Are you planning to apply for a personal loan since you are facing a financial crunch? Then first check your credit score which proves your creditworthiness. The financial institution where you are applying for the loan will first check your CIBIL score. With a high credit score of 750 and above your loan will get sanctioned quickly.
Poor Credit Score? Here Are Your Options To Apply For Personal Loan!
There will be some of you who may be having a poor credit score and this will make your chances of getting a personal loan bleak. But a poor credit score is not the end of the road as you can still get a personal loan.
- Option 1: You need to nominate a guarantor when you are applying for the personal loan and then you have better chances of getting the loan.
- Option 2: Now some of you may not be lucky enough to find a guarantor but still there are some ways that you can explore to get the loan without a guarantor though it may be a bit tough.
Explore These Options Of Getting A Personal Loan Without A Guarantor:
Getting a personal loan without a guarantor can be a tough and challenging option but it is not an impossible one. There are some measures that you can take so that the financial institution will approve your personal loan application despite your low credit score.
- Your Income Can Be Of Great Help: If you can prove that you are earning well and have sufficient income then your chances of getting the personal loan without a guarantor are better. If you have sufficient income then you can show that you have the capability of repaying the loan and so the financial institution may consider your personal loan request.
- Co-Applicant Can Help You Get Your Loan Approval: Your cumulative income will be more if you apply along with a co-applicant. Your loan eligibility will be better and your loan application may get approved even if you have a bad credit score.
- See If You Can Apply For Low Loan Amount: If you have a poor credit score and you apply for a high loan amount then the financial institution may find it a very risky thing and may not approve your loan application. So, you must try to apply for a low loan amount as the financial institution may agree to give you the personal low despite the poor credit score.
- Try To Find Lenders Who Might Take The Risk Of Giving Personal Loan: Some lenders may be willing to approve the personal loan application even if the applicant has a low credit score and no guarantor. See if you can find such a lender who needs only some basic things to approve the loan. But make sure that you check all the documents and terms and conditions thoroughly before you opt for this option.
- Improve Your Credit Score At The Earliest: One of the best ways to get your personal loan without a guarantor approved fast is by improving your credit score at the earliest. So, you need to find ways and means of improving your credit score.
Improve Your Creditworthiness By Improving Your Credit Score:
- Making Payments On Time Is Very Important: You can increase your credit score if you maintain an error-free repayment history. For this, all that you have to do is ensure that you pay your EMI, credit card bill, etc. on time. If you can avoid becoming a defaulter when it comes to making repayments then you have better chances of having a good credit score.
- Reduce The EMI Amount: The EMI repayment will affect your credit score and one of the main reasons that people are unable to pay the EMI on time is that the amount is high. You can reduce the EMI amount by opting for loans that have longer repayment tenure as this will reduce your burden and you will not go into the defaulter list of the financial institution.
- Applying At Different Financial Institutions At One Time Is Risky: Never apply for loans to different financial institutions in one go, as this can have a negative impact on your credit score. This is because the lender will connect with the credit rating agency to get details about the credit score of the applicant and these types of multiple credit checks will affect your credit score adversely.
- Increase Your Credit History: Lengthening your credit history will help in improving your credit score and you can achieve this by maintaining your old credit cards.
- Rectification Of Discrepancies In Credit Report: Sometimes there may be some errors and discrepancies in the credit report and due to this you may be having a low credit score. In such cases get in touch with the credit rating agency and ensure that the discrepancies are removed and the errors are rectified at the earliest.
- Importance of Credit Utilization Ratio: One of the primary aspects that affect the credit score is the credit utilization ratio. This ratio has to be low if you want improvement in your credit score. For this, you have to make sure that you do not use more than 50% of your credit limit.
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Your bad credit score can jeopardize your chances of getting a personal loan. If you can find a guarantor then you do have a chance of getting a personal loan even if you have a bad credit score. In case you cannot find a guarantor and you have a bad credit score then you will have to explore other options like applying for a personal loan with a co-applicant or apply for a low loan amount or giving proof of high income.
One of the best things that you must do to get your personal loan without a guarantor approved at the earliest is to improve your credit score. If there are any mistakes in the credit report then make sure that you get the same rectified at the earliest. With these few measures, you will surely be able to get approval for your personal loan at the earliest.