A personal loan is an unsecured loan. It means that a borrower does not need to put down any collateral or security to get loan approval like a home loan and more. If you have the required eligibility, you can get the loan quickly to fund many needs.
However, since an instant personal loan is an unsecured loan facility, lenders want to ensure that the borrower has enough repayment capacity to repay the loan EMIs. As a result, they check the creditworthiness of a borrower completely before approving the loan.
The creditworthiness of a borrower is determined by his/her CIBIL score, repayment capacity, employment record, and age. The CIBIL score is one of the most vital factors considered by lenders to approve the loan. Anyone with a CIBIL score of 700-750 has a bright chance of getting loan approval at a lower interest rate.
But, what if you have a CIBIL score reading less than the mark of 700 and you want to get loan approval? Will your loan application be approved in such a case? Read this post to know more about the personal loan for low CIBIL score!
Tips to get approval for personal loan for low CIBIL Score
- Prove your lender that you can repay the loan
In case if you have recently received an increase in your salary or have an additional source of income, a lender may consider your personal loan application. Yes, even if you have a lower CIBIL score and can support personal loan EMIs, you can get the loan approval. Lenders want to see if you have a stable income and when they are assured of it, then they may approve a loan despite a poor CIBIL Score. However, the flip side may be that you may have to deal with higher personal loan interest rates.
- Apply for lower loan amount
When you have a lower CIBIL score and you apply for a large amount, it raises the risk for the lender. It may assume that you may default on the loan repayment as you have not managed a decent repayment history (that’s why you may have a lower CIBIL Score). Hence, the best thing here would be applying for a lower personal loan amount to make the lender more comfortable in granting the loan as it’s easy to pay.
- Apply for loan with a co-borrower
If you have a lower CIBIL score and need the loan to fund many needs, then you can apply for it with a co-borrower. If you can find a co-borrower with a better CIBIL score and repayment capacity, then you may get the loan approval quickly.
- Correct mistakes in your credit report
Sometimes, if there are some discrepancies in your credit report, even then your CIBIL score may be lower than expected. As a result, it is good to get errors deleted or resolved and then apply for a personal loan.
Some of the easy ways to help you get a personal loan for low CIBIL score are discussed. If you wish to avail a personal loan for low CIBIL score, then you can implement or follow the discussed tips to get loan approval quickly.
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