Pesonal Loan Tips: If you are thinking of taking a personal loan, then this news is for you. In this news you will know how to get a personal loan with a bad credit score.
Pesonal Loan Tips: Personal loan is a facility that helps to meet the financial needs in difficult times. Your credit score mainly determines your loan eligibility. If your credit score is low, it may be difficult to get approval from traditional lenders like banks or financial institutions.
A score below 600 is generally considered a poor or weak score, while a score of 750 and above is considered good. Here we will tell you how to get a personal loan with a poor credit score in India.
1. Know your credit score
Be sure to check your credit score before applying for a loan. If you know your credit score, you will be able to understand your financial situation better and know what may cause problems in loan approval.
2. Contact multiple lenders
There are certain special financial institutions in India that offer loans to people with a bad credit history. These financial institutions may charge higher interest rates to balance the risk, but are not strict about credit scores.
3. Avail a secured loan
If you have a poor credit score, a secured personal loan can be an option. Here, you pledge an asset such as a car, immovable property, fixed deposit, etc. to the lender as security. However, if you don’t repay the loan, you may lose the pledged asset.
4. A guarantor or co-applicant
If you have a co-applicant or guarantor, a good credit score can increase your chances of loan approval. If you don’t pay, the guarantor or co-applicant will take the responsibility of making the loan payments.
5. Improve your credit score
Increasing your credit score is one of the best ways to get better loan terms in the future, but it takes time.
6. Provide proof of stable income
Lenders want to ensure that you can repay the loan EMIs on time. So provide documents of your stable income – like your salary slip, bank statement, or income tax return.
7. Consider short-term loans
Short-term loans usually involve a small amount of money and a short repayment period. Since lenders have a low risk, they easily lend short-term loans to people with poor credit risk.
