Get your CIBIL right: How to become eligible for a personal loan with a low CIBIL score
A personal loan is useful to fund a range of financial needs, including home renovation, children’s education, medical emergency, family wedding or a dream vacation.
To improve your chances of getting a personal loan in the near or long-term future and securing reasonable interest rates, you need must have a good CIBIL score.
The CIBIL score is an indicator of a person’s creditworthiness, or their ability to repay loans.
A good CIBIL credit score is considered to be 750 or higher.
Follow our guide to enhancing your CIBIL score that will increase the likelihood of being eligible for a personal loan with a low CIBIL score –
Most lenders will reject the personal loan application if your CIBIL score is less than 550. A low CIBIL score will indicate that you are not financially stable and will find it difficult to repay the loan. Few lenders do provide personal loans for a low credit score. However, the interest rates will be high. It is important that you check the terms and conditions and compare the charges and interest rates before availing the loan.
Factors Affecting Credit Scores:
There are many factors that affect credit scores, either positively or negatively.
- Factors that affect credit scores positively
- Making timely payments towards credit cards.
- Paying loan EMI’s on time.
- Paying not just the minimum due but the entire outstanding balance.
- Factors that affect credit scores negatively
- Non-payment or late payment of credit card bills and loan EMIs
- Maxing out credit cards or consistently using more than 75% of the credit limit.
- Paying only the minimum due on credit cards; the remainder is still considered overdue.
- Possessing too many lines of credit especially unsecured forms.
Surprising Ways Your Credit Score Impacts Your Loan
Your Credit Score plays a significant role to play in the approval of your loan application. Let’s check your score for free in less than 3 minutes and understand its powers.
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- Crucial Role
When applying for a loan, your Credit Score is as important as your employment history, salary, and other eligibility factors. Make sure your score is at least above 750. 800 is a great number!
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- Past Matters
One of the parameters for a loan approval is the repayment history of the applicant. How do they find it? By checking your Credit Score. Good repayment history = good Credit Score.
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- Loan With No Or Low Credit Score?
This may be possible, but be prepared for a longer processing time as banks will put in some additional checks. Moreover, you might not always get the best deal.
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- Error-Free Credit Report
Sometimes errors can make their way into a spotless credit report and mar your lovely Credit Score. Give your report a glance before submitting your loan application to rule this out.
Avoid trouble, you must! So let’s check your Experian Credit Score for FREE! You read that right. We don’t charge a rupee. Just click the link below and get started!