Personal Loan Update: When anyone takes out a personal loan, they often face difficulties. Banks gather a lot of information for personal loans. Sometimes, due to paperwork issues, personal loans are delayed. A high credit score is essential for personal loans.
If your credit score is poor, you won’t be able to get a personal loan. It typically ranges between 300 and 900. However, most banks and NBFCs in India prefer lending to people with a credit score of 750 or higher. If your credit score is lower than 750, you’ll face difficulties in obtaining a loan. Some banks will even outright refuse a loan.
What are the chances of getting a loan?
Many fintech companies and small NBFCs across the country offer loans to people with no or weak credit history. These companies assess your income, job type, and account balance to determine whether you’re eligible for a personal loan. If you have a salary or savings account with a bank, your chances of getting a loan from them increase. The bank already knows your transactions.
Add the name of a co-applicant or guarantor
If your credit score is low for some reason, appoint someone with a high score as a co-applicant or guarantor. This gives the bank confidence that the person will repay the loan on time. If a loan instalment is not paid on time, it will impact both parties’ credit records.
Loans can also be obtained against these things.
There are several ways to get a personal loan. If your credit score is low, you can get a loan against property, gold, or a fixed deposit. This is also called a secured loan. This significantly reduces the bank’s risk. Most importantly, the bank’s risk is also reduced.
Therefore, loan approval is much easier, and interest rates are also lower. Even providing a post-dated cheque or a small security for a personal loan is expected to increase confidence.