How to Get an Instant Personal Loan Without CIBIL Score

When applying for a loan, your CIBIL score is one of the first things creditors and banks look at. One of the biggest risks a creditor faces while providing a loan is whether they will get the money back. So, getting a check on creditworthiness is one of the most critical factors while providing a loan.

CIBIL score is a testament to the ability of an individual or a company to repay. The importance of a high CIBIL score cannot be underestimated if you need any form of credit, such as personal loans. The higher the CIBIL score, the better the chances of availing an affordable loan.

However, what if you have a low CIBIL score or no CIBIL score at all? Can you still get an instant loan without a CIBIL score or a personal loan without a CIBIL score? You can. Keep reading to know more!

How to Get a Loan Without CIBIL Score?

There are several ways you can secure loans with a low credit score or no credit score:

1. Reach Out to NBFCs or HFCs

   Non-banking financial companies (NBFCs) and housing finance companies (HFCs) are considered to be the best sources of credit for individuals with low CIBIL scores. Usually, interest rates offered by these institutions are higher than those offered by banks. Still, they are open to giving out loans even with a low credit score.

2. Use Your Salary Slip as a Proof

   If you have a stable salary and income coming in, it can act as a security for banks. Even with a low CIBIL score/ No CIBIL score, you can obtain a loan amount, provided you have stable pay coming in.

3. Collateral Based Loans

   Personal loans are usually collateral-free but only for people with a high CIBIL score. If you have a low credit score, then security is required by banks. In such a scenario, you can pledge any asset at your end as collateral for the loan amount.

4. Get a Guarantor

   If you get a guarantor for your loan amount, it significantly increases your chances of getting your loan approved. If the guarantor has a stable income, it will act as a security for the loan. If you have a low CIBIL score, work towards improving it so that the process of obtaining credit becomes easier with time.

5. Get a NA or NH

   Seeing NA or NH on your credit report indicates that there hasn't been any credit activity for the past three years. It's a good idea to talk with your lender about this inactivity, explaining why it occurred and discussing how you can still get your loan approved. Keep in mind, though, that you might face higher interest rates under these circumstances.

Documents Required for Personal Loan Without CIBIL Score

When applying for a personal loan without a CIBIL score, you'll need some key documents. Start with your PAN number; it's essential. Additionally, be prepared to submit bank statements and salary slips for verification purposes. Once you receive pre-approval, you'll also need to provide identification and address proof to complete the KYC process and finalise your application.

How to Apply for a Freo Personal Loan Without CIBIL

To apply for a Freo Personal Loan without needing a CIBIL score, simply follow three straightforward steps online and receive instant approval with minimal paperwork.

1. First, download the Freo App and register by providing basic information such as your age, city of residence, PAN number, and income to assess eligibility.
2. Once approved by our system in Step 2, we will arrange a KYC visit to your home or office to collect the necessary documents.
3. Finally, in step 3, once everything is verified successfully, you can transfer funds from your approved credit limit directly into your bank account whenever needed!

How can I Improve My Credit Score?

Here is how you can improve your credit score in India:

• Low Credit Utilisation Ratio: If you spend more than 30% of your credit limit, it will negatively impact your credit score. Hence, keep your credit utilisation ratio in check.
• Build Strong Credit History: The longer your credit history, the higher the score, provided you paid all your dues in time. It is also advisable not to close down old credit card accounts so as to elongate your credit history.
• Avoid Applying for New Credit: Do not apply for multiple credit card accounts and loans in a short time. Apply for new credit only if you really need it.
• Pay Your Dues on Time: Missing a deadline on a payment will negatively impact your credit score. Hence, it is advisable to set payment remito as to avoid late payment charges and a drop in CIBIL score.

How to Get a Personal Loan for a CIBIL Score of 550 or Less?

A CIBIL score of 550 or less is insufficient to take a personal loan from a conventional financial institution. This score indicates that you have not been responsible while handling your credit. Most financial institutions need a CIBIL score of 750 or more for a personal loan.

Nevertheless, you can secure a personal loan with a CIBIL score of 550 or less by showcasing proof of a good income, salary hike, responsible spending habits and few liabilities. You can also approach microfinance companies that might be able to provide personal loans with a credit score of 550.

FAQs:

1. Can I get a loan if I am a defaulter of CIBIL?

   When you default on your loan amounts, your CIBIL score is significantly impacted. When you stop making payments for your loan, CIBIL puts you on the defaulter list. This means that getting loans from banks and NBFCs is extremely difficult. Options from where you can secure a loan amount shrink. Here are some of the options that can be explored in such a situation:

   • Loan against collateral
   • Guarantor for the loan
   • Approach an online lender
   • Present salary slip

2. Should I apply for a lower loan amount?

   If you have a low CIBIL score or no existing CIBIL score, it indicates low creditworthiness, and hence, you are a high-risk candidate for lenders. If the applied loan amount is lower, then the lender might feel confident in providing the amount. Also, a lower loan amount will be easier to pay off and, hence, might help improve your CIBIL score.

3. Can I get a personal loan without CIBIL and proof of income?

   Unfortunately, the answer is no. While individuals new to credit might still get loans with higher interest rates despite lacking a CIBIL score, having no proof of income makes it impossible to obtain personal loans. Lenders require evidence of your repayment capability, which comes from your income documentation.