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HomeBusinessHave a Low Credit Score? You Can Still Get a Personal Loan!

Have a Low Credit Score? You Can Still Get a Personal Loan!

A comfortable lifestyle for salaried individuals is becoming increasingly difficult due to rising costs. Instant Personal Loans have become the go-to solution for those who want to manage aspirations without burning a hole through their pockets (savings). 

Personal Loans can help bridge fund shortage needs in the short run. These are collateral-free and quickly disbursed, which is why they have been a hit with the millennial and Gen-Z population. They offer a fast resolution of immediate/emergency financial needs.  

While the benefits are many, the approval process of personal loan can be extensive. There are various checks that a lender performs before the amount is disbursed. Your credit score tops the list among the first things to be checked. 

A credit score tells the lender about your credit history and how creditworthy you are. The score ranges from 300 to 900, with a score of a minimum of 750 considered good for loan disbursals. Does this mean people with low scores cannot get a Personal Loan?

It will require some effort, but it is possible. 

Here are some tips to follow to get an instant Personal Loan with a low credit score: 

  • Lower loan amount

Loans with higher amounts tend to require more checks from the lender. Instead of going through a long and tedious process, consider opting for a lower amount. Smaller amounts mean less risk for the lender and more manageable payments. This mutual benefit works out best regarding the repayment of the loan. 

  • Get a co-applicant

When you get someone with a higher credit score to be your co-applicant for the loan, you increase the chances of your loan amount getting approved, even if you have a low credit score. This co-applicant acts as a guarantor that if you default on the payment for any reason, they will step in and make the payment. 

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  • Show income proof

A low credit score doesn’t always mean that your credit history is bad. Sometimes, when people don’t have any loans or credit cards, they tend to have a lower credit score since lenders don’t know if they can pay back the loan amount or not. But, if you show your 3-months salary slips as attachments, the chances of a loan approval increase. 

  • Resolve errors in the previous credit report

If you think your credit score is incorrect, get it rectified before you apply for a loan. Getting to these issues after the application can waste precious time and can lead to application rejection. 

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  • Opt for a higher Personal Loan interest rate

A higher interest rate can be heavy on your pocket, but it can increase the chances of your loan disbursal. This reduces the pressure off your credit score, and you can get to your emergency without any issues. You can opt for a prepayment later to minimise the impact of the higher interest rate. 

Getting a Personal Loan with a low credit score is not difficult. The process needs some thinking through from your end. Once you have your documents in order, it shouldn’t take long to get the funds.

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