Money combined with flexibility is a matchless solace. Perhaps, that’s the reason why instant loans appeal to those who seek flexibility in the process of getting money. Besides, there is zero to no emphasis on paperwork in the case of instant loans that makes it a go-to for easy cash access.
And, for many of us, personal loans are saviors in times of financial stress. A personal loan is the most convenient loan as it allows you to utilize the money in any area of your life.
Be it a medical emergency, weddings, unplanned vacations, or buying that gadget you have planned to buy for a long time – you can allow yourself to prioritize and spend the money accordingly. However, it’s important to note that it’s granted to both a salaried and self-employed person, although their eligibility criteria vary.
When it comes to loans, it’s crucial to prove your creditworthiness. That’s where credit score steps in. A credit score, being a metric between 300-850, determines your creditworthiness. It denotes a record of your total debt, credit history, and the number of active bank accounts. In brief, it indicates if you’re suitable enough to be approved for a loan or not.
Even though CIBIL or credit score is a deciding factor for loans to be granted, there still are good chances to get a personal loan in the absence of a CIBIL score.
Let’s try to understand CIBIL
CIBIL, currently known as TransUnion CIBIL, founded almost 17 years ago, is India’s first credit rating agency, noting different credit activities of individuals and assigning scores regarding the same. By maintaining credit files of millions of individuals and businesses, it has been establishing clarity of financial code and conduct. A sort of financial health indicator, it fetches data from financial institutions monthly.
It should be noted that CIBIL only forwards meticulously curated credit scores and credit reports to NBFCs and other financial institutions and isn’t involved in any decisions related to money lending. It would be right to call it a filter for applications of loans and credit cards.
There are many other credit bureaus, too, like Experian, Equifax, and CRIF Highmark. However, CIBIL is the highly-rated credit bureau whose scores are extensively accepted across financial instruments in India.
What is a Credit Score?
The credit score is substantial proof of your varied financial activities. A numeric measure between 300-900, a credit score determines your financial conduct. Being an association of sorts before you are even granted a loan, reflects how you have been behaving financially and your responsibility to show up with the loan lenders and lending institutions at the stipulated time.
A credit score in the range of 550-649 is considered decent. However, the range 650-749 indicates that your financial health is well. To feel empowered enough to negotiate and avail yourself of the massive benefits while taking a loan, a credit score in the range of 750-900 is demanded.
If you’re aiming for better creditworthiness and a high probability of availing of a loan of your choice, make it a point to cross the 750 mark of the CIBIL score. Below 750, you’re all in for multiple roadblocks in terms of credit access. It could be that you’ll be granted a loan but with high-interest rates, or your application might not be approved at all.
Further, a credit score consists of 4 parts :
- Credit Enquiries
- Public Records
- Account History
- Credit Summary
All of these are equally important and can be checked to fetch credit scores.
Benefits of having a high credit score:
- A high credit score offers you the possibility of lower interest rates.
- The possibility of being granted a higher loan amount.
- It empowers people to negotiate firmly when it comes to financial matters.
- It assures the lender of the ability of borrowers to pay the money back in the borrowed time.
- It offers the choice of tenure for the repayment of the loan.
- Offers on different types of insurances.
What are the factors that have a direct impact on your credit score?
Some factors that affect your credit score are:
- Hard inquiries are made by a financial company or organization for a credit application.
- Delayed credit payments.
- Applying for loans and credit cards from multiple banks simultaneously.
- Closing a credit card with a pending balance.
- Choosing only one kind of credit card.
- Neglecting credit report errors.
- New to credit services.
What are the factors that do not affect your credit score?
Your employment, income, and age don’t affect your credit score. Soft inquiries – the ones you make to check your credit report also don’t affect your credit score. However, the next time you delay paying your credit card bills and EMIs, do keep in mind that your credit score is bound to suffer.
What does having no CIBIL score imply?
Having no CIBIL score means that you have no outstanding debts with banks or financial institutions. You have no old credit accounts and no credit utilization rate for your credit card- in short, you don’t have a credit history.
Although it might seem a lucrative prospect superficially, having no credit history implies that CIBIL will not be able to rate you and assign you credit scores. This potentially damages your chances of obtaining loans in the future.
Is getting an instant loan without CIBIL possible?
