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Can I get a personal loan with low CIBIL Score?

  Sat, Jan 21, 2017     written by : CSF-Team
Low CIBIL Score

Rohit Gupta, 55, a resident of Mumbai wanted to renovate his house before his son got married. He had a stable income and job in a public sector company and he thought he would be an ideal client for any bank that offers loans. He decided to take a personal loan of Rs 10,00,000 to meet the expenses. On applying for an ICICI Bank personal loan he got a big surprise. His application was rejected on the grounds that he had a low CIBIL Score.

Rohit had never taken any loans before. All he had were 2 credit cards which he paid up in full each month. He could not comprehend why his CIBIL score was low. When he pulled his credit report it showed a record of another credit card that he had stopped using years ago. When he took the card he was assured that it would be a lifetime free credit card. But from the second year onwards when the bank starting charging an annual fee of Rs 2000 he felt cheated. He just paid the outstanding balance of his purchases excluding the annual fees and stopped using the card. He emailed the bank once asking them to reverse the annual fee and then completely forgot about it. The bank however had not reversed the entry and the unpaid dues kept having an adverse impact on his credit score.

The question now was whether Rohit could secure a loan to meet his cash requirements. Rohit did not try at other leading banks because he knew that they all have strict lending criteria. Most banks have a cut off for the CIBIL score below which they do not sanction loans. They fear that an applicant with a low score may default on the repayments and turn out to be a bad investment. Applying to these banks and getting rejected would only bring down his score even further.

Some research over the internet acquainted him with personal loans for low CIBIL score. Rohit knew that he had a valid justification for why he had a low CIBIL score. He had sufficient proof to explain that he had been responsible with the payment of his debt obligations on the other 2 credit cards. He needed an opportunity wherein a lender sees his full financial profile and evaluates him on parameters other than the CIBIL score. After all his low CIBIL score was not because of his wilful default but because of carelessness. He should have followed up with the bank to ensure that no dues are pending against him.

Rohit found out that there were many lenders who offer personal loans for bad credit. These lenders do not follow a theoretical approach to credit assessment. His application was seen with a positive view by these lenders. Since he was financially sound a low CIBIL score did not act as a deterrent. The lender found him to be a genuine creditworthy individual who just had a bad shot with the CIBIL score. The personal loan helped him meet his financial need. He got his house renovated, something that he so desperately wanted to do before welcoming his daughter-in-law in the family.

If you have a low CIBIL score and you got turned down by mainstream banks do not despair. It is not a dead end. Personal loans for bad credit help people secure funds even when the CIBIL score shows that they are a risky borrower. These lenders understand that the CIBIL score is only a reflection of past credit behaviour. How a person will handle his future debts cannot be based fully on this score. They analyse various other factors like debt to income ratio, job stability, collateral etc. to judge whether the borrower is capable of future loan payments. So if you require a chance to give a valid justification of why your score was low and if you can convince the lender why you should be trusted then there are several lenders who are ready to offer personal loans for low CIBIL score. Manage this new debt responsibly by making timely payments, and over a period of time you will be able to restore your credibility and increase CIBIL score.

The presence of such a facility does not take away the importance of a good CIBIL score. All efforts should be made to maintain a good CIBIL score. In the event beyond your control, if it does not happen or takes time to happen, you can count on personal loans for low CIBIL score.