Personal Loan For Low CIBIL Score

Securing a personal loan for a low credit score is absolutely possible, but sometimes can be challenging. Credit score serves as a pivotal factor and basis that lenders consider while evaluating your creditworthiness.

However, a low CIBIL score doesn't show the end of your financial options. It signifies a lower credit rating, often attributed to past irregularities in credit repayments, defaults, or debts. Despite this setback, several financial institutions offer personal loans for individuals with low CIBIL scores. One such platform is Buddy Loan. Buddy loan is a loan service provider that helps you to avail of personal loans from top trusted lenders.

Read further to understand lenders that specialize in assisting individuals with lower credit scores comprehend the challenges faced by borrowers in securing traditional loans.

Interest Rates For Low Credit Personal Loans

Here is the interest rate for a personal loan considering factors like low CIBIL score.

Interest Rate 11.99%* p.a. (Onwards)
Loan Amount ₹10,000-₹15Lakhs
Loan Tenure 6 years
Processing Fee 0.5% - 4% of the loan amount
*The interest rates are subject to change and depends on the lenders. Do visit the official website.

Types of Personal Loans Available for Low CIBIL Scores

Here is the personal loan you can avail with a low CIBIL score :

Secured Personal Loans : These loans require collateral such as property, gold, or a fixed deposit, reducing the risk for lenders and potentially allowing individuals with low credit scores to qualify.

Guarantor-based Loans : Individuals with low credit scores might secure loans by involving a guarantor with an excellent credit history, assuring the lender of repayment if the borrower defaults.

Peer-to-Peer (P2P) Loans :P2P lending platforms connect borrowers directly with individual lenders, sometimes offering personal loans with flexible eligibility criteria beyond just CIBIL scores.

Payday Loans : Short-term loans are usually granted without extensive credit checks, providing immediate cash, but they often come with higher interest rates and stricter repayment terms.

Credit Union Loans : Some credit unions consider other factors besides credit scores, allowing members to access personal loans with favorable terms based on their relationship with the union.

Other Finance Options : Some financial institutions and online lenders specialize in offering personal loans with adjusted criteria, considering income stability or employment history rather than just credit scores.

EMI Calculator Personal Loan For Low CIBIL Score

An EMI calculator proves beneficial for individuals with a low credit score seeking a personal loan. Despite the impact of a low credit score on interest rates, this calculator helps estimate potential repayment structures. By inputting varying interest rates and tenures, borrowers can expect monthly installment amounts, aiding in budgeting and financial planning.

The EMI calculator empowers individuals to assess workable repayment options, align their budgets, ‌and make informed decisions about loan tenures despite facing credit score challenges.

Monthly EMI 86
Principal Amount 1,000
Total Interest 32
Total Amount 1,032.00

Year Month Principal (A) Interest (B) EMI (A+B) Balance Loan Paid to Date (%)

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Eligibility Criteria For Personal Loans with Low CIBIL Scores

The eligibility criteria for personal loans with low CIBIL scores might vary among lenders, but ‌here are the key factors considered:

  • Stable Income : ₹15,000 for repayment capacity.
  • Employment Stability :Borrower has to be employed at their current organisation
  • Debt-to-Income Ratio :35% or less
  • Nationality : Indian

Documents For Low CIBIL Score

If you are planning to avail a personal loan with low credit score, then here are these documents help lenders assess the borrower's financial stability and repayment capability, despite a low CIBIL score.

  • Identity Proof: Aadhar Card, Passport, Voter ID, or Driver's License.
  • Address Proof: Utility bills, Rental Agreement, or Passport.
  • Income Proof: Salary slips, bank statements, or income tax returns.
  • Employment Proof: Employment certificate or appointment letter.
  • Financial Statements: Bank statements, PF statements, or any other asset details.
  • Guarantor Documents: If applicable, documents of the guarantor supporting the loan application.
  • Collateral Documents: When you have a low credit score, you may have to provide documents related to the collateral.

Understanding Impact of Low CIBIL Scores on Personal Loans

Individuals with low CIBIL scores might face hurdles in obtaining loans swiftly or at competitive interest rates, affecting their financial flexibility and borrowing options. Here are key pointers highlighting the impact of low CIBIL scores on personal loans:

  • Limited Access to Loans : A low CIBIL score restricts access to various loan options due to increased risk perceptions among lenders.
  • Higher Interest Rates : Individuals with low credit scores often face higher interest rates on personal loans, making borrowing more expensive.
  • Reduced Loan Amounts : Lenders might offer smaller loan amounts to applicants with low CIBIL scores to minimize their risk exposure.
  • Loan Rejections : Low credit scores often result in loan rejections, as lenders are hesitant to extend credit because of perceived repayment risks.
  • Impact on Financial Flexibility : Limited access to loans at favorable terms reduces financial flexibility for individuals seeking funds for various purposes.
  • Challenges in Loan Approval : Lower credit scores create hurdles in obtaining loan approvals swiftly, leading to delays in accessing necessary funds.
  • Credit Terms and Conditions : Individuals with low credit scores might face stringent terms and conditions, affecting the overall borrowing experience.

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Choosing the Right Personal Loan with a Low Credit Score

Here are key pointers on choosing the right personal loan when dealing with a low credit score:

  • Interest Rates: Compare interest rates offered by different lenders. Look for institutions offering comparatively lower rates, even for individuals with lower credit scores.
  • Loan Terms: Evaluate the loan terms such as tenure and repayment options. Choose a tenure that aligns with your repayment capacity and opt for flexible repayment terms.
  • Fees and Charges: Consider the associated fees and charges, including processing fees, prepayment penalties, and late payment charges. Assess the impact of these on the total cost of the loan.
  • Collateral or Guarantor Requirements: Assess the feasibility of providing collateral or involving a guarantor if the loan requires these arrangements. Determine the impact on eligibility and loan terms.
  • Credibility of Lender: Research the credibility and reliability of the lender. Opt for reputable financial institutions or lenders known for transparent dealings and customer-friendly policies.
  • Loan Amount and Eligibility: Determine the loan amount you require and check if lenders will offer it based on your eligibility criteria, considering your low credit score.
  • Impact on Credit Score: Understand how timely repayment of this loan could positively affect your credit score. Some lenders might offer options to improve credit scores through regular payments.

Steps to Apply For Personal Loan With Poor Credit History

Availing a personal loan with a low credit score can be challenging, but Buddy Loan provides avenues for those with poor credit history to apply. Here are the steps to apply for a personal loan through Buddy Loan despite a low credit score:

Step1: visit or Download & install the Buddy Loan app (Android or iOS).

Step 2: open the Personal Loan Application Page. Provide the mobile number and enter the received OTP.

Step 3: specify the desired loan amount & personal email. Next, choose the Personal Loan option

Step 4: choose the employment type (Salaried, Self-Employed, or Student) and the salary mode (bank or cash).

Step 5:enter your work details (Including company name, years of service and Designation)

Step 6: enter your personal details (Including Full Name, PAN, address DOB & Gender)

Step 7: provide your communication address, and income details and Click the ‘Submit’ button.

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Frequently Asked Questions

A CIBIL score is a credit rating showing creditworthiness. It's crucial for lenders to assess your repayment capability for a personal loan.

Yes, but securing one might be challenging, and it could cause higher interest rates or reduced loan amounts.

Timely payments, reducing credit utilization, and rectifying errors in credit reports can gradually enhance your CIBIL score.

It's possible, but getting a consolidation loan with a low CIBIL score might come with higher interest rates or stricter terms.

Typically, a CIBIL score below 650 is low and may affect loan approvals and terms.

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