How to Get an Urgent Personal Loan With Bad Credit in India

In today's fast-paced world, personal loans have become a popular financial tool to cater to immediate financial needs. Whether it's for emergency expenses, home repairs, or an unplanned vacation, personal loans can come in handy. However, availing of a personal loan with bad credit can be challenging in India.

Lenders use credit scores to assess a borrower's creditworthiness, and a low credit score can lead to loan rejections or higher interest rates. In general, a credit score above 750 is considered excellent, while a score between 600 to 750 is considered average, and anything below 600 is considered poor.

In this article, we will explore some options that can help you get an urgent personal loan even with bad credit in India.

KreditBee offers you a loan even with if you have a low credit score or if you are new to credit.

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Here are Some Measures that You Should Implement to Get an Urgent Loan with a Bad Credit Score

1. Show Repayment Capability

If there’s one thing that any personal lender looks for in an applicant, it’s strong repayment capacity and financial responsibility. Regardless of your low credit score, if you feel that you can pay off your loan EMIs on time without any issues, communicate the same to your lender.

Show the lender that you have a stable job with a continuous income, and it will increase the odds of your loan being approved. If you’ve received a salary hike or a cash windfall recently (in the form of a bonus), tell your lender about it. All of this points to increased repayment ability and can encourage your lender to approve your loan even if your credit score is not top-notch.

2. Ask for a Lower Personal Loan Amount

As you know, a smaller amount is always easier to repay. Asking for a higher amount as a low-credit personal loan from your lender is anyway a risky proposition, as they will be worried about your repayment capacity. If you apply for a higher amount knowing that your credit score is low, it gives out the impression that you will default on your loan. That's why it's always advised to start small. If you start with a smaller low credit personal loan, such as a Flexi Personal Loan, and repay it on time, it will encourage your lender to give you a bigger loan the next time.

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3. Apply with a Co-Applicant or Secure a Guarantor

If you need a personal loan with a low credit score, but the amount is high, getting a guarantor is a good idea. A guarantor is an individual who promises to pay off your debt if you can't clear it on time. He puts forth a guarantee of repaying the loan in writing, which increases the possibility of your lender approving your loan application. Another good thing is that almost anyone can be a guarantor, be it a parent, sibling, spouse, or even a friend. Just ensure that they have a good credit score and steady income.

4. Start Rectifying Your Credit Health

Do you have a habit of checking your credit report regularly for errors? There may be mistakes therein that you may be unaware of. For example, if you've cleared the last EMI on a loan, it may still not reflect on your latest credit report. Instances like these bring down your credit report for no reason. This is why we recommend checking your credit report for errors. You can correct them and boost your credit score. Doing so will increase your eligibility for a low-credit personal loan.

5. Settle with a Higher Rate of Interest

Despite having a low credit score, borrowers can still avail of personal loans from specific lenders who specialize in offering loans to individuals with poor credit histories. However, the loan amount sanctioned in such cases may be relatively less, and the interest rates charged are typically higher. While this may not be the most cost-effective option, it can be considered if you need cash urgently.

6. Get a Loan Against a Collateral

If your credit score is not very good, you may still be able to get approved for a personal loan from certain lenders if you provide collateral as security. The collateral can take various forms, such as shares, real estate, fixed deposits, gold, and other valuable assets. By pledging collateral, you are essentially offering the lender a guarantee that they can seize and sell the asset to recover their money if you fail to repay the loan.

7. Request Your Lender to Consider Your Case with a NA or NH in your Credit Report

When a credit report shows an NA, NH, or a zero credit score, it means that the person has not used credit actively for a period of 36 months or longer. In such cases, individuals may explain to their lenders the reason for their inactivity, and the lenders may consider their explanations and offer them loans, although with a higher interest rate. Essentially, the lender is taking a greater risk by lending to someone with no recent credit history, and as a result, they may charge a higher interest rate to compensate for that risk.

Eligibility to Get a Low CIBIL Score Personal Loan

Income Proof

When you apply for an instant personal loan with low or no credit, the lender wants to ensure that you have a steady income to repay the loan. To prove that you have a good salary, the lender will require you to provide your salary slips for the last three months. This is important, especially if you have a low CIBIL score, as it assures the lender that you have the financial means to pay back the loan.

Income Proof

If you want to qualify for an urgent loan with a low CIBIL score, you must have a job in a private company, public sector enterprise, or a limited liability partnership (LLP). Having a stable job in any of these organizations can increase your chances of getting approved for an instant loan despite having a low CIBIL score.

Tips to Maintain Your Credit Score

Here are some tips for maintaining your credit score:

1. Make sure to make timely payments on all your debts.
2. Keep your credit card balance below 30% of your available credit, and avoid using it for every purchase.
3. Diversify your credit by having a mix of secured and unsecured loans.
4. Avoid applying for multiple loans within a short time frame, and do your research before choosing a loan.
5. Stay active with regular transactions and check your credit report periodically to monitor your credit history.
6. Consider paying more than the minimum amount or making prepayments to reduce interest charges on long-term loans.
7. If you have no credit history, consider score builder loans to establish a credit score

KreditBee loans can be availed of by new credit users also.

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Final Thoughts

Getting an urgent personal loan with bad credit in India is certainly possible. The process is quick and easy as long as you are able to provide the lender with all the necessary documents.

Additionally, make sure to compare different lenders and their terms and conditions before signing up for a loan. Furthermore, be mindful of interest rates and repayment terms so that you can choose the best loan to fit your financial situation.

Finally, remember to always be responsible when it comes to repaying your loans on time.