The credit score plays an essential role in the approval or else rejection of loans. The loans can be availed with a poor credit score at higher interest rates which some lenders may or may not approve. The CRISIL is the rating agency that maintains the CIBIL records of the company based on which the bank decides the loan’s approval or rejection. The categorization of the score is that more than 800 points are considered as excellent score, in the range of 600-800 is considered a good score, range of 300-600 as average, and less than 300 points are considered as poor score. The CIBIL score gets reduced even if the applicant has paid the previous delayed installment or else delayed credit card bill; then the CIBIL score may get reduced. The bank may not also negotiate the interest rates charged by the bank if the score is found to be below. The loan applicant can himself check the CIBIL score of an individual on the internet by putting the Pan card & Aadhar card details on the finance websites to check their CIBIL score. Banks are always in search of customers for the disbursement of loans, but the honest person in case of credit repayment is a major important criterion.
Personal loan is important to be availed by most of the people amongst the salaried class with modest income. Thus that maintaining a good CIBIL score is very important. The loans availed can satisfy various needs of the borrower. Having proper documents related to identity proof and salary proof, employment proof is also another necessary part of the approval of the loans. Banks clear the instant loans being applied through the internet on an instant basis if applied through the online process. Banks may consider slightly lower score like 600-700 points as the minimum requirement of the score is 700 & above. After checking the credit score is low, the borrower should try to improve the score by repaying the existing debts on time or else by repaying the credit card bills on time. The banks also expect that the borrower should have a stable income and also should maintain a good credit score in case of the loans being applied as it shows that the borrower is financially stable. The loan is rejected by one of the banks; the borrower should go to another lender to approve loans as different lenders may have different policies regarding the disbursement of loans.
Following are the ways to secure personal loans even in case of poor credit score:
- Take a joint loan with a family member:
If there is more than one person in the family who is earning, the borrower can jointly avail personal loans together as the other borrower if having a good CIBIL score and also income proof approval of the loans becomes easy for the borrower. Thus taking a joint loan is better.
- Get a guarantor for the loans:
In case of a medical emergency or other urgent need for money, the borrower may keep family members, friends, or relatives as guarantors for the loans. Keeping a guarantor who is financially stable may help get loans easily.
- Apply to another lender if the loan is rejected by one of the lenders:
The borrower may apply to another lender for the loans as different lenders have different policies regarding the disbursement of loans. And though if the loan is rejected by one of the lenders, another lender may approve it, making it a win-win situation for the borrower in the case of personal loans.
- Try improving CIBIL score:
If the borrower’s credit score is found to be low, then, in that case, the borrower should try improving the score by paying the existing debt or else credit card bills on time & wait for the credit score to get updated, then apply for the loans.
- Avail loans at higher interest rates:
Some borrowers may approve the loans even in case of a low CIBIL score at a lower interest rate which can at least solve the purpose of getting loans to the borrower. And thus, at higher interest rates, loans can be approved.
Conclusion:
Thus we can conclude that even in case of a poor CIBIL score, the borrower may get the loans approved by using some tricks & strategies through providing a guarantor or else through a joint loan with family members.ETC. Also, the borrower can find some loopholes like availing loans at higher interest rates when certain banks reject the loans. The personal loan is easy to get approved as the amount involved in the loans is low.
