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    Personal Loan for Low Cibil Score

    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.

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    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.

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    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
      "Helpful website"
      0.5 4.0/5 "Great!"
      Bankbazaar only helped me to get the loan. The people who are working there called me everyday and followed up the process. They used to update the status of the loan from their end. I also called them after i got the loan. I have got so many mails from the bankbazaar people from that i have clicked the link which is sent on the mail.
      Was this review helpful? 0
      , durgapur
      Reviewed on Jun 21, 2018
    • Fullerton Personal Loan
      "Better try with some other banks"
      0.5 3.0/5 "Satisfactory"
      Fullerton interest rates are too high. They have lots of verification process for that they have delayed the loan 20 days. Actually i have taken a loan of 1 lakhs but i have to pay 2.16 lakhs. For 60 months i have to pay 1 lakhs extra there must be a lots of hidden charges. They did not inform anything previously. Since I'm in need of money i have taken the money from them.
      Was this review helpful? 0
      , durgapur
      Reviewed on Jun 21, 2018
    • Bank Bazaar Personal Loan
      "Good Website"
      0.5 5.0/5 "Blown Away!"
      The site is really helpful and customer service is very helpful. The facilitator of financial products. Everything is available in bankbazaar. Nothing to be improved. When i check for personal loan or any other products its very easy to apply. I can directly apply through bankbazaar. Paperless approval is there which is very helpful. I've been using this site for the last 2 years.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 21, 2018
    • Tata capital Personal Loan
      "Everything went well. "
      0.5 5.0/5 "Blown Away!"
      They have taken care extra care to disburse the loan. After the loan also the service good. They worked in a weekend also and the manager was very much helpful. There was no disturbance while taking the loan. I'm satisfied with the TATA Capital. I have applied of Rs. 2 lakhs the have offered me a interest rate of 10%. The processing is reasonable. I got the loan earliest what ever they have committed. They are very professional people.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 21, 2018
    • YES Bank Personal Loan
      "ROI is high"
      0.5 4.0/5 "Great!"
      Interms of ROI is too high compared other banks. I found the customer care service which was helpful. I have applied around 5 lakhs how ever i they have approved the same. I already paid around 1.3 lakhs. I'm paying the EMI amount of 11400 every month through ECS. I have opted the loan for 5 years.
      Was this review helpful? 0
      , gurgaon
      Reviewed on Jun 21, 2018
    • Bank Bazaar Personal Loan
      "Good Website"
      0.5 5.0/5 "Blown Away!"
      I applied a personal loan through bankbazaar.com and I'm not a regular user of bankbazaar. Whenever I need any financial assistance I always come to this site. I never downloaded the bankbazaar mobile application. Overall, I'm satisfied with their customer care services.
      Was this review helpful? 0
      , gurgaon
      Reviewed on Jun 21, 2018
    • HDFC Bank Personal Loan
      "Affordable"
      0.5 5.0/5 "Blown Away!"
      The documentation process was smooth anyway it can be improved. The person came to my place and collected all my documentation. Basically i was applied was around 3.75 lakhs however i have got only 50 K. I have applied from Bank to Bank transfer. The interest rate was nominal and affordable. I used to pay the EMI of 1400.
      Was this review helpful? 0
      , gurgaon
      Reviewed on Jun 21, 2018
    • HDFC Bank Personal Loan
      "Human error in HDFC"
      0.5 3.0/5 "Satisfactory"
      They previous intimated about the charges. I would say this is one of the worst experience i have ever had. The application was very much confusion. The EMI amount also confused. Their were confusion 0.5 paise n the EMI. They have asked me to give the other cheque. I was asking the bank people to send the person but it did not happened. They have a cut off period before that i have to take the loan otherwise the EMI will get start for the same month itself. After the several follow up i have got my loan with the extra interest rate.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 21, 2018
    • Bank Bazaar Personal Loan
      "Awesome service from Bankbazaar"
      0.5 5.0/5 "Blown Away!"
      They were supporting a lot in this over all loan process. They helped me a lot as soon as possible. They were finding the best bank which is having a low interest rate and processing for me. Sometimes i have seen the advertisement on Television and online like Bankbazaar helps you to get a personal loan and credit card. I am very much satisfied with the service provided by bankbazaar.com
