Have you ever thought about taking a personal loan after getting a low CIBIL score? Or, let me put it this way, are you thinking of taking a personal loan even though you think it will be a challenging task? If yes, then you have come to the right place. Getting instant loan for low CIBIL score could be one of the most daunting financial steps you could take in your life. However, having low CIBIL scores should not stop you from getting the amount you need to loan from the bank.
In this article, we have covered everything that you need to know about what is CIBIL score, how to check your CIBIL score and all related information.
If you are thinking of getting a personal loan for the first time, we know how complicated the idea might seem to you. We understand that you must be confused about where to start while you still have a low CIBIL score. But we do have a solution.
Loaney is one of the online platforms where one can easily get instant loans. The hassle-free process ensures the approval of a loan in no time. If you have a low CIBIL score, Loaney will help you get a personal loan almost instantly.
Loaney is an online platform where you can get instant personal loans online. This online platform offers convenient methods for instant loan approvals. Loaney will guide you through the process of increasing your CIBIL score for a personal loan.
Loaney offers a complete and efficient digital platform to their clients for filling out the application forms to get instant personal loans online.
So, let us start with the differences between regular loans and personal loans. With this detailed guide to get an instant personal loan, you are sure to gain a perspective on the concerned matter.
What does a ‘loan’ mean?
The term ‘loan’ means borrowing money from a lender and then returning the money in installments. When you return this amount, a small number of interest rates are applicable along with it. Paying back your loan is like paying the bank a “rent”.
In ancient times, the system of banks was not so prominent. As a result, many people fell victim to unfairness and money fraud from some moneylenders and merchants. As time passed, both the system and the government brought about a change keeping in mind that people should lend money from a Genuine system. Several certified banks were established thereafter. These banks had certain rules that everyone had to follow. Anyone who wanted to take a personal loan had to follow the rules set by the bank.
The system of issuing loans through certified banks turned out to be much more convenient and safe for the majority of people. The banks usually come up with different structures of loan repayment suitable for the clients, and each amount of the loan taken has different eligibility criteria.
When a bank lends you a certain amount for your personal loan, you pay them back through monthly installments. For personal loans, the tenure of paying back commonly differs from five to seven years minimum. Anyone who takes a loan from a bank gets a fixed interest rate imposed on the payment that needs to be returned to the bank.
The interest rates never differ with time. They always remain the same for the whole tenure till the loan gets completely repaid.
What is a personal loan?
A personal loan is an ‘unsecured debt’. A personal loan, unlike other loans, does not require a guarantor or collateral.
Wondering what collateral could mean? Have you ever seen or heard people giving up any of their prized possession or anything of great value such as their house, vehicle, or a piece of land because they could not repay their loans? That is what is meant by collateral.
It is anything that is given as a security assurance when someone fails to repay their loan to the bank.
A guarantor is a person who acts as a body that is a confidante of the person who has applied for the loan. In case, the original payer meets with any unfortunate situation that might lead to them not being able to pay the loan, the bank turns to their guarantor.
There have been many cases where the original loan payer passed away, and then the bank turned to the guarantor for repayment.
Personal loans can be used for almost anything, such as a wedding, investing in your child’s education, buying a nice and cosy home, or renovating it.
Getting an instant loan with a low CIBIL score generally requires the original loan payer to turn their low scores into a high score. To know how a CIBIL score can be increased above 750, read further.
A CIBIL score is a three-digit number that determines your credit score. Your credit score is determined by various factors such as your bill payments, transaction histories and so on.
Let us look into a detailed description of what is CIBIL score and how does it impact your loan.
What is the CIBIL score?
As discussed above, a CIBIL score is a three-digit number that accounts for your credit scores based on your transaction histories.
To get an instant personal loan, one should have a CIBIL score above 750. Having this minimum score value ensures hassle-free loan approval. The CIBIL score is determined by looking into your credit card history. The vital things that the lenders or the banks usually look for are:-
- Timely payments of bills
When a loan application is sent out for approval, the first thing to be checked is whether you pay your bills on time or not. The bills can be anything, starting from your electricity bill to your bills from a lazyPay account.
Every payment will be verified keeping in mind the timely payments. When a person has a record of untimely bill payments, the score tends to decrease. Many a time they might be subjected to the tag of CIBIL defaulters. Hence, timely payment of the bills is very vital.
- Timely payments of instalment of loans
When you apply for a loan, the bank initially checks for your loan histories. This means that the bank looks for information regarding your previous loans. If the loans are paid on time, CIBIL scores are awarded to you.
However, if you fail to pay your loans on time, your CIBIL scores will be deducted.
