When you need money fast, it can be tempting to turn to online loan apps. But if you have bad credit, you might be wondering if you’ll be able to get a loan.
A low credit score can be a major barrier to getting an instant loan. However, there are a few options available for those with less-than-perfect credit.
Ways to get a loan with a low credit score
1. Get a Personal Loan from CASHe
A great option for borrowers with low credit is to apply for a personal loan with an online lending institution like CASHe that has more lenient eligibility requirements. Moreover, CASHe offers competitive interest rates and an easy loan repayment schedule with good loan terms, making it a great choice for instant personal loans.CASHe calculates a Social Loan Quotient(SLQ) using its patented AI algorithm for credit scoring. In addition to considering your income and credit history, it looks at alternative data sources for a more comprehensive evaluation of your creditworthiness. Consequently, you can apply for an instant personal loan of up to ₹4 lakhs with CASHe even if your credit score is low. The app will require you to provide some basic information and you may be able to get approved for a loan in just a few minutes.
2. Apply with a co-applicant
A co-applicant is someone who applies for a loan with you and shares responsibility for repaying the loan. This can be a great option if you have a low credit score but want to get a loan for a much-needed purpose, like starting a business or consolidating debt.
When you apply for a loan with a co-applicant, the lender will consider both your credit histories in deciding on the loan. This can increase your chances of getting approved, and it can also help you get a lower interest rate.
If you’re thinking about applying for a personal loan with a co-applicant, be sure that both of you understand the terms of the loan. For instance, if you default on the loan, your co-applicant would be legally obliged to repay the loan.
3. Provide income proof
Some lenders might grant you a short-term loan without a great credit score if you can show that you make a high enough monthly wage. You can show proof of income through a recent salary raise, bonuses, interest on savings, and additional income sources. However, a lender may still charge you higher interest rates for the loan.
4. Check your credit report for errors
Credit reports are created by credit bureaus based on your income, credit, and repayment history, amongst other factors. Sometimes a mistake in the system, a misspelt name, or a wrong address can lead to a lower credit score.
To fix this, you can get a free copy of your credit report online from a major credit bureau. Review your credit report and check for any errors or negative information that could hurt your chances of getting approved for a loan. If you find any errors on your credit report, you can request a correction. A higher credit score might help you get over the eligibility requirement and get more easily approved for a loan.
5. Apply for a smaller personal loan amount
If all else fails, you can always apply for a smaller personal loan. If your credit score is low, the lender might not approve your loan. But if you only need a small loan, the lender may be more likely to take a chance on you. By paying off the smaller loan in timely instalments, you can work to increase your credit score and eventually be eligible for larger loans.
6. Contact Your Bank
Banks often offer special loans for people with bad credit, especially if you have been a customer of the bank for quite a long time. You can contact the concerned authority at the bank and explain your situation. If you have a good relationship with the bank, they might give you a loan. If not, the bank would certainly suggest other ways to help you get the money you need.
7. Get a Loan from an NBFC
You can also consider NBFC (Non-Banking Financial Company) if you are wondering how to get a loan with a low credit score. These companies often have easier rules for giving loans compared to regular banks. Many NBFCs only look at your job and income and do not consider your credit score. You can look for such financial companies online to get your loan approved. However, make sure to compare different NBFCs to find the best deal for you.
Tips to Improve Your Credit Score
Here are some tips to improve your credit score so that you can get your loan approved easily:
- Pay Your Bills on Time: If you wish to improve your credit score, then make sure to pay all your bills on time. This includes your credit card bills, loan payments, utility bills, and even your phone bill.
- Keep Your Credit Card Balances Low: Try not to use too much of your credit limit on your credit cards. Using too much of your available credit can make you look like a risky borrower, which can lower your credit score.
- Don’t Apply for Too Many Loans or Credit Cards: If you apply for many loans or credit cards in a short time, it can hurt your credit score because it looks like you are in need of a lot of credit quickly.
- Check Your Credit Report Regularly: Mistakes on your credit report can happen, like a misspelt name or a payment marked late when it wasn’t. These errors can lower your credit score.
- Keep Old Credit Cards Open: Even if you don’t use an old credit card often, it’s usually better to keep it open. The longer your credit history, the better it is for your credit score.
- Avoid Maxing Out Your Credit Cards: If possible, avoid using up the full limit on your credit cards.
- Build a Mix of Credit: Having a mix of different types of credit like a credit card, a personal loan, or a car loan, can help improve your credit score.
Conclusion
Now you know how to get a loan with a low credit score, whether it is for buying a gadget or renovating your home. Regardless, if competitive interest rates and good loan terms are your priority, then CASHe is the right choice for you. One of the leading personal loan apps in India, CASHe offers instant personal loans and pre-approved CASHe limit services with just a few clicks.
Download the CASHe app today!
