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  • Personal Loan for Low Cibil Score is Rated as "Great!" by 97304 Users

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    Personal Loan for Low Cibil Score

    When you apply for a loan, the lender, lets say the bank, will need to know that you are worthy of receiving that loan. This worthiness has nothing to do with a charming personality, what it actually means is that banks need to know how good you are with your finances which tells them if you will repay the loan in a timely fashion and without missing payments.

    The way bank and other financial institutions can know your credit worthiness is through your CIBIL (Credit Information Bureau Limited) score. It a number that is associated with you and tells the bank how responsible you are with your loans and credit cards. The CIBIL score is one of the prime parameters used to determine the approval of a loan. The CIBIL score was Indias first ever credit rating system and is recognised by all the banks as an authority on an individuals credit rating.

    How does CIBIL Score work?

    How the CIBIL score system works is similar to the credit score systems found in many countries. You are assigned a score, a number, between 300 and 900. The number that you get is a result of the information that the banks forward to CBIL. This information is a collection of your repayments of Personal Loans, home loans, vehicle loans and credit cards. If all your payments are made on time then you can hope to have a good score.

    If you skip payments or fail to pay the credit back in time, it could lower your credit rating which would, over time, would make it difficult for you to get approved for a loan. CIBIL is also going to include utility bill payments which means that your score could improve or deteriorate depending on when you pay your phone, electricity or water bills.

    What factors lower CIBIL Score?

    Since CBIL scores are supposed to be an indicator of your financial habits, the score changes based on how you handle your loans and credit cards. These are some of the factors that can have a negative effect on your CIBIL score.

    • Personal loans

      Since personal loans are unsecured loans, taking too many personal loans can cause your credit score to fall.

    • Missing loan instalments

      If you miss an instalment on your loan then it may be viewed as poor financial planning which means that your credit rating will suffer making it difficult for you to secure loans in the future.

    • Coming too close to the limit on credit cards

      If you are too close to the limit of your credit cards too often, it too points at constant debt and an inability to manage money wisely leading to a reduction of your CIBIL score.

    • Not paying credit cards back on time

      Just like the EMI for your loans, if you fail to pay your credit card dues on time, they too can have a negative effect on your credit history.

    • Not paying credit cards in full

      You might think that paying just the minimum due on the card or slightly more than that is enough to keep things under control but it's not. While the banks may not be overly concerned that you have an outstanding balance, CBIL on the other hand takes it as a negative sign. For CIBIL, outstanding balance are not a good thing and tend to lower your scores.

    • Not having any credit at all

      It may sound like a good place to be in if you don't have any loans or credit cards at all when in fact it is not. This is so because not having a credit history means that your credit score is 0 by default which means that if you were to apply for a loan or a credit card, the chances of it getting reject are higher.

    • Too many rejected applications for loans/credit cards

      If you apply for a loan or a credit card and your application is rejected, you tend to apply with another bank, and another and so on. Such practices reduce your score for two reasons. The first is that CIBIL takes constant rejects to be a bad sign and secondly because every time a bank requests CIBIL for your credit information, your credit scores come down.

    • Settling credit cards

      If you have settled credit cards, that is, if you have negotiated with the bank and closed a credit card after paying an amount lesser than what was due on the card, then your credit history will receive a red flag that could cause trouble later.

    How CIBIL scores affect eligibility for loans

    While banks may not tell you what CIBIL score makes you a perfect candidate for a personal loan, they do say that your credit score will play a part in the approval of your application for a loan. If your score is below a certain number then chances are that you may not be approved for a loan.

    Even if you are approved, the interest rates offered to you may be higher than those offered to someone with a good score. While most banks in India may be vary of providing loans if credit scores are low, there are private finance companies that may offer personal loans for low CIBIL scores.

    What is a personal loan?

    A personal loan is a loan that you can take to cover any emergent expenses like unexpected bills or paying for things like an expensive vacation. The idea of the personal loan is to ensure that you have the funds you need in case of an emergency. The defining features of this loan are that it is unsecured and can be used for anything. Unlike vehicle and home loans, there is no restriction on what you do with the money you get.

    Features of personal loans

    There are lots of features that serve to make personal loans very attractive to people looking for quick and easy financing options.

    • Personal loans can be taken up to the tune of Rs. 30 lakhs and paid back over a period of 6 months to 5 years.
    • They require minimal documentation as compared to home loans or vehicle loans.
    • They also come with no restrictions on how you use the money from the loans.
    • A personal loan can be applied for, approved and dispersed in as little as 24 hours depending on the bank or NBFC (Non-Banking Financial Company) you approach.
    • They can be paid back via post-dated cheques, ECS or auto debit facilities provided by banks.
    • They also don't need for you to have any collateral to secure the loan.
    • You can go in for a prepayment and pay the loan back before its tenure is over however, prepayments may attract a fee.
    Interest rates for personal loans

    Unlike other loans, personal loans tend to be a bit more expensive since the interest rates charged on such loans are higher. Just like with any other loan, the specific interest rates for these loans will differ from one bank to another. The general range of the interest rate can be from 15% per annum to as high as 20% per annum depending on the bank.

