Personal loans are unsecured loans that do not require any collateral or security to pledge for availing of loans. They can be extremely helpful when you require funds in an emergency. But before the lender sanctions the loan in your account, you will have to fulfill various criteria. For estimating the approval of a personal loan, you can utilize the personal loan eligibility criteria checker.

Among every checkpoint of the eligibility criteria, the prime factor is your credit or CIBIL score. But the question is what a good CIBIL score is? Can personal loans be availed by people with low CIBIL scores? Whereas it is not easy to get a personal loan with a low credit card, it’s possible by following a few simple steps and little effort.

Before explaining the steps, let’s understand how a CIBIL score impacts your eligibility for availing of a personal loan.

What is a CIBIL score?

A CIBIL or credit score is the 3-digit number that summarizes your credit history, rating, and repayments. This score usually ranges from 300 to 900. The better is your credit rating; the better will be your chances of getting a loan easily.

This score is based on the borrower's credit history which is the borrower's repayment of debts. A credit report is a summary or record of the applicant's credit history from a number of sources, including banks, credit card companies, collection agencies, and governments. If you have a bad history, the lender will not trust you in giving a loan. The personal loan being unsecured in nature they are not backed by any security. In case a borrower defaults on a loan, the lender will not have any security to cover their loss. Thus, lenders always consider credit reports before extending loans.

If you timely repay your credit card bills, EMIs, or debts on time, it will ensure your creditworthiness to the lender. A score above 650 or 700 is generally preferred by the lender, a score below that is only accepted in rare cases. Also, your interest rates on loans depending on your credit score. The higher your credit score, the lower will be your interest rate. Personal loans for CIBIL defaulters are more likely to be rejected than for someone with a proper credit history.

 

Getting a personal loan with a low CIBIL score

Though being challenging, you can still avail of a personal loan with a poor credit rating by following the measures listed below:

  1. Show evidence of the steady flow of Income

Though you have a low score, if you show a steady flow of income or by having an additional income source, this can make the lender more favorable to your application for a loan. Just assure the lender of a good income source. Do note that you may be subjected to a high-interest rate. Prove that your income can support EMI problems.

 

  1. Ask for a lower personal loan amount

When you ask for a high loan amount this indicates more risk to the lender. When you ask for a low loan amount and show good income for repayment the lender can approve your loan request.

 

  1. Correct mistakes in your credit report

Your CIBIL report might have some errors. This usually happens when the borrower’s latest information isn’t updated against your record. Such mistakes can affect your score. So it is advisable to check your CIBIL score regularly.

 

  1. Involve a co-guarantor in applying for a loan

If your score is low, you can involve a co-applicant or guarantor for availing of a personal loan. The co-applicant will also have to complete the KYC process and provide their signature too. If your lender finds the co-guarantor has a steady income and a better credit score, the lender is more likely to grant you a loan.

These measures might certainly aid you in getting a personal loan even with a bad credit score, you still need to be patient and work on your CIBIL report. Repay your debts, bills, and EMIs on time to maintain a healthy credit report. Try not to default on your loan.

 

Check your CIBIL score with PayMe India

You can get a CIBIL report for free worth Rs. 1500 from PayMe India. To check your score, just visit the website or download the PayMe India app.

If you are looking for a personal loan, you can avail of a hassle-free loan with PayMe India. Get a loan from Rs. 500 to Rs. 2 lakhs. They also accept loan applications on low CIBIL. For a quick disbursal and digitized process, you can get a loan from PayMe India. The process with PayMe India is extremely simple and hassle-free, just download the app, complete the KYC process and provide documents for the address and income proof.