A credit score is one of the first measures a lender considers when you’re applying for a loan in India. It’s this information helps the banks and lending institutions evaluate any individual’s creditworthiness and repayment ability while applying for a loan. So, does it mean that people without credit scores aren’t eligible for a loan? Not at all. A borrower can get an instant loan without credit score or a low credit score. Let’s have a look at how to get loan without credit score.
The Credit Information Bureau (India) Limited is the credit bureau that maintains records of companies and individuals’ credit-related activities, including credit cards and loans in India, specifying their credit score.
A credit score is a three-digit numeric summary of an individual’s credit history that reflects his credit profile. It is solely based on past credit behaviour such as borrowing and repayment habits, as shared by banks and lenders with credit regularly.
A person’s past behaviour is taken as an indicator of their future actions, and hence the credit Score showcases a consumer’s creditworthiness. A high credit score enables cheaper and instant loan approval, while a low indicates vice versa. The credit score ranges from 300 – 900 depending upon various factors like the repayment history, credit card utilisation, the number of times applied for a loan and loans for different purposes of the individual.
Generally, a score between 300 and 699 is considered a bad or low credit score. Banks are unlikely to lend loans to such people, and even if they do, the interest is 0.5%-2% higher. And if the score falls below 700 (mainly due to defaults made in paying off the previous loans), the banks might refuse to offer any loan. For example, when a person applies for a credit card or loan, one of the critical factors lenders check is the person’s credit profile, as depicted by the credit score. Banks usually offer loans to individuals falling within the 750-900. But Fibe can lend you an Instant Personal Loan with a low credit score.
Applying for a loan without credit score is quite tricky, but Fibe makes your work easy by providing loans to individuals even without a credit or credit score.
1. Opt for Collateral Based Loans
Primarily, personal loans are collateral-free and do not require security. But this is only significant if you have a good or high credit score. Moreover, if you don’t have a credit score, you will have to offer security on a personal loan. Despite that, you can pledge any of your valuable assets as collateral on a loan to Fibe. This will make it easier for you to avail of a loan from the lender of your choice.
2. Prove your Creditworthiness
A lender always looks for a creditworthy borrower to approve a loan application. Therefore, if you have a stable source of income, you can easily apply for a personal loan from Fibe. You can even apply if you have a low credit score or no credit score displaying your salary slip or bank statements as proof of your income. In addition, this will prove your ability to repay the loan amount on time.
3. Get a Guarantor/ co-applicant for the Loan
Likewise, you can apply for a personal loan with a co-applicant or a guarantor but make sure that the guarantor has a steady income. If your co-applicant is a family member, you should inform them beforehand regarding your intentions to avail yourself of a personal loan to avoid confusion.
Then the co-applicant needs to fulfil the KYC process with Fibe’s easy-to-use app. They will then check the bank statements and credit history. Then you’re most likely to get your loan application approved if the co-applicant meets the criteria.
4. Apply for a Lower Loan Amount
It’s best to avoid applying for a higher loan amount if you have a low credit score or don’t have one. This is because the lender may either doubt your creditworthiness or charge high interest. But Fibe charges low-interest rates on such loans. This ultimately increases your chances of getting the loan approved.
5. Ask for a NA or NH on your Credit Report from your lender
No History (NH) or History not Available (NA) or on your credit report marks the absence of any previous credit activity and credit in the last 36 months. In such cases, you can avail help from Fibe consultants. They may consider your situation and offer a personal loan at a reasonable interest rate.
6. Bonus Tip: Do it The Fibe way
Fibe makes things easier for you. You will no longer have to wander from bank to bank since it’s challenging to get an instant loan approval without a credit score online in India. We aim to be one of the most user-friendly instant loan apps in India. These are the five documents you need to avail an instant loan online with Fibe:
Individuals can apply for an Instant Loan without credit score at Fibe. You can also explore more Money Management, Investment, Instant Personal Loans, And Financial Wellness Ideas on Fibe for all your needs.