If you are looking for a personal loan or a loan of any kind, it is important to have a high CIBIL score. This is because a high CIBIL score is an indicator of your repayment ability and creditworthiness. Not only does a CIBIL score of over 750 guarantee an instant loan, you can also get one at reasonable terms and conditions.
But it is not easy to have and maintain a high CIBIL score. Sometimes, unexpected financial problems or mishandling of funds can cause your credit score to fall down. For eg. What if your CIBIL score is 550? Can you get a personal loan for CIBIL score of 550?
Personal loans are incredibly popular as they can be used for multiple reasons and don’t need collateral. However, as these are unsecured loans the interest rates tend to be on the higher side and the eligibility criteria is stricter as compared to other secured loans such as home loans and auto loans.
This is why most personal loan providers require applicants to have a credit score of 750 or more. However, there are a few lenders such as Money View that offer personal loans to even those whose CIBIL scores are on the lower end of the spectrum, as long as it is above 600.
The next question would be whether you can get a personal loan for CIBIL score of 550 in India. The answer is that it will be quite difficult. While you may find lenders who provide a personal loan for CIBIL score 550, the terms and conditions will be unfavorable. This is because the lender will have no faith in such as the borrower's repayment ability and will therefore avoid providing a loan.
If the loan is sanctioned, the interest rates will be exorbitant, even going above 40% per annum, the repayment term will also be low. Additionally, you will not be able to get a high loan amount either.
Instead of applying for a personal loan, borrowers can try to borrow from funds from other options given below -
Ask a friend or a family member for financial help. Not only will there generally not be any interest component attached, you may be able to get a higher amount
If you have property or jewellry, try keeping that as collateral for a loan. This way you will be able to get a loan a lot more easily and the collateral will act as security in case you are unable to repay
Try to avail a loan with the help of a guarantor or co-signer who has a good credit score. However, it is imperative that you repay the loan on time else your co-signer’s credit score will get affected
Focus on increasing your credit score as much as possible
Here are some steps you can follow in order to increase your CIBIL score at the earliest -
Repay all your loans on time and in full. This is the single most important step that you can take to increase your CIBIL score. If you have pending loans, make sure you clear those first before taking new loans. Take a debt consolidation loan if it will help you.
Ensure that your credit utilization ratio is below 30% if you are using a credit card.
Even if your income is high, if most of that income is being used to repay loans then your credit score will fall and lenders will hesitate to provide personal loans to you. Therefore, ensure that your debt-to-income ratio is low
Do not miss any EMI payments. If you are unable to pay your EMI at any time, contact your lender immediately and try to find other solutions
Have a mix of secured and unsecured loans. This will also help improve your credit score over time
Check your credit report regularly to ensure that there are no discrepancies. If there are, get them corrected at the earliest
To know more about how you can improve your credit score, check out this article.
One of the foremost loan providers in the country, Money View offers personal loans of upto Rs. 5 lakh. You can get these loans within 24 hours by applying through the website or app and the entire process will take minutes. Not only that but the documentation requirements are also quite minimal.
The best part? Even if your credit score is on the lower side, you do not have to worry because Money View uses a unique credit rating model which means that even if your CIBIL score is below 750, you can still get a personal loan. However, you will need to have a minimum CIBIL score of 600.
Ans: It will be difficult for you to get a personal loan for CIBIL score 550 anywhere in India. Even if you do, the interest rates will be very high. Therefore, it is important to improve your CIBIL score first.
Ans: If you wish to avail a personal loan from Money View, you will need to have a minimum CIBIL score of 600.
Ans: No, a CIBIL score of 550 is quite bad. Only a score of 750 or above is considered to be good. This article explains the breakdown of CIBIL scores in detail.
Ans: If your CIBIL score is low, then the interest rates will be quite exorbitant. For a score of 550, interest rates can go upwards of 40% per annum.
Ans: There are a number of ways to improve your score. Some tips include repaying your debt on time, not taking unnecessary loans, keeping a low debt-to-income ratio, etc. Here’s how you can get a high CIBIL score.
Ans: In order to get a personal loan from Money View, your Experian score has to be 650 or more.