Personal Loan: A person with a low credit score can opt for a guarantor. NBFCs are also more likely to get loans
Personal Loan: A CIBIL score of more than 750 is considered good for a loan, but those with a CIBIL score less than this have to take a lot of trouble to take a personal loan, but there is no need to worry.
Here we are going to tell you how you can apply for a personal loan.
cash liquidity problem
According to Manish Hinger, a chartered accountant and founder, Fintu (Wealth and Tax Advisory Online Platform), cash liquidity has become a major problem during the pandemic.
Although the expenditure has come down due to the lockdown, but cash flow has also suffered. To meet certain requirements, investors look to encash a part of their investments, such as FDs and mutual funds. ”
The lender takes several aspects into account
Personal loan falls under the unsecured loan category and the lender does not ask for any security against the personal loan. The eligibility criteria for a personal loan is a bit stricter than for a secured loan.
The lender takes into account several aspects while appraising the loan application. These parameters include the applicant’s age, occupation, annual income, loan repayment capacity and temporary/permanent residence details.
Other important parameters include the business/employer details of the individual and his/her credit history/score.
Credit score important aspect in the application process
Availing a personal loan is not easy, especially if you have a low credit score. Credit score is an important aspect in the application process. It gives an indication to the loan provider about how you have performed in the past in repaying the loan.
Generally, anything between 650 to 699 is considered average, but anything below 649 is a poor CIBIL rating, which can either be rejected by the loan provider or at a very high interest rate. will agree to lend
Rohit Sen, co-founder and CEO of NIRA explains that your credit score reflects your creditworthiness. Having a good credit score will help you in getting a personal loan in many ways.
How can one get a loan despite a low credit score?
A person with a low credit score can opt for a guarantor who has a good credit of his own. Also one can deposit collateral security.
Sen says, “A better option would be to either mortgage the property or use a guarantor. This way you will be able to rebuild your credit score by borrowing at a lower cost and making timely payments.
Apart from this, the option of taking a joint loan will also be better.
More chances of getting loan from NBFC
There is also a greater chance of getting loans from Non-Banking Financial Companies (NBFCs) today. However, the interest rate on the loan availed from here will be higher.
Many fintech companies are now using a comprehensive set of data to evaluate borrowers with no credit scores, who are usually unable to access loans from banks.
Nowadays for personal loans, many organizations also have a policy of giving loans to their employees if they are working with this organization for a very long time.
