A Personal Loan is a great choice when you need money on short notice. In fact, you can use it in a variety of ways. There’s no restriction as to how it can be put to use. Check eligibility and apply for Personal Loan online. After the application is processed, wait for 24 hours and you’ll have the money in your account. It’s that simple.
The major factor that assess your qualification for a credit score is that you’ll need to have a good credit score.
Being an unsecured loan, Personal loans don’t demand any security or collateral. The lender will take a look at your credit history and decide whether you qualify for the loan or not. A high credit score can get you a loan with pretty low interest rates. But a bad credit score can impair the chance of a loan even getting approved.
If you have a bad credit score, it’s not the end of the world. There are still options to consider.
Take a Loan from Family or Friends
This option enables you to get a loan with no interest. If you’re really in a hurry, you can use this to meet emergency expenses.
Approach Other Lenders
Apart from banks, you can also get Personal loans from NBFCs or unorganized money markets like money lenders. Keep in mind that this won’t be as safe as banks.
Take Loan Against Security
You can secure the loan against Fixed deposit receipts or gold. Even with a bad credit score, this security can help you get a loan. Just ensure that you pay off the loan, or else the bank can seize the property that you’ve put forth as security.
Peer -To-Peer Lending
Unlike banks that rely solely on your credit score for the purpose of lending, peer-to-peer lending looks into other aspects such as your current income and appreciates your good intentions to repay the loan. These lenders offer you Personal Loans without putting too much emphasis on your credit score.
Add a Guarantor Who has a High Credit Score
Though you as the lender may not have a good credit score, you can bring in a guarantor who has a high credit score. This can help you get the loan easily.
Mainstream lenders are open to giving you a loan at high interest rates or a lower quantum of loan.
Though you might find alternatives to get a loan with a bad credit score, you should be trying to improve credit score the best you can. This can improve your financial discipline and get you back on track to getting your own loan applications approved.
How to Improve your Credit Score?
The credit score assigned by the CIBIL authority. It’s usually in the range of 300-900. Lenders look out for a credit score of 750+ to approve a loan. Here are some ways which can help boost your credit score.
Pay your Bills on Time
Whether it’s your credit card bill, utility bill, or EMI, make sure that you set up reminders and pay them before the due date. Due compliance will not only help save on late fees, but also give a boost to your credit score.
Settle your Credit Card Balances
There’s a general trend to overuse a credit card till the maximum limit and default. It’s best to ensure that all your credit card balances are settled during the respective credit cycles, so that you’re not burdened with high outstanding. It’s recommended that you spread your purchases over 2 or 3 credit cards so that you don’t stretch credit limits.
Stay within your Credit Limit
Staying within your credit limit is something that can ensure that you don’t go overboard with your Stretching to the maximum limit is a clear indicator of your dependence on outside credit. That can reveal the full extent of your financial troubles. Ensure that you don’t exceed 30% of your credit limit.
Avoid Multiple Loan Applications
Applying for loans from multiple lenders within a short period of time can be a blot on your credit history. The rejection from the vendors can affect your credit score, and this can also show that you’re eager to get your hands on credit.
Check your loan eligibility and the prerequisites set by the lender, before applying for a loan.
Improving your credit score helps you get Personal Loan easily at low interest rates. With a bit of financial discipline, you can enjoy a high credit score that can help you in the future.