Getting a Personal Loan can be a nightmare if you lack a good credit score. But there are other ways you can build up a convincing financial report card and get that Personal Loan disbursed.

Personal Loans are unsecured loans that are quickly disbursed without the need for providing a collateral or getting a guarantor. Not only this, Personal Loans are disbursed with minimal documentation and if you have a high credit score, your loan could be credited to your bank account sooner than you had expected. But what if lenders are hesitant to advance you money if your credit score is low? A low credit or CIBIL rating considerably lowers your chances of getting a Personal Loan. The situation may seem hopeless for newbie borrowers but there are ways to get around it.

What Is A Credit Or CIBIL Score?

A credit score indicates how well an individual has cleared his debts in the past. This is arrived at by taking into account a number of factors including but not limited to one’s repayment history, number of recent loans taken or applied for and the amount owed to lenders. Since Personal Loans are unsecured, banks and other lenders scrutinize their borrowers thoroughly by doing a background check to see if they’re capable of repaying the loan. A CIBIL score helps them to make that judgement. The CIBIL Score is a number in the low to high range of 300 to 900. A borrower ends up with a bad CIBIL score if he or she defaults in making any of the repayments, makes late payments, gets loan applications rejected frequently, piles up huge credit card debt or has no credit history.

Read Blog: How Much CIBIL Score is Required to Get a Personal Loan.

Why It Is No Longer The Only Criterion

Just because you have a poor CIBIL score, that doesn’t necessarily mean that you cannot get a Personal Loan. The CIBIL score is no longer the only criterion that the lenders use to decide whether to let you have that Personal Loan or not. Lending institutions such as non-banking financial institutions (NBFCs) know that a credit or CIBIL score does not paint a complete picture of your credit worthiness. They look at many other sources such as your net salary, your job stability, your saving habits, utility and mobile bills, educational qualifications, area you reside in, which assets you have invested in and so forth. This does not lower the importance of having a good CIBIL score, but it does give a more rounded picture of the credit profile of borrowers like you.

How A Financial Plan Will Help?

Whether you have a reasonably good CIBIL score or do not have one at all, it is crucial to have a well-drawn out plan where you are able to manage your finances to the last paisa. If you are not sure of doing this yourself, consult a financial advisor. Talking to friends and relatives can also help. A sound financial plan will see to it that you meet all your financial obligations on time and that you are in a position to clear all your outstanding debts. With a workable fiscal plan, not only will your credit score stabilize, you will even see it gradually improve.

Other Options For A Personal Loan

If you want a Personal Loan urgently, a bad credit history will most likely lower your chances of getting it unless you appear convincing on the other criteria lending institutions use to provide you a Personal Loan such as monthly income, spending capacity, income from assets like a property on rent, etc. You also take a Personal Loan under your spouse’s name.

Related Blog: Why a Bad Personal Credit Score Can Hinder Your business.

If you are looking for a Personal Loan to meet your expenses, opt for Bajaj Finserv’s fast and speedy Personal Loans for up to Rs.25 lakh. Not only do they promise instant approval, but also disburse the loan in 72 hours to your account.

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