Which Bank Provide Personal Loan for CIBIL Defaulters

Getting a loan can be difficult if you have previously defaulted on a loan. But there are still some ways to procure a loan from banks. 

Read ahead to know which banks provide personal loans for CIBIL defaulters.

Who is Considered to Be a CIBIL Defaulter?

First and foremost, there is no official list of CIBIL defaulters. CIBIL does not maintain one.

However, here are the two reasons why someone might be considered a CIBIL defaulter -

• Failing to pay an EMI or credit card bills
• Delaying the payment of an EMI 
• Settling a loan or closing a loan through settlement without paying the full due amount

All these three affect your CIBIL score and can reduce it drastically. They also show on the credit report which makes it difficult for you to get a loan. 

In fact, if you settle a loan, it stays on your CIBIL score for up to 7 years.

How Can CIBIL Defaulters Get Loans?

Anyone can go through a rough patch that might have led to delayed or missed payments. That does not mean that you can never get a loan if you have defaulted once. 

Here are some ways you can get a loan if you have defaulted or have a very low CIBIL score - 

Opt for Secured Loans

If your CIBIL score is low, or you have defaulted on a loan, you can still choose to take loans against collateral. You can pledge any assets you might have, like gold, or property, and get a loan against it.

Find a Co-signer or Guarantor

Applying for a loan along with a co-signer or guarantor who has a high CIBIL score might be another option in such cases. It helps build trust in the lender and makes procuring a loan easier for you.

Turn Towards Other Lending Options

Getting a loan from a regular lender might be difficult with a low CIBIL score. At such a time, you can turn to online lenders or instant personal loan apps. You can also consider peer-to-peer lending, or taking a loan from your EPF account.

Work on Improving CIBIL Score

The most important thing is to not be discouraged and to start working on improving your CIBIL score slowly. Start paying your EMIs and credit card bills on time, don’t apply for too many loans, and maintain good financial behavior. 

How to Improve CIBIL Score After a Default?

The major goal you must have if you have defaulted on a loan should be to improve your CIBIL score. Here are a few steps that you can follow to do the same - 

• Going forward, evaluate your finances and create a realistic budget that will let you set aside funds for timely debt repayments
• If you have any outstanding dues with a lender and they have marked your loan account as ‘default’, reach out to them. Offer to close the loan by paying the outstanding dues
• After paying the outstanding dues, raise a dispute on the CIBIL website, and get your status updated from ‘default’ to ‘closed’
• Ask for a NOC or a No Objection Certificate from your lender after you have paid your dues. 
• Apply for starter loans, i.e. smaller loans that get approved easily. You might have to pay a higher rate of interest but it will help you to build a positive credit score
• Henceforth, pay all your credit card bills and loan EMIs in full within the respective due dates
• Maintain a Credit Utilization Ratio (CUR) below 30%
• Closely monitor your CIBIL report and dispute any inaccuracies or errors you spot
• Avoid applying for too many loans or making too many inquiries
• Use your credit cards responsibly, and spend only the amount that you can afford to pay off by the end of the month

Defaulting is unfortunately not uncommon. If you have defaulted but are still looking for a loan, you may be wondering which bank provides personal loan for CIBIL defaulters. 

As mentioned above, while most banks do not offer loans to defaulters, there are certain lenders who still might offer financial aid. It is also important to work on increasing your credit score at the same time.

In case you have a low CIBIL score, you can apply for an instant personal loan from moneyview. Here, you can get loans from Rs.5,000 to Rs.10 Lakh, depending on your eligibility and requirement. To know more, check out our website or download the moneyview app now.