CIBIL is the acronym for Credit Information Burea (India) Limited. It can be best described as a database which keeps a record of all the credit details and the information regarding loans of the various borrowers in the country. The main function of CIBIL is to provide lenders with a credit information report whenever a borrower applies for a loan. After going through this report thoroughly, the financial entity makes a decision about the eligibility of the borrower. In short, CIBIL ensures that the risk of bad loans is reduced to quite an extent and the economy of the nation does not suffer.Relation between personal loans and CIBILYou would have often heard that procuring a personal loan for CIBIL cases is extremely tough. To understand this phenomenon better, you should know about the association between personal loans and even CIBIL. But, now that we know what CIBIL is, let’s summarize the term ‘personal loan’.
A personal loan is basically a type of loan which can be borrowed from a legal financial entity to fulfill the personal goals and requirements of an individual. But, most of the times, this bank is not exactly secure since the borrower is not responsible for providing any sort of security for this loan. There are a lot of purposes behind borrowing this particular loan. You may need to apply for one to take a holiday, to refurbish your house, buy any particularly expensive item or to fund a wedding in the family- the reasons for taking a personal loan can be many. Now, the CIBIL score plays a huge role in deciding whether you are eligible for getting this loan or not. To start with, this score is the basic proof of your credit worthiness. Getting a personal loan for CIBIL cases can be tough if the borrower does not have the required CIBIL score. The range of this score begins with 300 and goes up to 900. Generally, 750 is considered to be a satisfactory mark for lenders to approve a loan. The higher your score is in the CIBIL score spectrum, the higher are the chances for you to get the loan.
The real issue arises when the CIBIL score is lesser than 750 or very close towards the 300-650 range. This is when getting a personal loan for CIBIL cases becomes extremely difficult.To further elaborate upon how a personal loan for CIBIL cases can be procured, the borrower should start by analyzing why a bad credit score results into a loan denial. The primary reason behind this is the fact that any person with an extremely low score is considered to be a defaulter and it is a yardstick to measure the financial discipline of an individual. If he has defaulted on loans or has not cleared off his dues in the past, it affects his credit score and this is the reason why a person’s CIBIL score is less.Procuring a personal loan for CIBIL casesWhile we would highly advise, that you do not ever have to apply for a personal loan with a bad credit score, we also understand that sometimes it is difficult to avoid the situation. Also, you do not need to be disheartened, there are ways to get a personal loan for CIBIL cases too. We elaborate on the available alternatives in the following section: If you are earning well nowOne of the best ways to get a personal loan for CIBIL cases is by submitting your current employment records. It becomes very easy for employees of Fortune 500 companies to get a loan. Also, there is a possibility that your organization is tied up with some or the other financial institution. Find out about these schemes from your human resources or accounting team so that even if you have a bad score, your current salary can act as a guarantee for your loan.
CIBIL score of your spouse or parents are eligibleSometimes, the banks grant a personal loan for CIBIL cases if they co-sign it with an individual who has a good CIBIL score. This shows financial discipline in one of the signers, which shows that the bank would not need to take a very high risk in order to get their money back. So you can ask your spouse or your parents and get their CIBIL score checked too in order to get a personal loan for yourself with a bad CIBIL score.
Check options for other lendersThere are different options in the market such as a Non-Banking Financial Corporation or a Housing Finance Corporation which offers personal loans for CIBIL cases. You can approach these entities and find out if you can get a personal loan keeping in mind your low CIBIL score. There is also a chance that you get a much better deal here instead of a big financial institution.
See if collateral loans are a possibilityThere is a high chance that you get a loan by putting up a collateral with the banking institution. For example, if you have any gold loans, any fixed deposit, any other security asset which would prove to be valuable to the bank- then you can put it up for the exchange of a collateral loan. This way, you can get your money and if your asset is too valuable, then you would be able to get lower interest rates too.
Try out peer to peer lending platforms
Peer to peer lending platforms has become one of the most preferred lenders for personal loans in today’s day and age. Here, you can connect with many different lenders and get affordable deals for procuring personal loans. CIBIL default is not a huge criterion here and the background check is of course less strict as compared to other banking institutes.
Hence, getting a personal loan for CIBIL cases is not tough at all. As far as you know your options well, you will not have much difficulty.