5 Ways To Get A Loan With A Low CIBIL Score

As a business or an individual, having a good credit score is crucial when seeking a loan. However, if you have a low CIBIL score, getting a loan or availing any financial support can be difficult. A low CIBIL score indicates that you may have had credit defaults or delayed payments in the past, which results in a low credit score. But, there are still some ways to get financing even with a low credit score. Here are 5 ways to get a loan with a low CIBIL score.

1. Get A Loan Against Collateral

One of the fastest and easiest ways to get a loan with a low CIBIL score is to apply for a secured loan. Secured loans are those loans in which banks or NBFCs require collateral to be pledged as security. You can apply for loans against assets such as property, gold, and fixed deposits.

Also Read: 5 Big Factors That Affect Your CIBIL Score

2. Apply For A Personal Loan With A Co-Applicant Or Guarantor

Another way to increase your chances of getting a loan with low CIBIL scores is to apply for a personal loan with a co-applicant or a guarantor. Doing so will increase your chance of getting a loan at lower rates as the bank or NBFC may consider their credit score while processing your loan application.

3. Apply For A Loan With NBFCs

NBFCs or non-banking financial companies are more lenient in terms of credit score requirements than banks. So if your CIBIL score is low, you can try applying for a loan with NBFCs. They have more flexible lending criteria than banks and offer a higher chance of approval. However, the interest rates are usually higher than those of banks.

Also Read: What Is NBFC And How It Works?

4. Apply For A Loan With A Peer-To-Peer Lending Platform

Peer-to-peer lending platforms or P2P lending platforms offer loans directly to borrowers. They link investors and lenders to borrowers, and the loans can be secured or unsecured. The interest rates offered by P2P lending platforms are usually lower than those offered by other lenders, but you’ll still need to meet their credit requirements.

5. Improve Your CIBIL Score

Finally, if you’re unable to get financing with a low CIBIL score, you can improve your credit score and then apply for a loan with better credit terms. You can improve your CIBIL score by paying off outstanding debt, not missing any payments, and reducing credit card balances. Once your score improves, you can apply for a loan again.

Final Thoughts

Having a low CIBIL score does not mean that you cannot get financing. With a bit of effort, you can find lenders who will offer you loans despite your credit score. However, you should be prepared to pay higher interest rates than borrowers with good credit scores, and you should also work to improve your credit score over time.