How to Get a Personal Loan with a Low CIBIL Score | ICICI Bank
Personal Loans are convenient financial options available to borrowers who need additional money to meet personal expenses. These Loans come with no end-use restrictions, meaning they can be used for many purposes such as holidays, medical expenses, higher education funding, wedding expenses etc.
However, Personal Loans require borrowers to fulfill eligibility criteria. When it comes to applying, your CIBIL score plays a major role in determining your eligibility. A CIBIL score is a three-digit number that summarises your credit history and helps lenders assess your creditworthiness and how likely you are to repay the money you borrow. There are no special categories of Personal Loans for low CIBIL score borrowers. If you have one, it can be tougher to get a Loan. However, there are ways you can improve your chances of a Personal Loan approval with ICICI Bank. In this blog, we will explore how you can get a Personal Loan with a low CIBIL score and what you can do to improve on it. Read on!!
Understanding your CIBIL Score:
Before we dive into the tips, let's first understand what a CIBIL score is and how it affects your eligibility for a Personal Loan Requirement. A CIBIL score is a quantifying scale that ranges from 300 to 900. The higher the score, the better your creditworthiness. A score of 750 or above is generally considered good, while a score below 600 is considered poor.
All legitimate lending companies use your CIBIL score to determine whether you're a risky borrower or not. If your CIBIL score is low, a majority of lenders may hesitate to approve your loan application. If they do so, they’re likely to charge you a higher interest rate compared to those with a higher CIBIL score. Instead of applying for a loan with a low credit score, try to improve your CIBIL before applying.
The table below will give a better idea of a good and a bad credit score.
|Credit score||Is it good or bad?||Chances of approval|
|Less than 600||Very bad||Extremely low|
|Over 750||Very good||Extremely high|
Tips to get a Personal Loan with a Low CIBIL score:
Securing a Personal Loan from ICICI Bank with a low CIBIL score may require meeting certain eligibility criteria, including a minimum CIBIL score of 700. However, there are steps you can take to enhance your chances of approval, even if your credit score is lower.
1. Check your CIBIL score:
The first step is to check your CIBIL score and ensure that it meets ICICI Bank's minimum eligibility criteria. If your score is below 700, focus on improving your score before applying for a Personal Loan with us.
2. Provide Collateral:
If you have a low CIBIL score, ICICI Bank may be willing to approve your Personal Loan application if you provide collateral. By providing collateral, you're essentially reducing the risk we’ll be taking on, which can improve your chances of approval
3. Build a Relationship with ICICI Bank:
It can be useful, if you have an existing relationship with ICICI Bank, such as a Savings Account or a Credit Card. Bank representatives may be more willing to consider your Personal Loan application despite your low CIBIL score
4. Apply for a small Loan amount:
If you have a low CIBIL score, apply for a small Personal Loan amount. By borrowing a small amount, you can first demonstrate your ability to repay the loan and improve your credit score over time.
Tips to improve your CIBIL SCORE.
Getting a Personal Loan with a low credit score can be challenging. Here are a few things you can do to improve your CIBIL score, along with your chances of getting a Personal Loan from ICICI Bank.
To improve a low CIBIL score, you can:
1. Check your Credit Report:
The first step is to check your credit report to ensure that all the information is accurate. Sometimes, there can be minor errors that may be affecting your score. If you find any errors or inconsistencies, you should raise a dispute with the credit bureau and get them corrected as soon as possible.
2. Pay your bills on time:
Late payments can greatly impact your CIBIL score, negatively. Make sure you pay your credit card bills, loan EMIs, and all other bills on time. Late payments can reflect on your credit report for up to seven years and certainly lower your credit score.
3. Keep your Credit Utilisation low:
Your credit utilisation ratio is the amount of credit you're using compared to your total credit limit. Ideally, you should keep your credit utilisation below 30% to avoid a negative impact on your credit score.
4. Don't apply for too many Loans:
Variety is nice but not when it comes to a loan application. Applying for multiple Loans or Credit Cards within a short time can hurt your CIBIL score. Each time you apply for credit, it results in a hard inquiry, which can lower your score.
Getting a Personal Loan with a low CIBIL score can and will come with a series of obstacles, but it is not impossible. Following the above tips, you can improve your CIBIL score and your chances of Loan approval with ICICI Bank. Ideally, try and improve your CIBIL score, not just for a Loan with us, but for any credit-related transactions in general. This will take some time, but worth it in the long run.
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