Have you applied for a loan only to be turned down by the bank? The Reason – A CIBIL score that’s less than 750. Well, you aren’t alone. A huge number of borrowers face the same issue. Here, in this article, you can find the right way to take some corrective action and the loan categories that are approved even if you have a low score.
Data from CIBIL records state that over 80% of an emergency personal loan is approved only for individuals who have a CIBIL score of 750 or more. If your score is less than that, don’t despair. You can make use of the following types of personal loans with bad credit and very well meet your emergency fund requirements.
While it’s difficult to avail a personal loan with a poor CIBIL score, you can try to avail a secured loan. Even if your credit history is bad, the collateral you supply is enough for the bank to approve your loan. You are eligible for a collateral loan for gold, shares, Fixed Deposits, Insurance Policy or PPF.
Approach a smaller / Co-operative Bank
There are 500 member banks in CIBIL. These banks have access to your credit history and score. You can try contacting a smaller bank that isn’t yet a CIBIL member. These banks usually provide loans of smaller amounts at high-interest rates. The good news here is that they offer these loans without checking your credit score. So, you’re eligible for bad credit personal loans.
Seek the help of your Employer
Many companies have particular loan policies for their employees. You can obtain the help of your HR or manager. They are likely to help you access some unsecured personal loans with bad credit, especially, if you have served in the company for a few years and/or are a valued asset to the firm.
Make use of your Steady Income Records for a Personal Loan
You are employed and have a steady source of income and the monthly income statements to prove it. You can try approaching the bank where you hold your salary account. Leverage your income to apply for a personal loan. Because of your income history and your relationship with the bank, they are likely to sanction a low-interest personal loan for people with bad credit.
Approach your Friends and Family
Your friends and relatives can help you meet your emergency needs in the following ways:
If your spouse or parents have a better credit score, then you can jointly apply for the loan with that person. This increases the probability of the loan being sanctioned.
Ask a family member or friend with a high CIBIL score to act as guarantor when you’re applying for a loan.
Reach out to Private Lenders
You can approach a private lender if none of the above options works in your favour. However, you must remember that private lenders are likely to ask for higher interest rates.