    Eligibility criteria for personal loans

    Since these loans are only available to individuals they come with certain eligibility criteria which are:

    • You must be between the ages of 21 years and 60 years in order to apply for these loans. In the case of some banks the minimum and maximum ages might differ based on the bank's own rules.
    • You will also need to have a minimum specified net monthly income. This too changes from bank to bank and may also be affected by the city that you live in.
    • Some banks also have rules regarding the EMI which state that the ratio of your net monthly income and the EMI should not be greater than 50.
    • The loan is also available only to salaried or self-employed people.
    • With some banks you may be asked to provide a guarantor for the loan.
    Documents required

    Since personal loans are meant to be easy to acquire, the documentation for them is quite simple and includes the following documents.

    • Identity proof in the form of an aadhar card, driver's license, passports, etc.
    • You may also need to provide an address proof like a driver's licence, electricity or telephone bills. In the case of a driver's license which has your current address mentioned on it, you may be able submit that as both ID and address proof.
    • You might also have to submit your payslips as proof of income.

    How to improve your CIBIL score

    If you happen to have a CIBIL score that is not good then there is no reason to lose heart. There are things you can do to improve that score. Here are some tips that can help you improve your credit rating.

    • If you have credit cards with outstanding balances then you need to pay them back at the earliest possible because even if you pay the minimum due, it only gets the bank off you back, the remaining is still considered outstanding by CIBIL.
    • If your credit score is not good then try to keep the borrowing down to a minimum. Doing this will give you time to recover from your current debt without creating new debt.
    • Let's assume that you have cleared all your debt and decide that to celebrate your freedom from debt you will cancel all your credit cards, DON'T! If you cancel all your cards then you won't be able to create a credit history when you need one at a later stage.
    • If you don't have cards or loans that can help you create a credit history to get your score going, you can always go in for a Secured Loan like a vehicle loan. Sure you may not get the best interest rate on such a loan but at least you may get a loan that can help you jump start your credit history.
    • There are times when you move into a house and realise that because of the misdeeds of the person who stayed there before you, the address has been blacklisted. What you can do in this case is to inform CIBIL of the mistake and get it corrected.
    • As far as using your credit cards are concerned, make sure you don't come close to the limits of your cards too often. If you do then your score might deteriorate further.
    • In case you can't get a loan or a credit card to get the history going what you can do is to approach banks that provide credit cards against fixed deposits. The idea is that you open an FD with them and they will issue you a credit card that has a limit slightly lesser than your FD amount. This will get you into the credit system and get your credit history going.
    • In time, even utility bill payments are going to affect your CIBIL score so it's best to make a habit of making sure that ALL your bills are paid in full and on time.
    • If you are rejected for a loan or credit card once, don't keep applying for one at other banks. Take some time out to fix your score and then apply again.

    It may not be easy but it is possible to get a loan even if you have a poor credit history. All you have to do is to shop around a bit and talk to multiple banks about the possibility of extending you a personal loan with your CIBIL score. Just make sure that if you do get the loan, you pay it back on time and without any hassles so that your credit score doesn't take too many hits.

