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  • Category: Banking

    Loan for low cibil score from any bank of finance company


    Planning to get a loan? Wondering what to do if cibil score is low and still need a loan? On this Ask Expert page you can go through the advice provided by our experts to get the loan.

    I am central government employee from New Delhi.
    My cibil score is very low. Can I get loan from any bank or finance company or any private loan provider in Delhi or in India?
    Can you provide tips to increase my cibil score.
    My net take home salary is Rs.28028/-
  • Answers

    4 Answers found.
  • The following points are very important for improving the CIBIL score.

    1. Never default paying EMI. You should pay the EMIs of all the loans you have taken in time. You should not get it delayed.
    2. Don't keep balances in payment of your credit cards. Even though you have higher limits don't use more than what you can repay. If you are regular in this payment your CIBIL score will increase.
    3. Don't go on changing the credit cards. keep one or two standard cards and keep them for years together. Then your rating will increase.
    4. Don't use the credit card limits fully even though you have the limit. I feel we should utilise maximum 60 to 70% of the limit that too if we can repay without any defaults.
    5. Try to get the credit limits on the banks enhanced. There is no rule that you have to use it. But if you are eligible for higher limits your CIBIL score will increase.
    These steps will help you in increasing the CIBIL score.
    Coming to the question of getting a loan, there are many banks and financial institutions offering loans even though your CIBIL score is low. Private finance companies will give you a loan but the rate of interest will be very high. Even regular banks also will give a loan but the rate of interest will be high if you want a personal loan. You can try the following options for a loan with a low CIBIL.
    1. You can take a loan by offering some collateral security like gold or house or property.
    2. If you are working in a company you can try with the bank which is providing CC limits to your company and having a good relationship.
    3. You can get the guarantor signature of a person who is having some deposits in that bank.
    4. You can go for a joint loan with your spouse or any other earning member in your family.

    drrao
    always confident


  • CIBIL score is an indicator of credit repayment compliance by a borrower, which is one of the basis banks or credit institutions decide to lend-especially to individual borrowers.

    CIBIL is an approved credit rating agency. As clear from its original name-Credit Information Bureau India Limited- CIBIL gets reports of credit availed and repaid by a borrower. The information is pooled and analysed and tabulated with reference to the credit source and category. The lending by a credit institution is now linked to a master database sourced by the credit rating agencies like CIBIL.

    A lending institution seeks credit rating on a prospective borrower from CIBIL gets the credit score and details of that prospective borrower. The lending institutions that have arrangement with CIBIL can directly access the same online. An individual also can get his CIBIL score (Please read the article in Indiastudychannel.com "How to Apply for Your Credit Score from CIBIL").

    A score of 750 and above on scale of 900 is considered a good score. The higher the CIBIL score the higher the probability of getting a loan.

    In the question there is no mention what is the CIBIL score. Lower CIBIL score means the lending has more risks to the bank/credit institution. However the lender will closely analyse the score and find what is the main risk. Then i other parameters are okay the lender may prescribe some 'risk mitigating measures' like suitable and sufficient collateral security, third party guarantee, undertaking from the employer , pledge of liquid securities etc.

    How to improve CBIL score?

    The parameters affecting credit score are:
    1. Repayment history -Default or delay in repayment: So to improve credit score one has to be very regular in repayment of loans, paying the EMI on or before due date.
    Those who are regular in repayment tend to get pre-sanctioned loan/credit card offers from banks.

    2. Prudence in borrowings: One should not have too many borrowings. Too many credit cards, many loans etc show that the person is not a prudent borrower and can signal risk of over borrowing to a new lender. Hence if you are having to many loans, it is better to close a few or consolidate them to reduce number of loans or borrowings.

    3. Category of borrowings: If the credit shows that the borrowings are of high interest rates, then that means the person is not able to command low interest borrowings and that signals risk. More personal loans and credit card borrowing is not seen as a good signal. But if the borrowings is a prudent mix of personal loans, housing loans and credit card with regular repayment and very prudent use of credit card then that is considered favourable.
    To improve CIBIL score one should reduce overdrawing from credit card, pay credit card bills sufficiently before due date, and restrict borrowings well below the maximum credit allowed.

    4. Percentage of EMI/repayment commitments to gross income: Usually banks prescribe that a person should have take home salary at least 50% of his salary earnings. That is the total of repayment/EMI should not be more than half of his gross salary. In this question, as the net take home pay is 28028, the repayment of all loans should also be about 28000/-. If more, then the borrower should convince the lender bank how he will manage his regular family and domestic expenses and to have a normal life.

    Before going to borrow one should evaluate and ensure whether the borrowing is really needed, whether his income is sufficient to repay the monthly instalment regularly before due date, and whether he has a cushion to tide over unexpected emergencies like delay in salary etc.

  • CBIL score determines the credit worthiness of a person. The official website of CBIL will give one's CBIL score depending upon ones credit related history pertaining to bank loans, credit cards repayment, number of loans taken etc. The CBIL score ranges from 300 to 900 that is low to high. If your CBIL score is low it means that you might have defaulted on loans and not paid your payments in time. Now whenever you will approach a financial institution for loan they will have apprehensions about your repaying it because of your low CBIL score.

    Now if you want to improve your CBIL score then you must be very attentive and alert in paying your monthly credit card bills or other utility bills in time. If you follow these precautions for some time then your score will start going up. Once it reaches a comfortable level you can definitely apply for a loan from bank or NBFC.

    You are in Govt service so to get a loan should be relatively easier for you. The quantum of total loan amount is also related to your salary. For example in you case as the salary is around Rs 28000 per month, the admissible home loan amount will be about Rs 16 lakhs.

    Knowledge is power.

  • CBIL score determines the rating of a borrower in the process of clearing loans taken from different financial institutions including the Banks. Any lapse or slackness in making such payment may cause the down gradation of the ratings of Borrower. A low CRISIL rate means that scoring is as low as 300 and the scorings in the range between 800 and 900 would be deemed as the satisfactory quotient in terms of CRIIL.
    Improvement of the rating is the only solution and this needs promptness in repaying the existing loans. Ensure that loan instalments are paid in time and so would be case with other utilities bill. Avoiding the defaults in the process of repayment of the loans would automatically improve your CRISIL score.
    In case of having a low CRIL score, you may get your loan sanctioned with the provision of a guarenter, or by mortgaging some gold ornaments or some household property for which its asset - value is judged by a reputed CA and the same has been reviewed and approved by the Banking - authorities.


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