Even if you don’t have a CIBIL score, it is still possible for you to get an instant loan. Let’s look at the plethora of ways to obtain an instant loan without a CIBIL score.
- Proof of a steady source of income:
If you are a first-timer wanting to obtain a loan, it is quite natural that you won’t have a credit history. In that case, you won’t have a CIBIL score as well.
But there are financial institutions that understand this issue, and therefore they need proof of your steady income source to grant you the loan. However, the eligibility requirements and the relevant documentation can vary with every financial institution.
They might need you to have a monthly income over a definite limit, or you need to be employed for a certain period. If you are a self-employed person and cannot furnish salary slips as proof of your income, you can furnish your bank statements of the previous few months to show that you have a steady income and can repay the loan.
- Higher rates of interest:
If you don’t have a CIBIL score and cannot furnish proof of a steady income source, you might still be able to obtain the desired loan. However, in this case, you will have to accept higher interest rates while repaying the loan.
- Joint loan:
If you don’t have a CIBIL score or proof of income, you can still obtain the instant loan by opting for a joint loan. You can choose your spouse or parent or sibling or any other close family member to opt for the loan with. If your partner has a good CIBIL score or proof of steady income, your loan will be instantly approved.
- Getting a guarantor:
If you face a problem obtaining a short-term or long-term loan due to the absence of a CIBIL score, you can compensate for that by finding yourself a guarantor who has an appreciable CIBIL score. The guarantor will vouch for your credibility and creditworthiness and will assure the bank or financial institution that you will pay your loan interests timely.
- Offering collateral:
Although instant personal loans are unsecured forms of credit, you can opt to offer collateral to the lending institution if you cannot furnish income proof and don’t have a CIBIL score.
Since there are no limitations on the end-use of a personal loan, you can offer collateral to the lending organization in lieu of money. It could be any tangible asset like gold or real estate. This will help in the instant approval of the loan.
Although a prominent CIBIL score is a key factor for loan approvals, some financial institutions shift to other areas to understand the borrower’s repayment capability.
There are plenty of online lending companies like Bajaj Finserv, AU Bank, Bank Bazaar. And how can you miss out on exploring Money View when it comes to instant loans with a low CIBIL?
You will notice a shift at Money View because, unlike other NBFCs and other financial institutions, they approve loans for a credit score of 600.
It’s incredible how they make space for your personal loans by trusting you with a credit score many companies don’t deem fit. They employ certain parameters and metrics that are unique to their organization to grant you an instant personal loan, even if you have a low CIBIL score.
And, did I mention, they value your time so much that you get to know if you’re eligible for a loan within 2-3 minutes!
A simple work culture aimed at doing the right thing and serving you the very best financially, as they claim, they are your stop to all the financial needs eating up your mind.
Various factors that contribute to the approval of personal loans
Well, with a low credit score of 600, there are some points Money View emphasizes before granting a loan. Here are some that have been noticed:
- The low loan amount will be granted:
The key point definitely is helping you out financially in a time of need. But, to save you from higher interest rates and establish trust, Money View starts with low amount loans.
- Apply with someone you trust:
If you’re not able to attain a decent credit score, you can still obtain the loan by applying with someone you trust. The person you choose will be verified for the same. In that way, trust won’t be compromised, and your requirements will be satisfied too
- Get someone to guarantee your capability to repay:
There is always someone in your family who trusts your capabilities. So, you can ask any of your family with a good CIBIL score to offer a guarantee on your behalf. This will ensure ease in the loan approval process.
- Provide sufficient proof of steady earning:
Well, whenever some loan is given, the income of the borrower plays a vital role. Income is a robust indicator that the amount borrowed will be repaid on time. Using a proof of income to establish trust would be a great choice.
Applying for an instant personal loan with Money View:
Applying for a personal loan demands a few steps from your side. Here are some to take care of:
- Check the 2-minute eligibility test on the Money View website.
- Choose what plan suits you.
- Provide the documents demanded of you online.
- After verification of documents and loan agreements, the loan amount will be disbursed within the next 24 hours.
Getting an instant loan without a CIBIL score isn’t an easy feat. However, working on attaining a good score and rectifying credit score errors from time to time will bring more ease to the process of accessing loans.