Lenders often check your CIBIL score before lending loans. Get to know how to get personal loans with low CIBIL score with IIFL Finance. Visit for more details!
3 Dec,2017 23:30 IST2009 Views
A personal loan is an unsecured loan that you can avail of emergencies. Lenders who offer personal loan check your CIBIL score before lending. To understand how this works, you need to first know about CIBIL and its relation to the personal loan.
What is CIBIL Score and why is it important for Personal Loan?
CIBIL (Credit Information Bureau, India Limited) prepares a credit score which acts as the first criterion to check the eligibility of a person for a personal loan. This credit score is a three-digit numeric summary of your entire credit history. This is based on the information provided by banks and other financial organizations on a monthly basis whose value ranges from 300 to 900. A score lower than 750 is considered as a low CIBIL score. Banks generally do not sanction personal loans of people with a low CIBIL score, or even if they do, they may charge a very high rate of interest.
When applying for the loan, CIBIL score is the first thing they would check. CIBIL score depends upon the repayments of personal loans, home loan, vehicle loan and/or credit card debts. In case the repayments are done in a timely manner, it will translate into a good CIBIL score. On the other hand, untimely payment of dues and EMIs will have a negative impact on your CIBIL score.
A personal loan is a loan taken to deal with personal emergencies. So, to sanction a personal loan, a lender thoroughly checks if the applicant is capable enough to repay the loan timely. Since there is no collateral or security deposited with the lender, it is important for them to check the past history of the applicant in terms of credit repayment via CIBIL score.
What are the factors causing a low CIBIL Score?
The following are the factors causing a low CIBIL score:
- Multiple loans cause a low CIBIL Score.
- High Utilization of credit limits.
- Untimely payment of loan EMIs or Credit card dues.
- A higher percentage of unsecured loans.
- Having no credit history at all.
- Too many rejected loans/credit card requests.
- Settling credit cards with the bank by paying a lower amount than the dues.
How to get a personal loan with a low CIBIL score?
A low CIBIL score might lower your chances to get a personal loan sanctioned but still, there are other options which could be explored in order to avail a personal loan with a low CIBIL score. The following are some of the options which could help to get a personal loan despite a low CIBIL score:
- Collateral loan: In case if the personal loan application does not get sanctioned, one can try to get a secured loan. Collaterals such as gold, land, fixed deposits etc. can be used to avail a secured loan even with a low CIBIL score.
- Check for tie-ups between your employer and the lender: If you work in a reputed firm, there are fair chances that it might have tie-ups with the lenders as a part of corporate relations. As a result of such tie-ups,the bank often offers special facilities on loan and other banking facilities. This could be helpful in getting a loan.
- A joint loan with your spouse or family member: Check with your spouse and family members if they have a good CIBIL score. In case anyone in the family has a good CIBIL score, you can take a joint loan which could be sanctioned based on both of your CIBIL score.
- A guarantor: If you are able to get a guarantor among family or friends who have a good CIBIL score then there is a higher possibility you might get a personal loan sanctioned based on guarantor’s CIBIL score.
- Other Sources: Other sources apart from banks which might lend you are worth considering too. Non-banking finance companies (NBFCs) are more than willing to offer you a loan but at a higher rate of interest than that of the bank.
Although a good CIBIL score is required for getting a personal loan, these alternate options mentioned can help you to get a personal loan despite a low CIBIL score.
Disclaimer:The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites.Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.
