Among all other loans, a personal loan is one of the easiest loans to obtain if he/she is not a CIBIL defaulter. If you are not on the CIBIL defaulters list, then a personal loan is a good option for you. However, the interest rate on the personal loan is very high. A person can fulfil individual’s monetary requirements with personal loan and can use it for multiple uses such as marriage, buying electronic equipment, vacation and so on.
Why the personal loan is easy to get?
- To get personal loan, there will be no necessity for collateral.
- Personal loan can be given to low income.
- The requirement of documents will be very less for personal loan.
Although personal loan applications are typically handled in a day or less, loan applications for those with a CIBIL default can be declined.
Who are CIBIL Defaulters?
A CIBIL defaulter is someone who has defaulted on previous loans. When an applicant has a CIBIL default, this is the most prevalent reason for a personal loan denial. This indicates that the person has previously defaulted on a loan, postponed EMIs, or has an excessive amount of loan payments owing, resulting in a low CIBIL score. And such individuals are said to be CIBIL defaulters by banking & lending institutions and their personal loan applications are straight away rejected by the credit lenders.
It is a common myth that CIBIL maintains a defaulter list, but it’s not true. Defaulters, on the other hand, find it difficult to obtain a personal loan because they have either missed payments or owe money. There are still some lenders who offer loans to such people. In general, a CIBIL score shows whether you are creditworthy and eligible for a loan or not. The low Credit score makes the banking officials and lenders think that you are likely to default payment in the future.
How to Get a Personal Loan If You’re on The List of CIBIL Defaulters?
It’s crucial to understand that major banks and financial organizations will evaluate your loan application before granting it. Along with your credit history, you’ll need to check your credit score before applying for another financial product. While getting a loan from a bank is far more convenient, your options begin to dwindle if you are on the list of defaulters.
Here we listed some options you can look at, if you need a personal loan for an emergency.
1. Secured Loan
A secured loan, often known as a loan against collateral, is one of the options available to you. You can obtain a loan against security if you have any assets or fixed deposits with your bank. If you fail to make payments, your lender will seize the collateral you’ve pledged.
2. Loan Backed by a Guarantor
If you have a guarantor and are now financially stable, but your credit score is still low, you may be able to acquire a loan. This eliminates the danger that comes with lending you money. Hence, you need to make sure that your guarantor has a good credit score. However, if you default on this loan as well, your guarantor will be responsible for the remaining sum. In the event of a default on your part, their credit score will suffer as well. This is why many people are hesitant to act as loan guarantors.
3. Online Lenders
You can always turn to an online lender if your application is rejected by traditional banks and financial organizations. You can acquire a loan from an online lending platform as they are a little more tolerant when it comes to applicants with bad credit.
4. Withdraw Provident Fund
There’s a reason this fund was created in the first place: to help you secure your retirement. However, if you’re in a tight financial situation and need money right away, you can consider withdrawing your provident fund. You can now only withdraw a portion of this money under specified situations.
5. Salary Advance
If you’re in financial crunch, you can ask your employer for a salary advance. For your employer to consider your request, you will need to defend your request with valid reasons. Being on the CIBIL defaulter’s list will put you at a disadvantage. Before you take out another loan, you should try to pay off the one you’ve already defaulted on.
While there are many possible ways of securing a personal loan as a defaulter, it’s highly recommended to have a clean financial record before you burden yourself with another loan.
