17 June 2021
A CIBIL score is one of the first measures a lender considers when you’re applying for a loan in India. This information helps the banks and lending institutions evaluate an individual’s creditworthiness and repayment ability while applying for a loan. So, does it mean that people without CIBIL scores aren’t eligible for a loan? Not at all. A borrower can avail of a loan despite having a low score or no CIBIL score.
The Credit Information Bureau (India) Limited (CIBIL) is the credit bureau that maintains records of companies and individuals’ credit-related activities, including credit cards and loans in India, specifying their CIBIL score.
A CIBIL Score is a three-digit numeric summary of an individual’s credit history that reflects his credit profile. It is solely based on past credit behavior, such as borrowing and repayment habits, as shared by banks and lenders with CIBIL regularly.
A person’s past behavior is taken as an indicator of his/her future actions, and hence the CIBIL Score showcases a consumer’s creditworthiness. A high CIBIL score enables cheaper and instant loan approval, while the low indicates vice versa. The CIBIL score ranges from 300 to 900 depending upon various factors like the repayment history, credit card utilization, the number of times applied for a loan, and loans for different purposes of the individual.
Generally, a score between 300 and 699 is considered a bad or low CIBIL score. Banks are unlikely to lend loans to such people, and even if they do, the interest is 0.5% to 2% higher. And if the Score falls below 700 (mainly due to defaults made in paying off the previous loans), the banks might refuse to offer any loan. For example, when a person applies for a credit card or loan, one of the critical factors lenders check is the person’s credit profile, as depicted by the CIBIL Score. Banks usually offer loans to individuals falling within the 750 to 900. But EarlySalary can lend you a loan even without it.
Applying for a loan without CIBIL score is quite tricky, but Earlysalary makes your work easy by providing loans to individuals even without a CIBIL or credit score.
1.Opt for Collateral Based Loans
Primarily, personal loans are collateral-free and do not require security. But this is only significant if you have a good or high CIBIL score. Moreover, if you don’t have a credit score, you will have to offer security on a personal loan. Despite that, you can pledge any of your valuable assets as collateral on loan to EarlySalary. This will make it easier for you to avail of a loan from the lender of your choice.
2. Prove your Creditworthiness
A lender always looks for a creditworthy borrower to approve a loan application. Therefore, if you have a stable source of income, you can easily apply for a personal loan from EarlySalary. You can even apply if you have a low CIBIL score or no CIBIL score displaying your salary slip or bank statements as proof of your income. In addition, this will prove your ability to repay the loan amount on time.
3. Get a Guarantor/ co-applicant for the Loan
Likewise, you can apply for a personal loan with a co-applicant or a guarantor but make sure that the guarantor has a steady income. If your co-applicant is a family member, you should inform them beforehand regarding your intentions to avail yourself of a personal loan to avoid confusion.
Then the co-applicant needs to fulfill the KYC process with EarlySalary’s easy-to-use app. They will then check the bank statements and credit history. Then you’re most likely to get your loan application approved if the co-applicant meets the criteria.
4. Apply for a Lower Loan Amount
It’s best to avoid applying for a higher loan amount if you have a low CIBIL score or don’t have one. This is because the lender may either doubt your creditworthiness or charge high interest. But EarlySalary charges low-interest rates on such loans. This ultimately increases your chances of getting the loan approved.
5. Ask for a NA or NH on your Credit Report from your lender
No History (NH) or History not Available (NA) or on your credit report marks the absence of any previous credit activity and credit in the last 36 months. In such cases, you can avail help from EarlySalary consultants. They may consider your situation and offer a personal loan at a reasonable interest rate.
6. Bonus Tip: Do it The EarlySalary way
EarlySalary makes things easier for you. You will no longer have to wander from bank to bank since it’s challenging to get instant loan approval without a CIBIL score online in India. We aim to be one of the most user-friendly instant loan apps in India. These are the five documents you need to avail an instant loan online with EarlySalary:
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