You Can Get a Personal Loan Despite a Low CIBIL Score

A CIBIL score is a 3-digit number that ranges from 300 to 900.

A CIBIL score is the numerical expression of your credit history. It is a tool that is used by lenders to determine your creditworthiness, which is your capacity to repay the loan in future. 
To derive the CIBIL score, the Credit Information Bureau (India) Limited maintains the records regarding loans and credit cards for every individual. This information is then used to create Credit Information Report (CIR) and the credit or CIBIL score, which then used by financial institutions for evaluation of loan applications.
A CIBIL score is a 3-digit number that ranges from 300 to 900. Consequently, if you have a good credit score (750 or more), your loan application will be approved without any hassle. 

The Role of CIBIL Score in Approval of Your Personal Loan Application:
Personal Loans are the perfect option when you need quick access to funds. Further, they are unsecured loans. This means that you do not need to attach any collateral or security, which may be used by the lender to recover the loan amount in case of a default on the repayment. Hence, a Personal Loan is approved purely based on the creditworthiness of the applicant, i.e., based on the CIBIL score. However, remember that while this score is an important factor for getting your loan approved, there are many factors that also affect your loan application.
How to Get a Personal Loan with a Bad or Low Credit Score?
Here are the other ways of getting a Personal Loan even if you have a bad credit score:
  • Collateral Loan: In case your Personal Loan application gets rejected due to a bad credit score, you can try getting a secured loan for which no CIBIL score is required. You can use collaterals or assets like land, gold, fixed deposits etc. that provides adequate security to the lender.
  • Check if your Employer has tie-ups with a Lender: Many large companies have an understanding with a lender to offer loan facilities for its employees. This is especially true if you have been with the same firm for a number of years.  
  • Take a Joint loan with your Spouse or Other relatives: if your spouse or any other family member has a good credit score, you can apply for a joint loan with them. This increases the chances of getting your loan approved.
  • Get a Guarantor: If your friend or a family member with a good credit score agrees to stand as guarantor for your loan, then your loan application may get approved. 
  • Leveraging your Steady and Increasing Income: if you have a steady income, which is reflected in your monthly income statements, then you can use it as leverage to get your Personal Loan approved. If you could also show how your income has been steadily increasing over the years, this may be just the proof your lender needs to sanction your loan request. 
You Can Get a Personal Loan Despite a Low CIBIL Score
You Can Get a Personal Loan Despite a Low CIBIL Score

A bad credit score does not end your chances of getting a Personal Loan. Simply identify your alternatives and simultaneously work towards building or increasing your credit score. You can do this by paying off other loans, making timely credit card repayments and being careful not to default on any EMIs. 
See how a good CIBIL score can help you get a better deal on your Personal Loan. 
Calculate your Personal Loan eligibility and check out your options when it comes to your Personal Loan application. Non-banking financial companies (NBFCs) such as Bajaj Finserv offer instant approvals and attractive interest rates on Personal Loans.