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 21, 2018
    • HDFC Bank Personal Loan
      "Awesome Experience"
      0.5 5.0/5 "Blown Away!"
      I have got the loan on time. The documentation process was smooth. I have applied the amount of Rs. 4 lakhs in the deducted of processing charges. After the deduction 3.84 lakhs. I'm paying the EMI of 11.600. I have taken a tenure period 48 months. I don't find any difficulties while taking the loan.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 21, 2018
    • Bajaj Finserv Personal Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I took a loan from the Bajaj Finserv for 60000, The interest rate is high when comparing with other financial institutions, Application was easy. I got the loan with in 2-3 days. Overall it has been a good experience with the Bajaj Finance. They should keep their interest rate in par with other banks in the market.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jun 21, 2018
    • HDFC Bank Personal Loan
      "Very Good Service"
      0.5 5.0/5 "Blown Away!"
      I have taken this loan almost six months back and it has been a very good experience with them. The interest rate with them had been good as well as the loan amount had been satisfactory. Even the process in getting the loan had been easy and simple. There has not been any issues so far.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 21, 2018
    • IIFL Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a very good loan experience with them and the process in getting the loan has been simple and easy. The interest rate which they had charged had been nominal and the loan amount which they had provided had been satisfactory. There has not been any kind of issues faced with their services so far.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 21, 2018
    • HDFC Bank Personal Loan
      "Good Interest rates"
      0.5 4.0/5 "Great!"
      Its been easy apply for a personal loan in HDFC. I have submitted the documents of 3 months salary slip, PAN card, Aadhar Card, 3 photocopies, Company ID Card and bank statement. Within 15 day i have got the loan. I have applied the amount of Rs. 2.50 lakhs in HDFC Bank for that they gave me interest rate of 13.99%. They charged me a processing fee around 3 K.
      Was this review helpful? 0
      , kochi
      Reviewed on Jun 21, 2018
    • Axis Bank Personal Loan
      "Easy to take personal loan"
      0.5 4.0/5 "Great!"
      First of all i have started applied the personal with Axis. I have applied a loan amount of 1.20 lakhs and i have received 1.13 rest of the amount they have taken for processing fee. I paid the EMI of 3456 anyway i will pay the EMI through auto deduction. I have not received the loan time. In Axis bank, they are changing 17.99% as interest rate.
      Was this review helpful? 0
      , kochi
      Reviewed on Jun 21, 2018
    • Bank Bazaar Personal Loan
      "Good Website"
      0.5 4.5/5 "Excellent!"
      I have started using this bankbazaar.com for 3 years and i will proudly say about it. Since i have not yet used the app also the website is more comfortable for me in desktop. The customer acre executive who helped me a lot to choose the best bank.
      Was this review helpful? 0
      , kochi
      Reviewed on Jun 21, 2018
    • Kotak Personal Loan
      "Good Top up Plan"
      0.5 4.5/5 "Excellent!"
      I have applied the loan top up with the Kotak Mahindra bank for my existing loan with other bank. I have to pay the EMI of Rs. 4995 every month. I will pay easily by using the net banking. They are charging me a interest rate of 10.99%. The customer care service is prompt.
      Was this review helpful? 0
      , kochi
      Reviewed on Jun 21, 2018
    • Canara Bank Personal Loan
      "Average Service"
      0.5 3.0/5 "Satisfactory"
      I took a personal loan from the Canara bank for 3.5 lacs, I got the loan amount with in 10 days. Some personals willing to help and sometimes some staff will not respond properly. On some instances I the experience was good but some clerks are not willing to help.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 21, 2018
    • Bank Bazaar Personal Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken my credit card via BANK BAZAAR . The customer service and responses was up to the mark. The mobile application was very user friendly understandable. I have not faced any inconvenience with the service here so I would like to recommend to others.
      Was this review helpful? 0
      , ranchi
      Reviewed on Jun 21, 2018
    • ICICI Bank Personal Loan
      "Good service"
      0.5 3.5/5 "Pretty good"
      My personal loan was taken with ICICI Bank. The loan amount was 4 lakhs and the interest rate was satisfactory .The tenure period was 4 years . The customer service and responses was up to the mark. The process was a bit slow here and they have taken some time but the processing fee was very much nominal.
      Was this review helpful? 0
      , ranchi
      Reviewed on Jun 21, 2018
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