When applying for a personal loan, the CIBIL score is the first thing that lenders tend to check. A good CIBIL score even acts to satisfy the eligibility criteria of an applicant when they apply for a personal loan without salary proof or a salary slip. It goes without saying that the CIBIL score is quite important for anyone looking for financial aid. The CIBIL score defines the creditworthiness of an individual, especially when applying for a personal loan, which is an unsecured loan. However, with more and more financial institutions offering new schemes and offers to make financial services more accessible for people, getting an instant loan without the CIBIL score is also possible today.
What is the CIBIL Score?
For any loan without collateral, a CIBIL check is done to determine an applicant’s eligibility. The CIBIL score or credit score is a three-digit numerical summary of an individual’s or business entity’s creditworthiness. This score is maintained by the Credit Information Bureau (India) Limited and is used to assess whether the borrower will be able to repay the loan amount in due time. All banks and financial institutions share their credit data with CIBIL, on the basis of which this score is calculated. An applicant applying for a personal loan without income proof, or a salary slip can also get approval based on their CIBIL score. But the question arises – can you get personal loans with a low CIBIL score?
What Does Having a Low or No CIBIL Score Signify?
The CIBIL score ranges from 300 -900 and anything below 750 is generally considered to be a low CIBIL score. As personal loans are unsecured loans that do not require collateral in return, they signify a greater risk for the lender. However, a good credit score shows a history of timely payments and is a testament to the creditworthiness of the individual. This does not mean that it is not possible to get a long or short-term loan without the CIBIL score. You can apply for a loan without a good CIBIL score; even if you have no credit history or no proof of income, or both, there are some options that you can consider:
A Low Credit Score and No Income Proof: Improve Your Score
The CIBIL score is dynamic, and changes based on the latest credit information and debt repayment status of an individual. This means that you can work on improving your credit score before you apply for a loan. Six months of paying your bills and EMIs on time can make quite a difference toyour credit score. Having various types of loans on your name, low credit utilisation rate (for your credit card), maintaining old credit accounts, etc. are some other factors that can improve your CIBIL score. Once your scores have improved, you can apply for a personal loan without a salary slip being required, on the basis of your score.
Having Income Proof but No/Bad Credit Score: Get a Loan Based on Income
For people who are taking their first loan, it goes without saying that they may not have a credit history. It is possible to get a personal loan without the CIBIL at a good rate of interest if you are able to furnish proof of a steady income. In such applications for a personal loan without the CIBIL, the lender may at times have certain eligibility requirements, like having an income above a set limit, having been employed at the same company for a certain period of time, etc. For an instant loan without the CIBIL score, your eligibility will depend on your income.
Low Eligibility: Accept a Higher Interest Rate
It can get a tad difficult to get a personal loan without both CIBIL and income proof checks, but not impossible. Generally, if a person is unable to qualify based on a CIBIL or income check, the lender may ask for a higher interest rate as compared to others. Based on the loan tenure and your repayment capabilities, you can choose to accept the higher rate and get a loan without CIBIL or income checks. You will however need to look around for a lender with flexible eligibility criteria for the same.
No/Bad Credit Score and No Income Proof
If you don’t have a credit history or are in immediate need of funds and cannot take the time to improve your score or do not have proof of income, there are several options for you as well:
Opt for a Joint Loan
You can apply for a joint loan without a CIBIL score if your spouse has a good score. When one applies for a joint loan, the CIBIL score of both applicants is taken into consideration. Another option to avail a loan without a CIBIL score is to take it in your spouse’s name. This way, you will also be able to get bigger loans like a home loan without a good CIBIL score at the best interest rates.
Find a Guarantor
If you are having trouble getting a long or short-term loan without a CIBIL score owing to not having any credit history, you can ask your immediate family, like your parents or your sibling, to act as guarantor for the loan. You however will need to ensure that the person who acts as guarantor has a good score. This is the most common way in which people apply for an education or personal loan without a CIBIL history.
Consider Putting up Collateral
The main feature of a personal loan is that there are no limitations on the end use of the money. One no credit check payday loans Elizabethton TN of the best ways to get a personal loan without a CIBIL and income proof is to offer the lender collateral in lieu of the money. In India, gold is the most common collateral put up by applicants to avail an instant loan without CIBIL checks. Gold loans have become very common these days and as the money can be used for any purpose, more and more people are opting for this type of instant loan. Without the CIBIL score, the collateral acts as security to offset the risk of default for the lender. Depending on your need, you can put up any asset like land, a vehicle (not already hypothecated under a separate loan), gold, etc. The value of the asset will be ascertained by the lender and the maximum loan amount (which will be slightly less than the market value of the asset) that you are eligible for will be calculated.
Even without a CIBIL score, a loan does not have to be impossible to get. With so many schemes and offers available in the market today, borrowers have many options for getting a loan without a CIBIL score check. So, if you are looking for a loan without a CIBIL score or income proofs, put in some time and look around to find the best option.