How to get a loan with a low CIBIL score

So you have a low CIBIL score and still want to apply for a loan. Follow the following steps to be able to have access to credit facilities:

  1. Check your CIBIL report thoroughly for any negative flags or more importantly an error since errors can lead to serious implications and result in loan application getting declined.

  2. In case you have had repayment issues in past and have unpaid amounts due on your accounts, please contact the concerned lender and pay them complete dues till date. Any outstanding past the due date again will have detrimental impact on your credit health and thus lead to underwriter declining your credit request.

  3. Once you have paid off your dues to the lending institution, they shall give you a letter of no dues. Do ensure that the letter being given by the lender explicitly states that the negative flags like “Settled” or “Written Off” on the particular account will be removed from the credit bureau report. Continued reflection of these negative flags again will lead to rejection from banks and thus making the availability of funds inaccessible.

  4. Errors on credit reports are common. Please check your report thoroughly. If you find any error on your report, please contact the concerned lending institution and CIBIL, and raise a ‘cibil dispute’.

  • On doing so, the CIBIL will forward the request to the financial institution that has reported the data.

  • Upon getting a clarification from the concerned lending institution, the credit bureau shall rectify the records. This shall in turn lead to improvement of your credit score.

  1. Remember that while your credit score plays an important role in the loan approval process, other factors are also taken into consideration by a lender.

    • This is especially true for loan products.

    • It is likely that a low score may mean approval of a loan at higher interest rates, or with other mitigating measures.

  1. Consider trying to better your credit score by getting professional help. A higher score will not only lead to you getting funds at the time of need, but also at a better rate of interest. A lower interest getting charged on your loan will result in substantial savings.

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