Looking for a Personal Loan on Low Credit Score?
By Anupama Deshpande | December 02, 2019

Credit Score is seen as the measure of checking your ability to repay any loan availed by you in a timely manner. Through your credit score, lenders decide whether the credit can be extended to you or not. Actually, your credit score checks your eligibility for a personal loan in toto. Credit score is a 3-digit numeric summary of your entire credit history that ranges between 300 and 900. Higher the credit score, higher are the chances of getting any loan.

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A credit score which is less than 700 is considered as a low credit score. But the question is how to get a Personal Loan with a Low Credit Score? Still there are some financial institutions and non-banking financial companies (NBFCs) which may offer personal loan to the person looking Personal Loan with a low credit score for which they may charge comparatively higher rate of interest sometimes as high as 30% to 40% p.a. Here are some of the steps which will be helpful for you to answer as to how to get a personal loan with a low credit score?

Though it is really a challenge for you to get a personal loan with low credit score, still there are some emerging new banks and NBFCs which offer you personal loan in such a scenario. If you are able to provide a proof of regular income to the lender then it can help you get a personal loan easily even with a low credit score. If you have higher monthly income then there are more chances of getting a personal loan by the lenders.

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If you want to avail a personal loan without having a good credit score, you can offer the lender a guarantor for your personal loan. In such a case, the guarantor should have good stable income, some property in his name and have a good credit score.

A person with a low credit score is always advised to appy with a person who has a good credit score, as a co-applicant. In scuch case, the chances of getting a loan improve a lot.

With a low credit score, if you apply for lesser amount then the lender may approve your loan application as it will be a less risky proposition for the lender.

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Some lenders also provide a secured personal loan. Secure personal loan means that you need to provide some collateral in order to avial the personal loan. This type of loan can be easily taken by a person even if he carries a low credit score.

While applying for a personal loan, it is always better to check your credit score and try to improve it, if it is on a lower side. It is advisable not to apply immediately with a low credit score and to wait a few months, work on improving the credit score and apply again when the score has improved so that you can avail a personal loan at lower interest rate from a lender.