A BRIEF INTRODUCTION ABOUT CIBIL:
CIBIL stands for Credit Information Bureau (INDIA) Limited. It can be referred to as a certain database which carries the entire credit details and information of the borrower. Now the whole phenomenon is when a borrow applies for a bank loan, the bank first checks out his/her credit history by getting a CIR (Credit Information report) which is generated by CIBIL. After going through the report, the bank then makes a decision whether to grant loan to the certain borrower or not. CIBIL facilitates the bank by preventing the risk of bad loans.
You can get your CIR report from CIBIL to check if you are included in the CIBIL defaulters list or not. You first request the bank for your CIR report and the bank will further request the CIBIL; you will receive a code referred to as control number which consists of 9 digits.
Now you need to send a demand draft worth 142 RS to CIBIL along with your control number that you received from the respective bank. Now in this entire process you need following documents to be processed. These documents include CIR Request Form, PAN/Passport/Voter’s ID (identification proof), and Bank Statement/Electricity Bill/Telephone Bill (for proof of accurate address). Note that the CIBIL is only responsible for generating CIR report and make the bank aware of the entire credit history of the borrower and if his name is in the CIBIL report defaulter list. And the decision depends upon the bank whether to provide loan to the borrower or not.
First let us discuss what the term personal loan and CIBIL score refers to. Personal loan is the loan which is borrowed for one’s own basic needs and requirements. But note that this type of loan is not secure as the bank doesn’t provide any kind of security against this loan. This loan can be borrowed for various many purposes which may include holiday trip, refurbishment of your home, buying anything for yourself, for funds of any wedding in your family, etc.
Now coming towards the CIBIL score, this score is basically a proof to your credit worth. The score usually lies between 300 and 900. The higher, your CIBIL score is, the greater chances will be for your loan approval. Lesser the score is the greater chances will be for your loan denial or refusal. According to the reports and survey, majority of the loans are approved for individuals with above 750 CBI scores.
Now the main question that arises here is that what is the reason behind the loan denial of an individual having low or bad CIBIL score? Well, yes there is a solid reason behind it. The individual having low or bad CIBIL score is considered as a defaulter and the chances are very high that he/she may default the repayment of loan in future. So CIBIL plays a significant role in checking the entire credit background of the borrower to avoid any risk in the future.
Now in this piece of content, I will guide you regarding how you can get your loan application approved while having low/bad CIBIL scores. Below we have mentioned a few tips which may work as an alternative to help you get personal loan no matter if your CIBIL score is poor.
If you have got a good salary now:
Now if your earning is good enough now and that you have enough capacity to repay your loan then this will help you get your loan application approved no matter whatever your CIBIL score is.
If your CIBIL score is poor and your spouse has got a good CIBIL score, then you may ask for his/her assistance. You can get your loan application approved by making your spouse a join loan holder.
Seek certain HFCs that offer loans to individuals with low CIBIL scores:
There are certain companies and organizations which provide loans to the individuals having bad CIBIL scores. However, they ask for higher interest rates on the loan repayment.
Well this type of practice is popular in abroad. However, it is being implemented in India gradually. The interest rates on this loan are quite high and loan amount is small as well.
You can go for loan against collateral including shares, assets, FDs, gold loan and there are many other products available as well. Banks do not go through the process of CIBIL report for such products.
These were certain options to help you get personal loan for low CIBIL score. By following any one of these suitable tips, you can achieve loans for bad credit score. These are the top methods to fund you in case of bad CIBIL scores. But still if none of these options work, then it is better to borrow money from your friends or family members. Personal loan is quite easier to get as it requires no such guarantee or security for approval. You don’t have to be an account holder for applying for personal loan and you can use that loan for any purpose. However the major disadvantage of this loan is the high interest rate charged on loan amount by the bank. Moreover, as you all know that there are many banks all over the country which provide people with personal loans. But let me mention a few popular and the top ones. The top lenders in India include the names of State Bank of India, Axis Bank, Canara Bank, HDFC Bank, ICICI Bank and many others.
You may have brighter chance to get loans for low CIBIL defaulters by following their rules.