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A low CIBIL score does not mean one cannot get a personal loan. Options are still available as low as 550. So, how to increase its approval probability? Let's find out how successfully an instant personal loan application can be made with a low CIBIL score and also how one improves one's financial situation.

Steps to Avail an Instant Personal Loan with a Poor CIBIL Score

1. Show Adequate Income

An assured way to overcome a poor CIBIL score includes adequate income. The lenders can let go of the fact that your credit score stands on the poorer side, provided you are able to prove that your income is good enough to pay the EMIs on time. It could be in the form of:

• A recent promotion or increment in salary
• Extra income due to freelancing or house on rent

Please share your payslips and bank statements as proof of receipt with your lender. That considerably improves the possibility of your loan getting sanctioned despite a mediocre score mark.

2. Apply for a Lower Amount of Loan

If you have a poor CIBIL score, apply for a loan with a lower amount. The lenders prefer to sanction smaller amounts since they are less risky. The idea increases your probability of getting approval for your application and brings less financial liability for you and the lender.

3. Co-Applicant or Guarantor

The involvement of a co-applicant or a guarantor will also work in your favour. A co-applicant-a relative or a friend with a better CIBIL score gets the loan sanctioned by sharing your financial obligation.

With a Co-applicant:

• The lender assesses your and the co-applicant's reliability and improves your loan approval chances.
• You might also get better offers, such as lower rates of interest.

Having an eligible guarantor or co-applicant gives added assurance to the lender while increasing your chances of getting the application approved.

4. Correct Errors in Credit Report

Your poor CIBIL score may result from errors on your credit report. You are required to check your report periodically and correct the errors where found. Following are some of the common mistakes that reduce the rating of your score:

• Inaccurate details of loan or amount
• Outdated payment information
• Duplicate accounts

You are entitled to one free CIBIL report annually; ensure you scan it for errors carefully. Recognising mistakes will significantly improve your credit score, which can lead to the easy sanctioning of loans.

5. NA or NH Status

If your report shows NA or NH, it could indicate that there is minimal to no activity on your credit within the past 36 months. To lenders, this may signal inactivity and raise doubts about lending to you.

You can, however, explain this to your lender by showing them stability in income and continuity at work. This may give you a better chance of approval despite no credit activity lately.

6. Plan Your Repayment Using a Personal Loan EMI Calculator

An individual applying for a personal loan with a low CIBIL score should be very sure about his or her ability to cope with the repayments. Failing to pay the repayments could further damage the credit score.

The Personal Loan EMI Calculator facility estimates your monthly EMI amount based on loan amount , interest rate, and tenure. This gives a fairly better view of your financial obligations and helps you avoid over-borrowing.

Pro Tip: You could try Capital Now's Personal Loan EMI Calculator to approximate your EMIs and plan repayments more easily.

Eligibility for Low CIBIL Score Personal Loans

As eligibility can vary from lender to lender, some common requirements associated with personal loans on low CIBIL score are as follows:

• Income: Most lenders look for an assured monthly income of at least ₹ 25,000, proving your capability to repay the loan.
• Employment Stability: This generally asks for applicants in service that is continuous and for a minimum period of six months in a recognized organization-public, private, or LLP.
• Documents: Recent salary slips, bank statements, and identity proof like Aadhar or PAN cards are required.

For most lenders, a CIBIL score of 550 is considered poor, making it rather challenging to get loans. This is a common myth-one feels that one cannot get a loan with such a low score. While credit score improvement is always advisable, Capital Now understands these situations and offers remedies even for lower scores. If guided properly, you can still get personal loans to meet your needs even when your score is not that good.

Conclusion

An instant personal loan application with a low CIBIL score is challenging, yet it is possible to get approved. You can improve your chances of getting by showcasing adequate income, applying for a lower amount, adding a co-applicant, and correcting errors in your credit report. Besides this, you must have a reasonable repayment plan to keep your credit health in good shape. Capital Now offers instant personal loans for quick and easy application for financial assistance.