If you’re in need of quick cash but don’t have a good credit score, you might be feeling hopeless. After all, most lenders use CIBIL scores to determine loan eligibility and interest rates. But don’t worry, there are still options available to you! In fact, you might be surprised to learn that you can get an instant personal loan without CIBIL score.
In this article, we’ll guide you through the process of getting a loan without a credit score. Whether you’ve never availed of a credit facility before or have a poor CIBIL score, we’ve got you covered. We’ll show you how to obtain an instant loan without relying on your credit score, so you can get the financial assistance you need. So, let’s dive in and explore how it’s done.
Obtaining a Personal Loan Without a CIBIL Score
#1 Choose Collateral-based Loans
Instant or personal loans can be obtained without any collateral or security, but only if the borrower has a good credit score. However, if a borrower lacks a good credit score, secured loans are available where collateral such as property, jewellery, shares, or fixed deposits can be pledged as security.
With collateral in place, lenders are more likely to offer instant loans. Borrowers must select a lender based on the terms, interest rate, and tenure that are best suited for them. It is crucial to pay the EMIs on time every month, as failure to do so can result in the lender seizing the pledged assets to recover the outstanding loan amount.
#2 Find a Guarantor
One of the ways to obtain a loan without a credit score is to find a guarantor. The guarantor could be a family member, friend, colleague, or confidante with a good credit score, which would help ensure that the applicant’s loan is approved without much difficulty. However, finding a guarantor may not be feasible for everyone, as it depends on the applicant’s reputation and level of trustworthiness. Nonetheless, if a borrower can find a reliable guarantor, it could help them obtain a loan despite lacking a credit score.
#3 Try opting for a Joint Loan
Another way to secure a loan despite having a low CIBIL score is by taking a joint loan with a spouse who has a good credit score (above 750). In this case, the CIBIL score of both the husband and wife will be taken into account, increasing the likelihood of loan approval at the best interest rate available. However, joint loans are typically applicable for home loans. For instant personal loans, borrowers can ask their spouse or relatives with above-average credit scores to take out a loan for them, which they can repay at their convenience. This option may be a feasible solution for those struggling to obtain loans on their own.
#4 Prove Your Creditworthiness
Individuals who have not borrowed before or have a limited credit history due to infrequent credit card usage may face difficulty in obtaining loans. However, if the borrower can demonstrate a stable and consistent source of income through salary slips and bank statements, lenders may overlook the lack of credit history.
Once lenders are confident about the borrower’s ability to repay the loan on time each month, their creditworthiness will be established, making it easier to obtain loans in the future. Therefore, a steady income and timely payment of EMIs can play a significant role in establishing creditworthiness, even in the absence of a robust credit history.
#5 Apply for a Lower Amount
If a borrower has a low CIBIL score, it is wise to avoid applying for a high loan amount as it may raise concerns about their creditworthiness, resulting in the loan application being rejected. Therefore, it is best to apply for a lower personal loan amount as the interest rates charged on the loan will be lower, increasing the likelihood of loan approval.
By borrowing a smaller amount, the borrower can demonstrate their ability to repay the loan on time, which will eventually help improve their credit score. Hence, it is important to apply for a loan amount that is feasible to repay, especially when dealing with a low credit score.
#6 Obtain a History not Available (NA) or No History (NH) on the Credit Report
When a credit report displays History not Available (NA) or No History (NH), it indicates that the borrower has no previous credit activity and no credit in the last 36 months. However, borrowers can still approach lenders and explain their credit inactivity, and lenders will likely consider their unique situation. In these cases, borrowers may be offered a personal loan, but at a slightly higher rate of interest.
It is important to remember that lenders will still evaluate the borrower’s ability to repay the loan on time, even if they have no credit history. Therefore, having a stable source of income and providing relevant income proof such as salary slips and bank statements can strengthen the borrower’s loan application.
#7 Approach Non-banking Finance Companies (NBFCs)
When it comes to borrowing, traditional lenders such as banks may be hesitant to lend to borrowers without a proper credit history. In such cases, Non-Banking Financial Companies (NBFCs) can be a good alternative. NBFCs are more likely to offer loans to those in higher-risk categories, but it comes with a catch.
Borrowers will be charged a higher rate of interest to compensate for the increased risk. However, NBFCs offer quick loan approval and disbursement processes, making them a viable option for those in need of immediate cash. So, it’s always a good idea to compare the interest rates and repayment terms offered by different lenders before applying for a loan.
Final Thoughts
Personal loans can be the perfect solution for individuals who need money to cover unexpected expenses or take advantage of business opportunities. With careful consideration and a little research, you can find the right loan provider to meet your specific needs. Ultimately, don’t let your lack of a CIBIL score prevent you from getting the funding you need. If you’re looking for quick cash solutions, a personal loan is definitely an option worth exploring.
