How to get loans even with a low credit score
Whether you need to pay back a sizeable medical bill, fund your child’s wedding, or are looking forward to taking your family on vacation, you can get quick, ample funding via a personal loan. Normally, lenders offering personal loans in Chennai will first evaluate your credit score before approving your application. Being an unsecured loan, your credit history gives the lender vital information regarding your repayment abilities and is a key determinant in your application’s approval.
That said, if you have a history of defaults, you need not forgo funding through this method. You can still avail a personal loan by proving to your lender that you can make timely payments. Here are five smart tips that will help you get a loan when you have bad credit history.
Instead of applying for a personal loan in Chennai immediately, defer your application. Utilise this time to make repay outstanding debt diligently. Taking this step will help you boost your credit score, which will in turn help you get a personal loan in the future more easily. It will also prevent loan rejection, which in turn, has a positive impact on your credit score.
While your debt-to-income ratio should remain below 50%, consider dropping it to around 30% or lower in order to assure your lender of repayment. This is important because lenders judge your repayment capacity by considering your monthly income in relation to the overall debt that you are currently paying. If this figure works in your favour, you may be able to obtain a personal loan in Chennai even though your credit history reads poorly.
In the event that your lender still refuses approval and you urgently need of funds, consider applying with a creditworthy co-applicant. By leaning on the credit score of a second person, you are likely to be able to obtain a personal loan more easily. Once your lender is satisfied that as team you can repay the loan, you can expect approval for your application.
Personal loans are usually unsecured. That’s why personal loan eligibility criteria will not list ownership of a valuable asset as a requirement. That said, you can ask your lender whether you can obtain personal loan financing by pledging an asset. This would reduce the risk involved for the lender and result in a win-win situation. When you are sure of being able to repay the loan on time, consider offering car or gold as collateral.
In the event that you’ve made changes since your credit history was last updated, bring it to the attention of the lender. For example, if you’ve switched to a job with better pay, you can talk to your lender and explain that your current earnings change the game and put you in a position where you’ll be able to comfortably repay the loan. You may not only secure a loan, but also get one at a favourable personal loan interest rate.
Finally, to get financing on simplified personal loan eligibility terms, consider applying via a pre-approved loan offer. This slashes processing times and hastens disbursal as well. Check your pre-approved offer from Bajaj Finserv to get an instant personal loan on customised terms. This is a convenient way to get a loan when your credit history isn’t ideal as you get a loan deal that takes your current circumstances into account.
By availing Bajaj Finserv Personal Loan in Chennai, you can get financing up to Rs.25 lakh for 12 to 60-month tenor. Further, the flexi loan facility lets you borrow from your sanction in parts and pay interest only on the amount utilised. It lets you make prepayments at zero extra charges and helps you reduce financial stress by paying interest-only EMIs through the tenor and the principal at the end.
Don’t let your past credit mistakes stop you from obtaining financing. Instead, make use of these five tips to get a personal loan in Chennai.
- 1 How to get loans even with a low credit score
- 1.1 Refrain from applying immediately and work on your credit score
- 1.2 Keep your debt-to-income ratio low so as to make repayment easy
- 1.3 Apply with a co-applicant who has a good credit score
- 1.4 Find out if you can obtain loan by pledging collateral
- 1.5 Demonstrate your lender that you have enhanced repayment capabilities