Offers
Rates
V-KYC
Debit Card Related
Credit Card Related
SA Welcome Kit 
Manage Mandate(s)
Get Mini Statement
categories
Bloggers
Blog collection
Press Release
Tips to avail of a Personal Loan despite a low credit score!
Posted on Wednesday, September 28th, 2022 | By IndusInd Bank
Although you can apply for an instant personal loan online nowadays, obtaining one with a low credit score might be challenging but not impossible. Experts advise you to keep a healthy credit score, make your payments on time, and in general keep good financial habits to increase your borrowing capacity in the long run. It often happens that people may miss a few of their payments towards a credit card or home loan due to unforeseen circumstances. Such situations cannot be reversed but there are various ways you can get a personal loan despite having a low credit score.
Proof of EMI payment Capacity:
When you are applying for a personal loan, you can get an accurate monthly payment estimate using an online PL EMI calculator. You know that despite your low credit score, you have the capacity to repay the personal loan. Therefore, your income is the biggest differentiator here which determines your creditworthiness which comes after your credit score. If you provide your salary slip or other proof of monthly source of income to a bank, you improve the likelihood of getting a personal loan.
Add a Guarantor:
In some cases, banks may sanction personal loans if you provide a guarantor with a good credit history or bring someone who can co-sign the loan with you. The second person could also be a friend or a family member who enjoys a good repayment history. Since this person co-signs the loan or is a guarantor, it increases your chances of getting a personal loan at the best interest rates. Please note that the guarantor will be liable to pay for your loan if you default.
Provide Collateral:
Personal loans are unsecured loans, which mean that you don’t have to provide collateral to get them. However, in cases when it is challenging for you to apply for one because of a low credit rating, applying for a secured personal loan can be your best bet. This option is preferable as opposed to credit card borrowing which carries very high-interest rates. Please note, lenders have the right to sell you collaterals in case you default. For banks also, having collateral or a secured loan is a better option since it limits their overall credit risk.
Low Loan Amount:
Experts advise that in situations of a bad credit score, you can go for a lower personal loan amount at affordable interest rates instead of a higher amount. The chances of default also lower with a low amount and the banks can take that risk. This option can help you improve your credit score as well in the long run making it easier for you to secure loans easily. Once you repay the lower personal loan, you can avail of a larger loan amount based on your strong creditworthiness.
If you are ready to apply for a personal loan, IndusInd Bank offers one of the lowest interest rates which you can check here. Having a bad credit score isn’t a permanent situation as you can improve it gradually with regular EMI payments for a smaller loan amount.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
