When you apply for a loan, the lenders or the bank look for numerous factors before approving the loan. However, if you have a bad credit score, then this can be a troublesome process for you at some point in time. But what if we tell you that you can still get the best possible loan for yourself even if your credit score isn’t that good?
People might have told you that you simply can’t get a loan with a bad CIBIL score or credit score, but that’s the complete story. There are many other ways through which you can apply for a loan and most probably get one approved.
Tell your bank that you’ve enough sources of fund to pay the EMI
This is one of the best options when you have a bad credit score, that’s why it tops the list here as well. It can be anything – a hike in the salary, any other additional constant source of income, etc. Some banks do consider your application for a loan with this as a plus point even if your CIBIL is not good.
Usually, the rate of interest is higher in such a case.
Go for a reasonable loan amount, not a big one
When a bank or any lender approves a loan for someone with a poor credit score, it only increases the risk for the lender. If you think like a lender, you will understand that he might consider a scenario where you may end up being a defaulter, which means unable to repay the amount of loan.
Therefore, if you will apply for a huge amount with a poor credit score, then your application will be rejected most of the time. It would be wise enough that you shouldn’t apply for a big amount of money and keep your expectations realistic to get your loan application approved.
Keep updating your credit report regularly
There are some cases where a credit score report has some errors. Most of the time, an application is rejected due to such errors too. Sometimes, the report has not been updated with the latest information which misleads the bank or the lender to get your accurate credit score.
In such cases, the applicant suffers the most without any of his mistakes. To safeguard yourself from such a mishap, you can check your score online by yourself. There are numerous tools that will help you do this task for free.
By regularly updating your information, you can actually boost up your score and increase your chances to get a better loan amount.
Ask your bank to consider the NA or NH in the report
NA or NH in the credit report says about the unavailability of the previous credit activities of the applicant. This usually tells the lender about the past thirty-six-month record.
So, you will not have a credit score in this case. Therefore, your credit score cannot be considered here. However, the bank will be ready to sanction your loan with a bit higher rate of interest.
This was the last and also one of the most common ways of applying for a loan with a poor credit score. Your funds will play a major role in this process. So, make sure that you have enough funds to repay the loan amount and the installments on time.
If you have any confusion regarding the amount of EMIs that you are going to pay by this method, you can calculate the amount with EMI calculator tools. It will help you know the amount in advance before actually applying for the loan.
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