- Maintenance of the regular payment period
Every transaction, say paying your pending bills or repayment of your loans, has a time period. To maintain your CIBIL scores, your payment activity should reflect regularity. Any failure regarding the time of the payment activity might lead to the deduction of your CIBIL scores.
In case you get a bad CIBIL score, or, you are categorized under a CIBIL defaulter, you might face some challenges. It is usually observed that a person who has a low CIBIL score does not get a loan approval right away. However, that does not mean that a CIBIL defaulter will not get a loan at all. There are ways through which they can improve their scores to get instant personal loan online. We will discuss this segment in detail further in this article.
Personal loans usually have fixed terms and fixed interest rates. This means that an instant personal loan is set for a short period of time. Ranging from one year to five years, the payments are deducted timely from your bank accounts. This tenure is for loans that range from 20,000-25,000 INR.
Loans that range to several thousand lakhs, the tenure to repay such loans are a bit more. They range from five years to seven years.
Now, the question is, not everyone who looks like a genuine lender is who they claim to be. Hence, the question arises about how would you determine who is genuine and who isn’t.
To determine a genuine lender, you must look into the interest rates of the loan. The interest rates in any personal loan do not fluctuate with time. They stay the same. No matter how long it takes a person to repay the loan, the interest rates remain unchanged.
Here are a few points to ponder as you might wonder how to maintain their CIBIL scores.
How to maintain your CIBIL Score to get an instant loan for low CIBIL score Online.
To get an instant loan for a low CIBIL score, one should try to reach a score above 750. Any score that is above 750 is considered a good score. The CIBIL score is determined by looking into your credit card history. The vital things that the lenders usually look for are:-
- Your bill payments and the time
- They look at whether you pay your loans on time or not.
- You need to maintain a regular payment time interval.
If anyone fails to maintain at least the above-mentioned criteria, which we discussed in detail above, they might get into a CIBIL defaulters list.
How do people having a bad CIBIL score get an online personal loan?
In case you get a bad CIBIL score or are a CIBIL defaulter, you might face some challenges regarding the approval of your loan. It is usually observed that a person having a bad CIBIL score does not get a loan approval right away.
The reason being that a bank needs to trust its borrower fully before assigning the approval for the loan. They need a good CIBIL score for loan approval. Having a good CIBIL score for a personal loan creates an impression to the lender that their money will be repaid well on time.
However, that does not mean that a CIBIL defaulter will not get a loan at all. There are ways through which they can improve their scores to get instant personal loan online. To know how to get a good CIBIL score for loan approval read the article further.
In order to know how to get an instant loan for a low CIBIL score, we must understand the general working of the borrowing of a loan.
- How instant personal loans work in general?
In the above segments, we briefly discussed instant personal loans in general. Now let us dive in deep to understand every little detail regarding how can you initiate the process of taking a loan.
As stated above, a personal loan is an unsecured debt that does not demand any collateral in return. Now, requiring no collateral makes a personal loan a little risky for the lender. Hence, they are provided upon a thorough investigation of a person’s credit score.
A personal loan is a great way to meet the financial shortcomings that a person may face in their household. Be it a house, a car or any education, a personal loan can take care of any financial need. However, there are some procedures that need to be followed by a customer in order to get their loan approved.
Here is a step-by-step procedure to know how you can get an instant personal loan.
- Filling of Application Form:-
The very first step is to fill out an application form. The application form consists of various fields which require different information related to the client.
The information may vary according to the loan the client is taking. Such as
- Personal details of the applicant consist of fields like the applicant’s permanent address, contact number, marital status, current residential details, and much more such information.
- Employment details include whether the applicant has a full-time job or a part-time job or is pursuing their education, details of the employer, current salary, etc.
- Self Employment details are required when the applicant is not associated with an organization, in which case, details of their own business will be required.
These are some general information required to fill out an application form to get an instant personal loan.
What can an instant loan be used for?
As we discussed, an instant loan can be used for almost any purpose. However, some of the major reasons as to why people take personal loans are,
- To buy a new house.
Over the years, buying a house has been one of the people’s top priorities. Buying houses has always been an expensive affair.
Even people with good financial situations do not buy houses without taking personal loans. Hence, taking an instant personal loan is very beneficial in buying a house.
- Refinancing of Credit card debt.
Many people get stuck with credit cards that come with high-interest rates. This results in increasing debts on credit cards.
Hence, taking a personal loan ensures a fixed amount of monthly payment.
- Medical expenses and bill payments.
In times as challenging as during a pandemic, medical expenses in almost every household have seen a sudden rise.
While most of us have been spared, there have been many people who have been hard hit by enormous medical bills reaching up to several lakhs.
