Do you agree that there are some things that money can’t buy? Yes, we agree too!
But money CAN buy the best of the things that make us happy. Be it a dream house, a fantastic car, a family trip to your dream destination – you ‘got to have’ money at your disposal to acquire them. You also need money to cover for any unseen or unplanned exigencies. But, these days, you do not need to worry at all, even if you do not have enough money in your account.
Ever wondered how?
A personal loan can be the perfect answer to this question. This is just an excellent tool to address the short-term financial needs of an individual. But, whether you are salaried or self-employed, you need the ‘armory’ of a good CIBIL score to get your personal loan approved.
Why is CIBIL score important?
Banks are interested to know the credit score of a borrower before approving a loan. From the credit score, the bank evaluates his creditworthiness. The higher your credit score is, the more creditworthy you will be to the lenders. Your credit score will determine where you stand in the eyes of the lenders as the interest rates you will be offered for personal loans (and other related offers) will heavily depend on it.
If you have a bad credit score, you may not be able to get the best personal loans approved for you. Even if your loan application gets approved somehow, you may be asked to pay higher personal loan interest rates and may be offered unfavorable terms and conditions when you apply for personal loan, as compared to those borrowers with excellent credit score.
The credit score prepared by CIBIL (Credit Information Bureau India Limited) is widely used by banks/NBFCs to evaluate the eligibility of a borrower for getting the best personal loans. This 3 digit number can summarize the entire credit history of a borrower and is based on information available monthly from different banks/NBFCs. Banks and other lenders provide card and loan payment information of their consumers to CIBIL( TransUnion CIBIL, these days) every month. CIBIL then calculates the credit scores of individual customers by using statistical techniques such as extrapolation and publishes these in the form of 3 digit numbers. It provides a useful metric to determine the probability of an individual/business to meet his/its debt obligation. A CIBIL score starts from 300, and a score below 750 is considered to be on the lower side.
Therefore, it is always advisable to keep on improving your CIBIL score now and then. Here are some ways by which you can improve your CIBIL score–
- Pay off dues on time
- Avoid purchasing new credit cards
- Check credit cards for accuracy
- Build a longer credit age
- Clear up collection accounts
- Have patience
What are the reasons for a low CIBIL score?
A bad or low CIBIL score gives an impression to the creditors that you are not good at managing your credits. Hence, they can be hesitant to approve your loan application or may even turn them down.
You may have a low CIBIL score because of one or more of the following reasons-
- Late or missed payments on your credit cards/loans
If you make your loan/credit card payments (interest repayment/minimum amount payment) after the due date, your CIBIL score is impacted negatively.
- Too many inquiries for credit
If you have made multiple applications for loans/credit cards within short time duration, it will be a cause of concern for your potential lenders. It will look to them as if your debt burden will possibly increase and your repayment capacity will decrease in the foreseeable future.
- Reaching credit limit frequently
If your credit card spending touches the credit limit on a regular basis, it will lead to a high repayment burden, and it will impact your repayment capability negatively.
- Written off account
Ways to get the best personal loans with low CIBIL scores
The following options could help you to avail the best personal loans in spite of having a low CIBIL score:
- Collaterals: In case your CIBIL score fails to get you an unsecured personal loan, you may opt for a secured loan. You can use collaterals in the form of land, gold, fixed deposits, etc. to get a secured personal loan even with your low CIBIL score.
- Joint loan: You may opt for a joint personal loan with your spouse or any family members who have a good CIBIL score. Your personal loan is more likely to be sanctioned based on your ‘combined’ CIBIL score.
- Guarantors: If you manage to have a guarantor from your family/ friends having a good CIBIL score, you stand a higher chance of getting the best personal loans sanctioned.
- Employer tie-ups: Check if your employer/ organization has a tie-up with any of the lenders about their corporate strategies. As a part of such tie-ups, banks often offer special benefits/schemes on personal loans or other financial products to the employees of the organization. These facilities may be beneficial to you.
The bottom line:
“Afinoz “is there to take care of your financial health and our dedicated experts will provide you with the best possible financial advice related to getting personal loans with a low CIBIL score.
Sign up at Afinoz.com, and you can check your free CIBIL score in a fast and convenient way. You will also discover the factors that affect the credit score and our experts will tell you how to keep on improving your credit ratings continuously.
Want to repair your existing credit portfolio? You need to go through a heck of research. Don’t you worry! At Afinoz, we will do all that for you so that you can get the best available personal loan offers from lenders.
For any query, feel free to call us at 9899889816 or fill this blog form.