Here are 5 ways to deal with a low CIBIL score

Loans are financial products that can be availed to meet financial requirements. You can take Personal loans, Auto loans, Home loans, Education loans, etc. However, a major problem that people face is a low CIBIL score.

What is a CIBIL score?

CIBIL score is the credit score that is calculated based on your financial behaviour. It analyzes your credit files to create a report. This report is further analyzed to determine your credit score. CIBIL score is the most popularly accepted form of credit score in India.

The CIBIL score affects your eligibility for a loan. Therefore it is necessary to maintain high credit-worthiness. The CIBIL score is affected by your outstanding loans and the regularity of payment for their installments.

How to obtain a personal instant loan without CIBIL score?

Personal loans are usually unsecured, which means you do not need to provide collateral. Therefore, most of the time you cannot apply for an instant loan without CIBIL scores. However, there are several banks and non-banking financial institutions that can accommodate a loan with low CIBIL scores. Here are 5 ways you can deal with a low CIBIL score to get a personal loan:

Step 1: Apply for low amounts of the loan with low CIBIL scores

When you apply for an instant loan without CIBIL or low CIBIL scores, the lender is sceptical about you repaying the loan amount. If the requested loan amount is high, they will most likely reject the application as they are not certain if you can pay it back.

However, if you apply for a smaller loan with low CIBIL scores, they are likely to evaluate your ability for repayment confidently. Moreover, if the loan amount is small, then you can structure a suitable payment plan and repay the loan. This would also affect your CIBIL score positively for future loans.

Step 2:Provide adequate proof of income

Your low CIBIL score may be a result of financial insufficiency in the past. You can counter the subsequent effect it has on your current application for an instant loan without CIBIL or low CIBIL score.

You can provide proof of increased income such as raises, alternate employments, increase in turnovers, etc. If you can prove that you now have a steady mode of income then the lender will have faith in your financial ability to repay the loan. They will approve your loan with low CIBIL scores, though you may incur a higher interest rate.

Step 3: Speak to your loan provider to consider a Not Applicable CIBIL status

If you have a NA or NH on your credit report, it implies the nonexistence of activity. This simply means that you have not used any financial products for credit in the last 3 years. You can speak to your lender directly and explain why you have been inactive for the credit period.

The loan provider is likely to consider your request for an instant loan without CIBIL score as your credit scores are virtually non-existent. Your loan may be sanctioned at a higher rate of interest.

Step 4: Get a guarantor or apply for joint loans

If you have difficulties applying for a loan with low CIBIL score, you can get a co-signer for the loan. This individual acts as a guarantor for your loan. Make sure that the co-signer or guarantor has a good CIBIL score though.

The lender is more likely to approve the loan once they verify the creditworthiness of the co-signer.

Step 5: Check for errors in your CIBIL report

Sometimes your CIBIL report displays a low credit score due to a lack of regular updates. The authorities may have forgotten or missed out on updating your latest credit information. In case you find errors due to genuine mistakes, you can speak to your previous or current loan institutions.

Request them to update your file so that it reflects the correct credit score. Doing so will help you with the approval of your loan with low CIBIL scores. It will also help improve your credit score for future requirements.

Personal instant loan without CIBIL are a beneficial set of financial products that can help you during critical situations. Don’t let the rejection of a loan with low CIBIL scores dissuade you. Apply these techniques to easily deal with the low credit scores and get that loan you need. Alternatively visit https://navi.com/blog/how_to_improve_cibil_score to understand how to improve your CIBIL score.

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James Harrison: James, a supply chain expert, shares industry trends, logistics solutions, and best practices in his insightful blog.