When a financial crisis hits you, applying for an instant loan is the best way to get out of it. However, if you have an extremely low credit score, you might think your chances of getting an instant loan are bleak.
But, while it can be difficult to avail of one, it is certainly not impossible to get an urgent loan for CIBIL defaulters. Following the tips below, you can get closer to getting an instant loan online.
But, first things first. What is CIBIL, who is considered a CIBIL defaulter, and what challenges do they face? So, let’s dive right in.
What is CIBIL Defaulters?
CIBIL stands for “The Credit Information Bureau (India) Limited.” It is one of four credit information companies that store credit information about individuals and businesses. The company has a “CIBIL score” that represents the individual’s health to repay the loan. This score has a range of 300 – 900. The closer the score is to 900, the higher the chances of getting approval for the loan.
While there is no one definition of a “CIBIL defaulter,” you can consider one to be a CIBIL defaulter if they have a score less than 600. Usually, people who don’t repay loans on time and default on other assets have a score of less than 600. The credit score is also adversely affected if you apply for multiple credit cards or even multiple loans within a short period.
So, how do urgent loans for CIBIL defaulters work? What must such people do to increase their chances of getting a loan? Let’s find out in the next section.
Methods to Secure Urgent Loan for CIBIL Defaulters
Lenders might be apprehensive about offering urgent loans to CIBIL defaulters, so you must consider a few things to increase your chances of getting a loan.
These are some options available to get an urgent loan for CIBIL defaulters.
1. Apply with a co-signer
Your chances of getting a loan increase drastically when you apply with a co-signer or guarantor with a high credit score. Since they have a higher credit score, it minimises the risk of your application being rejected when you apply for an instant loan online.
2. Borrow at higher rates of interest
As you have a poor CIBIL score, lenders will not entertain offering loans that easily. However, they can offer loans at higher interest rates to offset the risk. So, if you can afford a higher interest rate, then certain lenders might be able to help you.
3. Use collateral to apply for loans
If you have any physical assets, you can use them as collateral to apply for loans. As this gives security to lenders, they will be more open to offering loans. However, it is essential to note that they may seize the property if you fail to repay the loan, so you should exercise caution.
Now that you know the options to avail of an urgent loan for CIBIL defaulters, the next step is to see the application process.
4. Try to improve your credit score
Ultimately, your credit score is one of the most important parameters in availing of an instant loan online. If you have an existing debt, try to repay the loan on time to improve your chances of getting a higher credit score. This will help you have a better chance when you apply for a new loan.
5. Explore other alternative options
If you have tried other options, and nothing seemed to work, you can try going traditional. You can explore alternatives such as peer-to-peer lending, where you can ask for money from an acquaintance or friend with informal arrangements.
How to Apply for an Urgent Loan for CIBIL Defaulters Online?
Here’s a step-by-step process of how to get urgent loans for CIBIL defaulters online.
1. Research the lenders offering loans for CIBIL defaulters
Due to low credit scores, certain lenders may not offer urgent loans to CIBIL defaulters. But that doesn’t mean that every lender is against providing loans to them. That’s why you must research properly to see which lenders offer loans and which don’t.
2. Check the eligibility criteria
To apply for a personal loan with a low credit score, you’ll have to meet the following eligibility criteria-
1. The applicant must be between 21 and 58 years of age
2. The applicant must have a minimum monthly income of Rs. 15,000
3. The applicant must have a minimum of one year of work experience Additionally, don’t forget to check for the interest rate, tenure, and other loan terms offered by the lender.
Once you know the lenders offering loans to CIBIL defaulters, the next step is to see what criteria they have set. But be aware that since you are applying as a CIBIL defaulter, there may also be other criteria, so look carefully.
Also, check for their interest rates, tenures, and other important terms and conditions you find necessary.
3. Gather all the documents
The lender will require you to submit a set of required documents. Make sure to collect the following documents and keep them updated-
1. ID proof (Aadhaar card/ Passport/ Driving license/ Voter ID)
2. Address proof (Aadhaar card/ Passport/ Voter ID/ Driving license)
3. A copy of your salary slips for the last two months
4. A copy of your bank statement for the last two months
5. A certificate stating one year of continuous employment
4. Submit the application online
Once you have all the required documents, go to the lender’s website and fill out the application form. You will be required to fill in details like your name, address, loan needs, etc.
5. Await verification
Upon filling out the application, upload your documents. After this, the lender will verify your application and submitted documents. Once they are satisfied, they will approve your loan application. If not, you’ll have a list of reasons to check for resubmission.
How To Improve CIBIL to Get Loans for Defaulters?
Getting a loan can be challenging if you have a low CIBIL score. However, there are a few things that you can do to improve your credit score and boost your chances of loan approval.
- Make sure to pay your loan EMIs on time. Missing your EMI payments can attract penalties and also have a negative impact on your credit score.
- Apply for a loan amount that you can comfortably repay. Borrowing a high loan will lead to high EMIs based on the tenure and might make repayment difficult for your finances. 3. Choose a comfortable loan tenure to ensure affordable and smooth EMI payments.
The Bottom Line
CIBIL scores are a crucial aspect of modern finance. Lenders depend on this number to ascertain an applicant’s creditworthiness. While urgent loans for CIBIL defaulters are still attainable, boosting your score is always a good idea.
Basic steps to increase your CIBIL scores, such as paying your loans on time and avoiding taking more than you need, can help immensely. This will also help you get an instant loan online without much trouble.
So if you are looking for an instant loan, why not try Tata Capital? We offer loans at competitive interest rates with minimal documentation. Furthermore, within four simple steps, you will get the necessary funds in no time.
Visit our website today and avail yourself of an instant loan!
FAQs on Urgent Loan for CIBIL Defaulters
How to get a personal loan for CIBIL defaulters?
CIBIL defaulters can get a loan by offering collateral, applying with a co-signer, or availing of a loan at a higher interest rate with the lender. Alternatively, they must focus on improving their credit score or try alternative borrowing options like peer-to-peer lending.
Can a defaulter in CIBIL get a loan?
While it can be difficult for CIBIL defaulters to get loans at favourable terms, they can try applying with a lender at a higher interest rate, get a co-signer, or consider pledging collateral.
Does CIBIL reset after 7 years?
CIBIL retains an individual’s financial and credit history for 7 years, after which details of any missed payments or defaults are removed.
How to clear a bad CIBIL score?
You can improve a bad CIBIL score by repaying outstanding debts, maintaining low credit utilisation, and applying for a new loan within your limit. Opting for an affordable loan amount will make repayment easier on your finances.
How can I correct my CIBIL score immediately?
You cannot build your credit score immediately. So, make sure to repay any outstanding debts, use your credit prudently, and apply for affordable loan amounts within your financial capacity to improve your credit score over time.
09 October 2024
8 mins read
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