- Can you get a loan if you’ve a credit score (CIBIL) of -1?
- Yes, you can! Read the tips that can help you take a loan in such a case
The renowned credit bureau i.e. CIBIL announces different credit scores for individuals ranging from 300 to 900 in India, based on their repayment behaviour. But there are some who do not have the credit history and are thus assigned -1 score. The same score can also be assigned to individuals having insufficient credit history, meaning they have a repayment track of less than 6 months. Having a credit score of 700-750 and above and a credit history for more than 6 months is paramount to gaining approval to the personal loan you apply for. But you can get a loan even if the score reads -1. Read this post further to know the same.
Ways by Which You Can Get a Loan with -1 Credit Score
Based on Salary or Savings Accounts – Most lenders may deny offering personal loans to individuals with no or insufficient credit history. But if you have a salary or savings account with them, they could think of offering personal loans to you. Not only that, the rate of interest could also be lower.
Working in Top Organizations – If you are working in a top organization for long, your credit score of -1 won’t deter you from getting a personal loan. Working in an renowned organization ensures a regular flow of income and which will be factored in by the bank while disbursing personal loans.
Go for Consumer Durable Loan – Credit score norms are relatively softer when it comes to availing consumer durable loans, which are nothing but a part of personal loans and are availed for buying consumer durables such as furniture, air conditioner, mobiles, gadgets, etc.
Apply for a Loan at NBFCs – If you are denied an unsecured loan at banks owing to -1 CIBIL score, you can apply for the same at any of the NBFCs. The reason being the credit norms are pretty much relaxed here compared to banks. However, the NBFC can charge a greater rate of interest on the loan.
Secured Loan – If you don’t get a personal loan using any of the aforementioned methods, you can go for a secured loan against fixed deposit, life insurance, mutual fund, shares, bonds, or even gold. The rate of interest can be lower than a personal loan as the loan is backed with collateral. So, in case you default, the lender has the right to take over the said collateral in its name and sell it in the market to recover the money. For example, loans against fixed deposits can come with an interest rate of 1%-2% above the applicable rate of fixed deposit booked for a certain period.
Lenders can disburse secured loans either in the form of a term loan or an overdraft. A term loan is repayable via the conventional EMIs or Equated Monthly Installments every month. Whereas, if you get it via an overdraft, you will need to service interest on the utilized amount and not the sanctioned limit. A current account will be set up for the purpose. The overdraft limit will be disbursed there, and if you withdraw anything out of the limit, you will be charged interest on the same. The credit made in your account via salary or any other sources can be used to pay interest on the utilized sum.