Personal Loans for Bad Credit

Bad Credit Loan

Bad credit can be one of the world’s most stressful experiences. If a financial disaster occurs or you decide to consolidate your debt, you may think that by turning to abusive payday lenders, it is difficult to qualify for a personal loan. This is not true in most circumstances.

If your credit is not in good form, personal credit options can be limited more, but that does not mean you have no options. Some lenders may be willing to offer you an individual loan even if you have a poor credit rating.

Get Personal Loan with Low Cibil Score

Look out for a trusted NBFC

If your score is poor, you do not have to worry about a host of NBFCs that are ready to offer you this uncertain loan facility. Yeah, these non-banking financial companies give these applicants a loan but usually at a higher interest rate. Well, ultimately this increases the burden of your loan repayment, but on the other hand you can satisfy your varied needs as you get your loan.

Add a Co-Candidate

Your poor credit score does not stop you from using a personal loan, since you can apply with a co-applicant for the credit facility. If a co-applicant has a good ranking, you are more likely to get this loan. Of course, you would need to request a full KYC procedure from the other applicant in advance. You must also check with your lender whether or not your lender agrees with the same clause. In general, many lenders agree, but double checking is advisable.

Apply for your new loan

You can request a personal loan if you are a trustworthy client, a person who has maintained the good terms with the bank. Even if your score is poor, banks typically don’t want to risk their current customers so it might work for you to ask for it. It is more likely that you will get the loan at higher interest rates, or that your bank will put some other conditions before you.

Show that your income is sufficient to repay

If someone earns a good income or has an additional income source, a lender can consider your personal loan request even at a low score. With good income, you can easily repay your loan in the future, which, of course, will be looked after by many lenders before they offer the loan. Besides a steady income, creditors are more likely to grant you a personal loan, despite a low cibil score, if you have a stable job.

Mind before you receive a bad credit loan

Before you decide to use a bad credit loan, make sure that you take into account the following points:

Do the right research and explore the advantages of different lenders. Select a lender with lower interest rates.

Check your eligibility before applying for a bad credit loan to ensure that your loan application is not rejected, as it could further harm your credit score.

Go thoroughly through the terms and conditions on bad loans so that no surprises will come later.

Before you choose to apply for a bad credit loan, evaluate your repayment capacity.

How to increase your chances of a bad loan?

Prove that you can reimburse EMIs

Despite the low credit score, lenders can give you a loan if your earnings have increased. Therefore, if you can inform the loaner that your earnings have increased and that you can afford to pay the EMIs, they will be able to offer you a loan.

Provide collateral

Providing collateral increases your chances of securing a loan as the lending risk decreases. Lenders are confident that they can offer you a loan, as in the case of defaults, to sell / auction the collateral for the loan remaining.

Poor Credit Loan Offer

If you have a poor credit score, it will help you get plenty of credit. If a collateral reduces your lending risk, you can negotiate with the lenders to offer lower interest rates. Such loans against collateral / security are known as guaranteed loans.

If you have no guarantee and are looking for unsecured credits, however, you can get a loan if you have a higher monthly earnings and work for a reputable company. In such cases, banks will charge you higher interest rates and you are likely to receive lower loan amounts. For instance, if your eligibility for loans under normal conditions is around 80 to 90 percent, it would be 65 to 70 percent due to your bad credit score. There is also a possibility that shorter repayment tenures will be given as banks will look to obtain the loan as soon as possible.

In addition to the banks, two other choices can be sought if you have a low credit score and want to use an individual loan-

Non-Banking Financial Companies (NBFCs)

There are many NBFCs that provide a personal loan despite a low credit, but can charge you an interest rate slightly higher. NBFCs are typically more competitive than banks in credit ratings. Some NBFCs have credit loans that are as low as 360.

Peer-to – Peer Lending (P2P)

Lending sites called P2P websites offer up to Rs.5 lakh loans for people with low-credit rates ranging from 12 months to 60 months.

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