Can you get a personal loan with a credit score under 600? or How to get a personal loan with a credit score of less than 600? can you get a personal loan with a credit score under 550? let us dig deeper into these questions.
Credit score or CIBIL score is both the same in India When you have a bad credit score i.e less than 600, and urgently need a loan then it would be very hard for you to get a loan. In India, the average CIBIL score expected is 750, anything below it is considered as poor, and many of the banks won't be providing you with a loan or not even consider you to provide a loan. Most of us fall under this due to some kind of unfortunate circumstances. Don't worry there are ways to get to a personal loan. Let us discuss more in this article.
- Taking a secured loan
- Apply for an unsecured loan with a co-signer
- Approach a NBFC
- Make Use of P2P (Peer to Peer) lending platforms
- Chit funds
- Increase your CIBIL score
These are proven ways to get a personal loan with a less CIBIL score.
1. Taking a Secured loan
You can easily avail loan If you have collateral like a house, Mutual fund, Gold or any physical asset. Many banks would be willing to provide a loan with collateral as this is less risk for the banks and the rate of interest will also be very less. They will provide loan amounts based on the collateral's value. In this case, there is no use of the CIBIL score. The loan amount you will get would be depending on the worth of collateral you are putting up.
2. Apply for an unsecured loan with a co-signer
If you don't have collateral and still want a personal loan, you can always make use of your friends, who has a high credit score or if you are married, your spouse assuming she has a higher credit score. In this case, you will get loan amount depending on the co-signer's credit score and if you default on your loan payments he will be liable. The bank can take action on that cosigner.
You can always take help from your friends and family as they would be more sympathetic and know your current situation to provide you with a loan.
You can always take help from your friends and family as they would be more sympathetic and know your current situation to provide you with a loan.
3. Approach a NBFC
There are a few NBFC's in India that offer personal loans lower CIBIL score but the interest rates are high compared to many banks and the amount that they provide would vary. There are several NBFCs in India that offer personal loans like Cashbean, Indiabulls Dhani, Paysense and many more. But the main downside of these apps is that you cant decide on the loan amount, but the company allocates that amount.
If you have a good salary package then you can get a personal loan with less interest rate by keeping your salary as collateral you can obtain a loan. Companies like Bajaj Finserv extensively gives loans to salaried employees.
If you have a good salary package then you can get a personal loan with less interest rate by keeping your salary as collateral you can obtain a loan. Companies like Bajaj Finserv extensively gives loans to salaried employees.
4. Make Use of P2P (Peer to Peer) lending platforms
After the de-regulation of RBI, P2P lending has gained a lot of traction in India. P2P lending platforms connect individuals willing to borrow and individuals who are willing to lend their excess credit that they have. Interest rates are high as the lender is taking a lot of risk in providing to the borrower as his creditworthiness is less.
Interest rates usually start from 12% and there is no cap on the amount you wish to take unless you are willing to give more interest to the lender. In India, there are some popular P2P lending sites likes Lenden, Lendbox, i2ifunding, etc. You can utilize these.
Interest rates usually start from 12% and there is no cap on the amount you wish to take unless you are willing to give more interest to the lender. In India, there are some popular P2P lending sites likes Lenden, Lendbox, i2ifunding, etc. You can utilize these.
5. Chit funds
You heard it right, chit funds are one of the best options if you have time, With platforms like kyepot, It has become very easy to invest in chit funds online. You can invest for a couple months and then take a loan which is of lesser interest(Interest rates in chit funds is 10-15% lower). and pay off all your debts and slowly repay the loan from chit funds. This works best when having a little cash to invest in chits initially.6. Increase your CIBIL score
If there is no urgency to take a loan then you can utilize this option as this involves you put in the time to increase your credit score. A better credit score will give you lots of options to choose loans at a better interest rate. There are some proven ways to improve the cibil score, you can read in this "Ways to improve cibil score". Increasing your CIBIL score is the option most of us should choose for as this will your profile a much-needed boost, would help you in a better job as well.
I hope you find this information regarding "Can you get a personal loan with a credit score under 600?" is helpful. Feel free to share it with your friends and family if you find it helpful
