Are you considering applying for an instant loan? Do you wish to understand how you could get some extra cash in times of an emergency? This article is what you might be looking for the eligibility criteria and how to avail of a loan for low cibil score.
If borrowing a personal loan, is something that you are new to, you must be researching about what a personal loan is, how to avail of it and what the eligibility criteria are. If you are not so new and have already been through the eligibility criteria, you might have come across the term CIBIL score or Credit score. Worry not, if the guidelines of a low CIBIL score have already scared you of not qualifying for an instant loan. In this article, we will be discussing the reasons for a low CIBIL score, personal loan for bad credit, the short-term loan without CIBIL, how to improve your CIBIL score, and much more.
Although it is mentioned that people with low CIBIL scores are not eligible for borrowing instant loans, it does not necessarily mean that you can not avail of a personal loan. Borrowing instant loans is not impossible for people with low credit scores, they might just have difficulties getting their application approved. We will be looking at low CIBIL score personal loans in the upcoming sections and also a few tips to improve your CIBIL scores.
What Is Loaney?
With technology advancing faster than ever and more people moving towards online solutions for all their needs, finance and banking have also made their place in the digital space. Net banking is not a very new service but over time the facilities and features provided by the banks have increased and improvised. Not only have more banks introduced a net banking facility, but most banking work can now take place without moving outside your home. With net banking gaining popularity among everyone, money lending and loan borrowing also have become common facilities online. In addition to the banking giants, a lot of other platforms have now started offering online instant personal loans and short-term loans without CIBIL. Although there is no dearth of platforms offering easy instant loans for low CIBIL scores, you must make sure that the platform you choose is reliable. One of the most trusted platforms for low CIBIL score personal loans is Loaney.
Loaney is a website for your instant personal loan needs. The site is beneficial even when you require extra cash in an emergency because of the quick loan approval procedure. Loaney offers instant personal loans at low-interest rates and for shorter repayment tenures. You need not submit collateral or present a guarantor while applying for a loan on Loaney. The platform ensures 100% confidentiality of client details and does not ask for the reason for borrowing.
You do not need much paperwork or documents for availing of a low CIBIL score personal loan of up to Rs. 15,000 on Loaney. With just a few clicks and by uploading a few readily available documents you can easily apply for and get your personal loan for bad credit approved.
The amount borrowed as a personal loan can be used for any purpose as per your requirement. It can also be used as extra cash in times of a financial emergency. Your lender does not have to know the reason for your borrowing and hence this type of loan can also be used for improving your CIBIL credit scores.
What Are The Reasons For Low Credit Scores In India?
Low CIBIL scores are not uncommon. You could have a low CIBIL score due to several reasons. A low CIBIL score can make it considerably difficult for your loan application to be approved. Before we understand the effects of low CIBIL scores and how the score can be improved, let us understand the reason for a low CIBIL score. The following can be the causes of a low CIBIL score:
- Past Payment Records: Payment history is one of the major factors that impact your CIBIL score and credit report. Delayed or missed payments of even the smallest amounts can lead to a decrease in CIBIL score.
- High Credit Utilization Ratio: credit utilization of more than 30% of the total credit limit can cause a decline in your credit score.
- Multiple Loans: Applying for and borrowing multiple loans within a short duration of time can be harmful to your CIBIL credit scores.
- Too Many Unsecured Debts Borrowed: While borrowing loans, you must make sure to maintain a balance between secured and unsecured debts.
- Error in CIBIL Report: You must keep a regular check on your CIBIL score report to make sure there is no error in the same that indicates low scores.
- No Credit History: Not having any records of loans borrowed previously or credit-related activities can also lead to a low or 0 CIBIL score.
Now that you know the causes of a low CIBIL score, you can work on some of these aspects for a better score and hence an easier loan application and approval. Further, we will be looking at the effects of having a bad credit score and how the score can be improved.
What Happens When You Have A Low Credit Score?
The CIBIL score is a reflection of your past credit-related activities and borrowing history. This 3 digit number ensures the lender that you will be repaying your loans on time and will not be a risk to the lender and the lending organization. The eligibility criteria of borrowing loans mention that the borrower must have a CIBIL score of at least 750. The CIBIL score is calculated between 300 to 900.
As per the eligibility criteria, you cannot borrow a loan if you have a very low CIBIL score. A low CIBIL score is a problem for you if you are considering borrowing an instant loan. Having a bad credit score makes it difficult for the borrower to apply for a loan and get it approved. The loan approval takes longer than usual. In case the loan application does get approved, the borrower will have to pay a higher interest rate for the same amount.
This makes instant loan borrowing more of a financial problem than a solution in times of emergency. This is what makes having a good credit score important. A low CIBIL score does not guarantee that you will not be offered a loan. You can borrow smaller amounts of loans offered by various online platforms as instant personal loans. This instant loan for a low CIBIL score can be useful if you have a poor credit record. In the upcoming sections, we will help you understand how you can borrow a short-term loan without CIBIL and even use the borrowed amount to fix your low CIBIL scores and bad credit reports.
How To Get A Personal Loan When You Have A Bad Credit Score?
To apply for a personal loan with a bad credit score you must follow the below-mentioned steps. This will help you get your instant loan for a low CIBIL score approved faster. The following must be kept in mind while applying for an instant personal loan online with low CIBIL scores:
- Borrowing the loan amount wisely: A loan amount borrowed from a lender also needs to be returned as well and so you must only borrow an amount that you will be able to easily repay.
- Not exceeding the credit limit: You must not exceed the credit limit on your credit cards.
- Closing all defaulted accounts: If you are listed as a CIBIL defaulter, you must close the defaulter account before applying for a new loan.
- Opting for guarantor-backed loans: You must choose loans where you can present a guarantor who has a good credit record and a high CIBIL score.
Keeping the above-mentioned points in mind, you can easily avail of a low CIBIL score instant loan.
How To Improve Your CIBIL Score?
To improve your credit report and increase your CIBIL score to a minimum of 750, you can follow some easy steps. This will help you avail of an instant loan easily with a good CIBIL score. For a better credit report, you must:
- Complete all your payments in time and as scheduled.
- Repay all the borrowed debts and pay your bills on time.
- Maintain all your old credit accounts to have a credit history.
- Avoid taking too many loans and applying for a lot of loans at the same time.
- Not close the paid-off accounts.
If you follow the above steps, you will be able to easily increase your CIBIL score for availing of an instant personal loan.
How To Choose The Best Lender For Bad Credit Score Loan Schemes?
If you are looking forward to borrowing an instant loan for low CIBIL scores then you must also know what factors to consider while choosing the lender. Although you can easily find a low credit score loan app via which you can use to apply for a loan, you must also be careful of the lender being reliable to avoid getting scammed. You must choose lending platforms that offer loans for a low CIBIL score or a platform like Loaney where you do not need to submit the CIBIL score or credit report for a small instant loan.
1. How can I get an instant loan if my CIBIL score is low?
You can get an instant loan for low CIBIL scores by borrowing amounts that you can easily pay, ensuring the lender of the repayment, and presenting a guarantor.
2. Which loan is best for a low CIBIL score?
The best loan for low CIBIL scores is the personal loan which can be borrowed from online platforms.
3. Can I get a personal loan with CIBIL 550?
Yes, you can get a personal loan with a CIBIL score of 550 on Loaney since the platform does not require you to submit the CIBIL score.