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Secure a Guarantor or Apply with a Co-ApplicantCan I get a loan if my CIBIL score is low? ›
If your CIBIL score is low, a majority of lenders may hesitate to approve your loan application. If they do so, they're likely to charge you a higher interest rate compared to those with a higher CIBIL score. Instead of applying for a loan with a low credit score, try to improve your CIBIL before applying.What is the lowest CIBIL score for a personal loan? ›
One of those criteria is the fact that your CIBIL score should be in the range that is considered to be healthy by most lenders. Your CIBIL score, which stays within the range of 300-900, should be equal to or above 750 for you to even stand a chance of getting approved for a personal loan by a lender.Which loan app is for poor CIBIL? ›
|Loan App Name||Rate of Interest||Loan Amount|
|MoneyView||1.33% per month onwards||Rs. 5,000 to Rs. 5 Lakhs|
|MoneyTap||1.08% per month onwards||Rs. 3,000 to Rs. 5 Lakhs|
|Loanbaba||0.1% per day onwards||Rs. 5,000 to Rs. 2 Lakhs|
|Prefr||18% to 36% p.a.||Rs. 10,000 to Rs. 3,00,000|
This score ranges between 300 and 900. The higher the score, the better the eligibility. Usually, a score of 550 to 600 is considered low and insufficient to meet the personal loan eligibility criteria. Therefore, availing of a personal loan with a CIBIL Score of 550 is difficult.Can I get a loan with 500 credit score? ›
Lenders may accept borrowers with a 500 credit score but expect you to meet additional criteria, such as a minimum income or employment history. Look into fees and interest rates. Ask about fees and interest rates you might pay if you get a loan.How to get instant loan 50,000 with low CIBIL score? ›
Apply With a Co-Applicant
If you have a low or no CIBIL Scorе, you can add a co-applicant to your online business loan application with a good credit history and incomе. A co-applicant is somеonе who sharеs thе rеsponsibility of rеpaying thе NBFC loan with you, such as your spousе, partner, sibling, or friеnd.
However, it is safe to say that if you want to have a decent chance to qualify for a $3,000 unsecured personal loan, you may want to have a minimum score between 610 and 640.What credit score do I need for a $5000 loan? ›
Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.Can I get a personal loan with a 540 credit score? ›
While it's possible to get a personal loan with credit score of 540, it's not always easy. Borrowers in this range may have to work a little harder to find a lender willing to work with them.
You could consider a loan with higher risk
Guarantor loans – where someone (usually a relative) promises to make your repayments if you can't. Finding a guarantor with a good credit history can help you get a loan with better rates or a higher limit.
|Credit Card Name||Benefits|
|SBI Advantage Plus Credit Card||EMI benefits|
|ICICI Bank Platinum Credit Card||Fuel & Dining|
|YES Prosperity Rewards Credit Card||Rewards, Dining & Fuel|
|Axis Bank Insta Easy Credit Card||Rewards & Dining|
- Set Reminders or Standing Instructions to Repay on Time. ...
- Check for Errors in your CIBIL Report. ...
- Try Maintaining Healthy Credit Mix. ...
- Clear all Credit Cards Dues. ...
- Avail Secured Credit Card. ...
- Avoid Multiple Loan Applications in Short Duration. ...
- Reduce your Credit Utilization Ratio.
They may have had many late payments, carry too much debt, have accounts in arrears, collections, judgments, or other credit issues. It's possible to get personal loans for a credit score under 600, but lenders typically require a considerable amount of information from the borrower before granting an approval.What is the lowest CIBIL score? ›
CIBIL Scores are measured on a scale between 300 and 900, with 900 indicating the highest and 300 being the lowest. The minimum CIBIL score that a borrower generally needs to maintain to be easily eligible for a personal loan is 750.Can I get a personal loan with a 582 credit score? ›
You aren't likely to get a lender's best rates on a personal loan without a good credit score, but a FICO score of 582 should allow you to qualify for one. This is especially true when it comes to personal lending marketplace like Upstart that specialize in loans for consumers with less-than-perfect credit histories.How much CIBIL is required for loan? ›
Ans. No lender specifies a minimum CIBIL score requirement for a personal loan application. However, a score of 750 and above is preferred by lenders for loan applications. This score reflects the creditworthiness of the borrower and the chances of lenders approving the loan application with this score increases.What credit score is too low for a loan? ›
Payment history is weighed the most heavily in determining your credit score, along with your total outstanding debt. Generally, borrowers need a credit score of at least 610 to 640 to even qualify for a personal loan.Can I get a loan with 520 credit score? ›
A 520 credit score personal loan can be a great way to get the money you need when you have bad credit. There are many lenders who are willing to work with people who have bad credit, and they can offer you very competitive rates.What is the lowest CIBIL score possible? ›
CIBIL Scores are measured on a scale between 300 and 900, with 900 indicating the highest and 300 being the lowest. The minimum CIBIL score that a borrower generally needs to maintain to be easily eligible for a personal loan is 750.