure that you check your credit score regularly. In case you find there is a problem then take measures to rectify the same immediately.
- If you are a CIBIL defaulter then try to pay the EMI’s in time as this helps to build a better credit score in the future.
- One more way CIBIL defaulters can improve CIBIL scores is by requesting the financial institution for personal loan default settlement. For this, the CIBIL defaulter has to fulfill certain conditions.
CIBIL defaulters can now approach online lender Money View:
If you are in urgent need of money but are not getting a loan from a bank as you are a CIBIL defaulter then you have one more option. You can approach the online financial institution Money View which takes into consideration the loan applications of CIBIL defaulters.
Money View gauges the creditworthiness of the applicant by using their in-house credit rating model. So, if you have a low credit score of even 600 even then you have a fair chance of getting a loan from Money View. This leading financial institution has flexible norms and loan disbursal is possible with minimal documentation.
Conclusion:
Your creditworthiness plays a pivotal role in loan approval. However, that does not mean that CIBIL defaulters cannot get a loan. There are different avenues that they can explore like applying with a co-applicant or going for a secured loan etc. One of the best things that CIBIL defaulters can do is try and improve their credit score at the earliest.
If you have a credit score that is as low as 600 then approach the online money lender Money View. This financial institution has its in-house methods of checking the creditworthiness of the applicants.
