Finance

How to avail of a personal loan without CIBIL score?

When you apply for a personal loan in India at any bank or financial institution, your CIBIL score is the initial thing that lenders check. A strong CIBIL score of 750 and above enhances the personal loan eligibility chances of the applicant, which may help them avail of a loan without showing their salary slip or income proof. This goes without saying that a CIBIL score is crucial for anyone wanting to avail of financial aid. CIBIL score defines your credibility, particularly when you apply for a personal loan, which is nothing but an unsecured loan. However, with an increasing number of financial institutions providing new schemes as well as offers, financial services have become highly accessible for individuals looking to avail of an instant loan with no CIBIL score is possible today. 

What is meant by CIBIL score? 

For any loan with zero security or collateral, a CIBIL score check is performed to determine the applicant’s eligibility. CIBIL score or credit score is nothing but a 3-digit numerical number of an individual’s/business entity’s credibility. The score is well maintained by Credit Information Bureau Limited and is utilized to evaluate whether the applicant will be able to pay back the loan amount in due time. 

All the financial institutions and banks provide their credit details with CIBIL based on which the credit score is calculated. An applicant applying for a personal loan with zero income proof, salary slip can even avail approval depending upon their score. But the major question that emerges here is, can you avail of a personal loan without CIBIL score? 

What does a no or low CIBIL score mean? 

CIBIL score ranges between 300-900, wherein a score lower than 750 is usually thought to be a low score. A personal loan is an unsecured loan option that does not need any security or collateral in return. This signifies a higher risk for lenders. However, a strong credit score reveals a history of timely repayments and is a good testament to show your credibility. This for sure does not mean it is not possible to avail of a long/short term loan with zero CIBIL scores. You can apply for a personal loan without CIBIL score. However, you must factor in a few options. However, before this, let us first discuss solutions to a few shortcomings, which you can improve to enhance your credit score. 

Low credit score and zero income proof: ameliorate your credit score

CIBIL score is a dynamic factor and changes depending upon the recent credit info and debt repayment status. It means that you simply can work on ameliorating your score before you submit an application for a loan. 6 months of repaying your EMIS and dues on credit cards by the due date can make a lot of difference on your score. Balancing between your secured and unsecured loan options, maintaining a low CUR (Credit Utilization Ratio), not closing your old credit accounts etc., are a few factors that can ameliorate your score. Once your credit scores have ameliorated, you can simply apply for the personal loan with zero salary slip or income detail requirement, just based on your score.

Holding income proof but zero credit score: Avail the personal loan.

For individuals who are availing of their first credit option, it may mean they have no credit history. It is very much possible to get a personal loan without a CIBIL score at an excellent interest rate if you can provide proof of steady income. For such an application for a personal loan without CIBIL score, the lender might at times hold certain eligibility needs, like holding an income above the set limit, employment tenure in the current company etc. For an instant loan with a zero CIBIL score, your personal loan eligibility would depend upon your income. 

Low eligibility: Accept the higher rate of interest

It can be very tough to avail personal loan if you don’t have both income proof and CIBIL score. Usually, if an individual is not able to qualify based upon the CIBIL score or income check, lenders might offer a higher personal loan interest rate in comparison to the others. Based upon your repayment tenure and your potential to repay, you can accept the higher rate of interest and get the personal loan without CIBIL score or income checks. However, you will be required to look around for the lender with a flexible eligibility criterion. 

No or low credit score and zero income proof

If you do not have a credit history or are in instant fund need and do not have much time to ameliorate your credit score or hold no income proof, here are some of the crucial options: 

Opt for a joint loan option

You can submit an application for the joint loan with a zero CIBIL score if anyone in your family has an excellent score. When you apply for the joint loan, the CIBIL score of you and your family member both is considered. Once approved, you will get the loan. This way, you can also opt for bigger loan options like a home loan without an excellent CIBIL score at a lower rate of interest. 

Search for a loan guarantor

If you face any trouble availing of a short term or long loan without a credit score due to no credit history, you may ask your family, like your sibling, to serve as a guarantor for your personal loan. However, you will require to make sure that the member who will serve as a guarantor has an excellent score. It is one of the common ways wherein individuals apply for a personal loan without having a credit history. 

You may consider providing a collateral

A major feature of opting for a personal loan is there is no limitation on the end-use of the proceeds, which also apply for other loans like a gold loan, loan against property etc. As a personal loan is an unsecured loan, opting for another loan like a gold loan, loan against securities or property by providing security to avail the loan may boost your eligibility if you do not have a score and income proof.  

In India, one of the most common collaterals or security is gold put up by the applicant to take up an instant loan without any CIBIL score. Based upon your requirement, you can provide your asset to avail of the loan. Lenders will ascertain the value of the asset as well as the maximum loan amount that you are eligible for.

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