Instant personal loans are unsecured forms of credit where you do not have to put up any collateral as security. Due to the collateral-free nature of this loan, it carries a slightly higher risk for lenders compared to loans with security. When you apply for an instant loan, several factors are considered before your loan is granted. One of the most important considerations for NBFCs and banks is the borrowers’ credit score since it is a marker of their repayment history.
Securing a low CIBIL instant loan may seem challenging, but it’s possible with the right approach. Opt for lenders specialising in loans for low credit scores, such as NBFCs or digital lenders. Provide a strong co-applicant or guarantor to boost approval chances. Highlight other income sources to assure repayment capability. Collateral-based loans, like gold or secured personal loans, are viable options. Research lenders offering an instant personal loan for low CIBIL score, and ensure timely repayments to improve future creditworthiness.
Why is CIBIL Score important?
A CIBIL score is crucial for assessing your creditworthiness when applying for loans or credit cards. Here’s why:
- Lenders use it to evaluate the risk of lending.
- Higher scores ensure better loan terms, including lower interest rates.
- Low scores make accessing credit difficult or costlier.
- For an instant loan low CIBIL, lenders may impose stricter terms, making maintaining a good score essential for hassle-free borrowing.
How does instant personal loan for low CIBIL score work?
Instant personal loans for low CIBIL scores work by assessing other factors beyond just the credit score. Lenders consider the applicant's income, employment stability, and repayment capacity. These loans often have higher interest rates and stricter terms. Applicants may need to provide collateral or have a guarantor. The loan amount is typically lower, and the repayment period shorter. Repaying such loans on time can help improve the credit score over time.
Instant personal loan options for low CIBIL Score
Getting an instant personal loan for low CIBIL score is possible with these options:
- NBFCs and Fintech Lenders: These lenders often have lenient credit requirements.
- Collateral-Based Loans: Offering assets like gold or fixed deposits can secure approval.
- Co-applicant or Guarantor Loans: Involving a guarantor with a good credit score can improve approval chances.
Explore these alternatives to access quick funds while ensuring timely repayments to improve your credit profile.
What factors lower the CIBIL Score
A CIBIL score is a crucial indicator of an individual's creditworthiness. Here are some of the factors that can lower an individual’s CIBIL Score
- Late or missed payments: Failing to make timely payments on loans or credit cards significantly lowers the score. Even a single missed payment can have a negative impact.
- High credit utilization ratio: Using a large portion of your credit limit (above 30%) signals a higher dependency on credit and reduces the score.
- Loan defaults or settlements: Defaulting on loan repayments or settling loans for a lower amount than originally borrowed reflects poor financial management.
- Frequent credit applications: Applying for multiple loans or credit cards within a short period makes lenders view you as a high-risk borrower.
- Closing Old Credit Accounts: Older credit accounts contribute to a longer credit history, which helps maintain a good score. Closing them can shorten your credit history and lower your score.
- Errors in credit report: Inaccuracies in your credit report, such as incorrect loan details or fraudulent transactions, can reduce your score if not corrected.
- Co-signing or guaranteeing loans: If you co-sign a loan for someone and they default, it affects your credit score as well.
- Overdue credit card balances: Carrying forward high outstanding balances on credit cards can reduce your score, even if you pay the minimum due.
- Frequent loan rejections: If lenders frequently reject your credit applications, it signals financial instability and lowers your score further.
Why choose an instant personal loan for low CIBIL Score
Opting for an instant personal loan for low CIBIL offers:
- Quick approval: Funds are disbursed promptly, ideal for emergencies.
- Flexible lenders: NBFCs and fintechs cater to low credit profiles.
- Customised terms: Collateral or guarantor-based options ensure accessibility.
This makes it a practical choice for urgent financial needs.
Documents required for instant loan with low CIBIL Score
The documents required vary based on the lender’s terms. To get an instant personal loan for low CIBIL, it is a good idea to prepare these documents:
- KYC documents: Aadhaar/ passport/ voter’s ID/ driving license/ Letter of National Population Register/ NREGA job card
- PAN card
- Employee ID card
- Salary slips of the last 3 months
- Bank account statements of the previous 3 months
- Piped gas bill
- Pension order
- Letter of Allotment of Accommodation Issued by Employer
- Property / Municipal tax receipt
- Utility bill
A CIBIL Score of 685 is needed to qualify for a regular personal loan. However, you do not need to know your credit score to apply for our Insta Personal Loan because we run a credit check before making you an offer. Existing customers may already have pre-approved loan offers in place. As for new customers, we generate a pre-assigned limit by considering many factors, like your credit score, payback history, and so on.
Here is how an Insta Personal Loan works
Insta Personal Loan is available to both existing and new customers. Depending on your profile, you may need to submit additional documents.
In the case of existing customers
We have pre-approved Insta Personal Loan offers for our existing customers, which they can check online with just a phone number and OTP.
For instance, Priya already has an Insta EMI Card and wants to know if she has a pre-approved instant loan offer from Bajaj Finance. She can visit the Insta Personal Loan page and enter her mobile number and OTP by clicking on ‘CHECK OFFER.’ She will then get to view her pre-approved offer on the screen. Priya now has the choice of applying for the loan immediately or later. She can also choose a lower amount than the offer and go ahead with her application.
In the case of new customers
New customers who want an Insta Personal Loan offer might need to send additional paperwork and go through a CIBIL check.
For instance, Avani wants an Insta Personal Loan even though she is not an existing customer of Bajaj Finance. She can click on "CHECK OFFER" and enter her mobile number and OTP. She will be able to view the pre-assigned loan limit on the screen. Avani now has the option to proceed with the application procedure, which requires less than five minutes. She may need to submit KYC documents or bank statements, depending on her profile.
If no offer is displayed
If you do not see an offer or need a loan amount greater than the pre-assigned limit, you can choose to apply for our regular personal loan. This takes less than 5 minutes.
In conclusion, you do not have to check your CIBIL Score to apply for our Insta Personal Loan. However, you can still take steps to increase your credit score, since it can help you in getting better deals on loans. With a high CIBIL Score, you may get offers for higher loan amounts at lower interest rates.
Conclusion
Securing an instant loan on low CIBIL Score may be achievable through flexible lenders and collateral-backed options. By improving credit habits, you can access better financial products in the future, ensuring stability and growth.