    Personal Loan for Low Cibil Score Reviews

    • Bank Bazaar Personal Loan
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      At the beginning i came to know about the Bank bazaar through the credit card score checking, i use the bank bazaar through both the website as well as the mobile application as it is user friendly to access. The customer support is responsive.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 14, 2018
    • HDFC Bank Personal Loan
      "GOOD"
      0.5 4.0/5 "Great!"
      There is no particular reason for taking the personal loan with the HDFC BANK but the process of applying the personal loan is simple ans easy to get the loan. The loan amount is satisfactory what they have offered added on that the rate of interest is with lower.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "USER FRIENDLY PORTAL"
      0.5 5.0/5 "Blown Away!"
      It is my first time experience with the Bank bazaar as i am using it through the website as the portal is easy and also it is user friendly to access. The customer support is very good with this with this portal and it is satisfactory to me. It is a good portal to use.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 14, 2018
    • IndusInd Bank Personal Loan
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      There is no particular reason for taking the personal loan with the INDUSIND BANK but the loan amount what they have offered is sufficient added on that they have offered the rate of interest is 12.5% with this personal loan. The process of getting the loan is simple and quick.
      Was this review helpful? 2
      , bangalore
      Reviewed on Dec 14, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      It has been a good experience with this loan and the loan got disbursed in a short period of time. There has not been any hassle faced with the banking services of them, even their customer support has been responsive has been helpful. There has not been any extra charges made by them.
      Was this review helpful? 2
      , kolkata
      Reviewed on Dec 14, 2018
    • SBI Personal Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      It had been a good experience with this loan experience with this loan and the whole process went smooth and simple. Within a short period of time they had given me this loan and there has not been any problem and there has not been any sort of additional charges which they had made.
      Was this review helpful? 3
      , kolkata
      Reviewed on Dec 14, 2018
    • HDFC Bank Personal Loan
      "Easy to get a loan"
      0.5 4.5/5 "Excellent!"
      They have processed the loan immediately. I have received the loan amount of Rs. 1.5 lakhs. I have received the loan on time. I'm happy about the interest rate since its a instant loan. There was no documentation has collected. Total tenure period of the loan is 2 years and I'm about to close it.
      Was this review helpful? 2
      , coimbatore
      Reviewed on Dec 14, 2018
    • review Personal Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      Its instant paperless approval personal loan which i got from Home credit financial service . As the rate of interest is satisfactory based on the market price. Their customer service is way good an response was quick .I have chosen the tenure period of1 years and there are nil processing fees.
      Was this review helpful? 1
      , ghaziabad
      Reviewed on Dec 14, 2018
    • review Personal Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      I have take personal loan from Bussan Auto finance which they approved in 1 day and the amount was reflected in next day and they followed instant approval process. As am satisfied with the rate of interest which they have given and i can make the payment monthly though ECS. There are nominal processing fees.
      Was this review helpful? 2
      , ghaziabad
      Reviewed on Dec 14, 2018
    • SBI Personal Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      My personal loan was taken with STATE BANK OF INDIA , and they provide nominal rate of interest and it is nominal in the market . The processing fee is nominal and tenure period is 5year . SO far it has been good experience with this bank . Loan amount is satisfactory .
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 14, 2018
    • Axis Bank Personal Loan
      "Very Good bank for personal loan"
      0.5 5.0/5 "Blown Away!"
      I bought my personal loan in the year of 2017. They have offered me a interest rate of 14.5% and the loan amount was Rs. 2.59 lakhs. There was some processing fee which is nominal according to the standard charges. Getting a loan from Axis bank is easy. There is a pre-closure and partial payment is available without any charges.
      Was this review helpful? 2
      , bangalore
      Reviewed on Dec 14, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a car loan with HDFC bank and my experience was good, the loan amount was based on my requirement and the rate of interest was nominal when compared to other banks. Customer service was good with this bank and the tenure period is 5 years for this loan.
      Was this review helpful? 2
      , coimbatore
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience so far with bankbazaar, they provide good services when compared to others in the market. Customer service was good with bankbazaar and they responded on time. The website of bankbazaar is easy to use and is user friendly.
      Was this review helpful? 1
      , coimbatore
      Reviewed on Dec 14, 2018
    • Early Salary Personal Loan
      "Looking for less interest rate"
      0.5 4.0/5 "Great!"
      My experience was good with Early salary for personal loan, the loan amount was for Rs 12000 with high interest rate when compared to others. Customer service was good and i received my loan amount on time. Tenure period for this loan is for 1 month.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I am using the services of bankbazaar from last 3-4 years, the services provided by bankbazaar is good when compared to others in the market. Customer service was good and they responded on time. Mobile app of bankbazaar is easy to navigate and user friendly to use.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 14, 2018
    • Incred Personal Loan
      "Not satisfied"
      0.5 2.0/5 "Expected more"
      I am not satisfied with the services provided by INCRED, the process was smooth and i received my loan amount within 7-10 days. I requested loan amount for Rs 2 lacs but they approved only for Rs 93000 and the rate of interest was high when compared to others. Customer service was not up to the mark with INCRED.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience so far with bankbazaar, they provide good services when compared to others in the market. Customer service was good with bankbazaar and they responded on time. The website of bankbazaar is easy to use and is user friendly.
      Was this review helpful? 1
      , ludhiana
      Reviewed on Dec 14, 2018
    • IndusInd Bank Personal Loan
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      It was not a good experience with Indusind bank for personal loan, the process took 10 days to complete. Customer support was not up to the mark with this bank and there was no proper response. Loan amount was or Rs 2 lacs with high interest rate and tenure period is 5 years.
      Was this review helpful? 2
      , ludhiana
      Reviewed on Dec 14, 2018
    • SBI Personal Loan
      "BETTER"
      0.5 5.0/5 "Blown Away!"
      The personal loan has been taken from the STATE BANK OF INDIA and i am satisfied with the services of this bank as i am using it from many years and the rate of interest what they have given is satisfactory with this bank. The duration to repay this loan is for 5 years.
      Was this review helpful? 1
      , new delhi
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I know bankbazaar.com from last 2 years, my experience was good so far with bankbazaar. Customer services provided by bankbazaar is good and their response was prompt. The website of bankbazaar is easy to use and is user friendly.
      Was this review helpful? 1
      , new delhi
      Reviewed on Dec 14, 2018
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