Personal Loans for Low Credit Score

How to get a Personal Loan with a CIBIL score of 550?

Personal loans are one of the easiest loans to acquire. They are unsecured loans, which means one does not need to offer collateral. They can be used for a multitude of purposes. There is minimal documentation involved and a relatively shorter processing time as well. However, one of the most important considerations when you apply for a personal loan is your CIBIL score.

CIBIL Score for Personal Loans

CIBIL score is a credit score provided by CIBIL, which is one of India’s leading credit information companies. The score reflects a person’s credit history based on their financial behaviour. It includes loans and repayments, credit card payments, and more. The score ranges between 300 and 900; the higher the score, the healthier the credit history is.

A lower credit score can hurt your chances of being approved for a credit card, home loan, and other products. Usually, a credit score of 750 or more is considered excellent. People with a score over 750 can expect better approvals for financial services like loans. A score over 700 is decent while getting a personal loan for a CIBIL score of 550 or lower can be difficult.

The table below will give a better idea of a good and a bad credit score.

Personal Loans with Lower CIBIL Score

Since personal loans are versatile and easier to acquire, people use them for many reasons, including buying a vehicle or remodelling the house, getting married, and repay their other loans.

While a low CIBIL score would reduce the chances of getting approved for a personal loan, it is not impossible. Other factors that affect your chances of getting a loan include your status of employment, income, and credit report. The report is a more detailed account of your financial history. A clean report suggests that you practice healthy financial habits and are not a risky candidate.

If you want a personal loan for a CIBIL score of 550 or above, you can get it by fulfilling a few parameters:

Calculate your needs

Do not apply for a personal loan with a low CIBIL score if there is no need. You can use the IDFC FIRST Bank personal loan EMI calculator to get a better picture of how long will be required to pay EMIs at different interest rates. Based on these calculations, you can start your loan application process online. You can also reach out to IDFC FIRST Bank customer care on 1800 10 888 for more information on the Personal Loan application process.

Ensure all your documents are in place

Personal loans require minimum documentation, so you only need to gather all the right stuff and ensure it is per requirements. It includes your proof of identity and residence, salary account bank statement for the past three months, and salary slips for the past three months.

Research before you apply

A select few banks or financial institutions may be willing to offer a instant personal loan for a CIBIL score of 550 or close to that. Find these banks and apply to only a select few. Applying to multiple places does not reflect well on your credit report.

Once you secure a loan, ensure you use it responsibly. If you are using it to consolidate and pay off your previous loans, ensure that you are doing so in the right manner.

Furthermore, remember to pay your personal loan instalments in full, and on time. Ensure that your loan amount is paid back in full within the decided duration. Also, do not try to get any other loan before you have paid off your personal loan in full.

Loan repayment done responsibly should, in part, help in rebuilding your credit score. From here, you can make better financial decisions to build better a better score.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.