How To Get a Personal Loan for a CIBIL Score of 550 to 600?

Dec 19th 2023
Loan
Get Personal Loan for a CIBIL Score of 550 to 600

How To Get a Personal Loan for a CIBIL Score of 550 to 600, When it comes to meeting any urgent financial needs, the easiest and fastest way is to opt for a personal loan which can easily be availed in today’s fast-paced environment. There are hundreds of banks, NBFCs, and private lenders available in the market that are ready to offer customized personal loan offers to people at affordable interest rates. Be it a medical emergency, wedding, child’s education, or vacation, a personal loan is undoubtedly the best savior for people looking to get quick cash for any type of need. However, one thing that holds the most value in any personal loan application is your CIBIL score. The higher your CIBIL score, the higher your chances of getting your loan approved. 

How Are CIBIL and Personal Loans Interconnected?

CIBIL stands for Credit Information Bureau of India Limited and is a statutory body that looks after the credit records of both individuals and businesses. A person's CIBIL score of a person ranges between 300 and 900. It is generally believed that people with a 650+ CIBIL score have a high chance of getting their loan applications approved. The role of CIBIL in personal loan applications is quite high as lenders consider applicants highly riskier if their CIBIL score is low. On the other hand, a person with a 700+ credit score means his loan application is likely to get approved by the lenders

CIBIL score

Status

Chances of approval

Below 600

Extremely bad

Very low

600-649

Poor

Low

650-699

Okay

Possible

700-749

Good

High

Over 750

Excellent

Very high

What Factors Cause a Low CIBIL Score?

There are lots of factors that can negatively impact your CIBIL score. As a responsible borrower, you need to work on these factors to see an improvement in your CIBIL score over a period of time. However, the first thing to do is to understand these factors so that you can work on them. Let’s get to know a few reasons that could cause a low CIBIL score. 

  1. If you have skipped or made late payments against your credit card or loan account, your CIBIL score is bound to sink down. 
  2. If you excessively use your credit card and pay just the minimum amount, it is considered as high credit card utilization which also leads to a lower CIBIL score. 
  3. Your credit hunger behaviour plays a major role in downgrading your credit score. If you make too many loan or credit card applications, it shows that you are desperate for credit.
  4. Sometimes, misleading information or errors in your CIBIL report also causes your credit score to drop. 

Read More: Is it Possible to Get a 50,000 Loan Without CIBIL?

How To Get Personal if Your CIBIL Score is Between 550 and 600?

In general, people with a CIBIL score of 650 can expect to get a personal loan even at a higher interest rate. However, if your credit score is below this range, your loan application is likely to get rejected. However, this doesn’t mean that there is no other way to get a personal loan with a low CIBIL score. let’s find out how can you get a personal with a CIBIL score of between 550 and 600.

1. Opt for a secure personal loan

If you have anything that you can put as a collateral with the lender, you can choose to take a secured personal loan. The loan amount will be decided by the lender given the rough value of the asset you use as a guarantee. A few examples are gold jewelry, real estate property, or anything else. This way, lenders will feel secure as in the case of non-payment of loan amount, they can use the collateral to recover the due amount. 

Read More: How to Get Instant Loan Online of Up to 50 Lakh?

2. Make a join application

If you have a CIBIL score of 600 and you want to take a personal loan, you can apply for a personal oan with a co-applicant or guarantor. Ask a friend or relative to become an applicant in your personal loan application. If his or her CIBIL score is okay, it will negate the value of your CIBIL score and your loan application will have a higher chance of getting approved by the lenders

3. Choose a lower loan amount

If you want a loan amount of let’s say 1 lac, you can apply for a personal loan with a lower loan amount. This will reduce the risk associated with your CIBIL score and a majority of lenders may approve your loan application for a lower personal loan amount. This is a wonderful strategy to get a personal loan if your CIBIL score is 550.

FAQs

Is It Possible to Get a Personal Loan With a CIBIL Score of 650?

You can still be eligible for loans with a credit score of 650, which is generally regarded as fair, but the conditions and interest rates might not be as beneficial as they would be for someone with a higher score. To discover the greatest deal, it's important to shop around and compare offers from different lenders as their requirements may differ.

Can I get a personal loan if my CIBIL score is 550?

It might be difficult to get a personal loan with a CIBIL score of 550. This low of a score is regarded as bad, which makes conventional lenders reluctant to grant loans. Before applying for better loan choices, you might need to look into different lenders, submit collateral, or focus on raising your credit score.

Who Can Be a Guarantor?

A guarantor refers to a person who is willing to be held responsible for another person’s debt payment if the latter defaults to a loan repayment. It is important to note that becoming a guarantor is not a mere formality with the intention of helping the borrower and the guarantor shares equal responsible for the loan repayment. 

The Conclusion

Having a good cibil score is a big plus for today’s generation as it can help them in getting any type of loan from banks at lower interest rates. On the other hand, people with low CIBIL scores tend to face a lot of hurdles in getting their loan application approved and even if they get approved, they incur heavy interest rates due to the increased borrowing risk associated with their profile. 

If you are having low CIBIL score, you can work in several ways to seek an improvement in your credit score. By adopting a disciplined borrowing approach, you can
 

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