Personal Loan for CIBIL Defaulters
There are certain conditions that prevent individuals from availing a personal loan easily and one of them is having a low credit score or if the applicant is a CIBIL defaulter
A CIBIL defaulter is an individual who has not repaid his/her loan installments. This has a detrimental impact on the borrower’s CIBIL score and makes it extremely hard for them to avail another loan or credit card in the future.
Who is Considered to Be a CIBIL defaulter?
While the term ‘CIBIL defaulter’ is neither used generally nor is there an official list of ‘CIBIL defaulters’, it can refer to those that have CIBIL scores of less than 600.
- While the CIBIL report is a consolidated report of the consumer’s credit activity, the CIBIL score is a three-digit numerical summary of the credit report provided by TransUnion CIBIL, a premier credit information company. This score can range from 300 to 900 and any score above 750 implies that the individual is creditworthy and is most likely to repay loans and bills on time.
- Each time an individual applies for a loan or a new credit card, their CIBIL score will be checked and if it is favorable, then he/she will be able to procure the said loan or credit card easily and on their terms.
- However, there are instances wherein one is unable to or neglects their loan payments or indulges in behavior that is detrimental to their credit score. While building a credit score takes time, reducing it, even unintentionally, is unfortunately a faster process.
So where can we avail an online loan for CIBIL defaulters from?
Ways to Avail Personal Loans for CIBIL Defaulters Online
When it comes to a loan defaulter, as a solution, banks or other financial institutions upon discussion with the borrower can either increase the loan repayment tenure or increase the interest imposed on the loan.
However, the good news is that there are options to avail loans for CIBIL defaulters. Some of these include:
- Apply with a Co-signer or Guarantor
Applying for a loan with the help of a guarantor or co-signer who has a high credit score mitigates the risk of loan default. However, it is important to ensure that the loan is repaid on time because the co-signer will also be affected negatively if this loan is defaulted.
- Borrow at a Higher Rate of Interest
Personal loans are generally more popular as they do not require collateral. However, due to this factor, the rate of interest charged on personal loans is high.
- Choose Loans that Accept Collateral
If the loan defaulter is in possession of collateral such as property or other fixed assets, this can be used to avail a loan as the risk is lower for the lender. However, in order to avoid the seizure of assets, this loan must be repaid on time at all costs.
- Opt for Loans from Online Lenders
Another option for personal loan defaulters is to avail loans from online lenders such as moneyview as these lenders are a lot more lenient in the disbursement of loans and have different credit models and rates of interest.
- Seek Other Lending Options
Borrowers can explore other lending options such as peer-to-peer lending or withdrawing a part of their provident fund. Additionally, if the borrower’s salary is high enough, this can also be used to convince lenders to disburse loans to them
- Work on Improving Credit Score
Last but not the least, the most important step for loan defaulters to take is to improve their credit score. Continue reading to know more about this.
Personal Loan for CIBIL Defaulter from moneyview
One of the top personal loan providers in the country, moneyview offers affordable personal loans to all individuals within India, including those with a relatively low credit score.
Not only are these loans easy to avail but require minimal documentation, and are provided within 24 hours of loan application approval.
More importantly, moneyview uses a unique in-house credit rating model to assess one's creditworthiness. Therefore, even those with relatively lower credit scores can apply for a moneyview personal loan for CIBIL defaulters. However, the minimum CIBIL score necessary is 600.
To know more about moneyview personal loans, click here.
How to Improve and Maintain a High Credit Score?
There are multiple steps one can take to build up a good credit score. Past payments, as well as credit history, have a significant role. Some of the steps that can be taken to maintain a high credit score are as follows:
- Individuals must pay all their bills on time and in full if possible. Paying just the minimum balance due can be detrimental in the long run
- The full balance of the credit card must not be used. Experts are of the opinion that utilizing 30% to a maximum of 50% of the credit limit is optimal
- Individuals must ensure that their loan portfolio is a good mix of secured loans (auto loans, home loans) and unsecured loans (credit cards and personal loans)
- In case individuals have acted as a cosigner for loans or as a guarantor, these accounts need to be monitored carefully. Ideally, one must not opt to act as a co-signer unless they have complete confidence and evidence that the borrower is able to repay the loan on time
- Finally, individuals must also review their credit scores and credit history often to ensure that discrepancies, if any, are corrected immediately
How to Find out and Remove Your Name from the CIBIL Defaulter List?
As mentioned previously, an official CIBIL defaulter’s list does not exist. However, the only way to ensure that one is no longer considered to be a ‘CIBIL defaulter’ is to -
- Either ask for a personal loan default settlement from the lender after fulfilling the necessary conditions
- Pay EMIs on time and gradually build up the credit score by following the tips mentioned previously. Once the borrower has built up a good credit score, he/she can avail loans a lot more easily.
Conclusion
Maintaining a good credit score is essential to avail loans, both secured and unsecured, easily. Whether one is a personal loan defaulter for a few months or a personal loan defaulter for 10 years, building back credit is essential. This also applies to other loans as well. Loan defaulters can avail loans through various means and in the meantime can focus on improving their credit score. If you are looking for an online loan for CIBIL defaulters then visit the moneyview website or download the loan app and apply now!