Paying those bills right away is not a feasible option for everyone, and hence instant personal loans can be a big boon.
- Buying a brand-new vehicle.
Owning a vehicle nowadays is a necessity. Without having your own vehicle, the situations get a bit paralyzed. Vehicles provide you with flexibility.
While the bigger cities and metro cities have good and affordable public transport facilities, the regional cities seem to have lesser amenities. Hence, it is vital to have at least one vehicle that can serve as a convenient mode of transport. Then again, buying a vehicle, especially a car, can be expensive. Hence, it is wiser to buy a car using the money borrowed from a loan.
- Finances for wedding and similar celebrations.
Weddings, no matter which part of the world they are happening, it is always expensive. A wedding without an exotic location with pleasant scenery and amassing different events is considered a dull affair. All this sums up the fact that the bigger a wedding gets, the greater the expense incurred.
Hence, families who cannot pay for the entire wedding right away take personal loans and then repay the bank through EMI.
These are some of the many reasons why people choose to take personal loans from banks or any non-banking organizations.
What are the ranges of a CIBIL score?
CIBIL scores are mainly categorized into two types.
- Good CIBIL score – the scores of more than 750 or any score ranging within 750-900 are considered a good CIBIL score.
- Bad CIBIL score – any less than 750 or any score ranging from even 650-750 is considered a bad CIBIL score.
Maintaining a good CIBIL score is very vital to get faster loan approval. The ways to keep your CIBIL score on the good side if you are a CIBIL defaulter and otherwise is discussed below.
What is a Low or No CIBIL score?
We know now that what is a good CIBIL score and a bad CIBIL score. What if I tell you that good and bad CIBIL scores for personal loans are further categorized into various sub-categories.
Yes! That’s right. So, to get a better understanding, here are the sub-categories:
- Excellent CIBIL score: An excellent CIBIL score comes under the category of a good CIBIL score. The CIBIL score range of excellent CIBIL score is from 750-900.
- Good CIBIL score: A good CIBIL score range from 700-749. However, this score is not entirely good as much as scoring anything above 750.
- Average CIBIL score: An average CIBIL score ranges from 650-699. This indicates that a borrower is neither bad nor very good regarding their payment. The scores are given according to their payment histories.
- Poor CIBIL score: A bad CIBIL score ranges from 550 to 649.
- Bad CIBIL score: A bad CIBIL score is any score that is below 550.
Hence, a low CIBIL score, or a No CIBIL score is anything that comes under the category of poor and bad CIBIL scores. If anyone falls under these categories of CIBIL score for loan approval, the chances of their loan application getting rejected are very high.
How to check CIBIL score?
Any checking regarding the CIBIL score is mostly done online. In January 2017 the Reserve Bank of India decided to enable all licensed credit checking companies to check the credit score of applicants online. This checking is done free of cost.
Let us look at the stepwise guide to check your CIBIL scores online.
Step 1: Open the CIBIL website and fill a form.
Step 2: Fill out all the necessary information such as your name, address, contact number, e-mail ID etc. and click on “step 2”
Step 3: This is an important step. The form on the webpage will ask for your PAN number. Make sure to fill in your PAN number very carefully.
Step 4: After filling this in, you need to fill in all details regarding your credit and transactions. Make sure to fill this in all honesty.
Step 5: After you fill out the required information, your CIBIL score will be calculated based on your credit history. A detailed report will be sent to you after a few minutes of the calculation in your registered e-mail.
This was a stepwise account of how can you check your CIBIL scores.
How to get an instant loan for a low CIBIL score with Loaney?
Getting loans from Loaney is very instant and hassle-free. All you have to do is follow a few simple steps which include registration, followed by an instant loan approval process.
The registration process consists of fields in which you will have to fill out some personal and general details. This registration form is then sent out for approval. The loan gets approved instantly after the approval process and the loan amount is credited to your account.
So with all this information at your hand, you must have some questions. Here are some frequently asked questions that might help answer them.
- What is the easiest way to get a personal loan?
The easiest way to get a personal loan is to maintain your CIBIL score. If you start keeping track of your credits and spend your money wisely, a loan can be easily approved.
- Does applying for a loan hurt your credit?
No, applying for a loan never hurts your credit. Untimely payment can surely be a glitch.
Getting a personal loan is a very good financial decision. While getting approval for personal loans is not very tiring, maintaining a good CIBIL score can prove to be a challenge sometimes. In case your CIBIL score is not up to scale, you still need not worry because there are always ways through which you can get your loan approved. The best way to increase your CIBIL score is either by increasing the score count by curing your transaction credit history, timely payments of bills and loans, or you can always create a new account and start afresh.