Life is uncertain and unpredictable. No one knows when you will need urgent cash for personal purposes like a wedding, healthcare, or education. A personal loan can be the best financial assistance during an emergency. However, your CIBIL score is important to get a personal loan. A high CIBIL score (above 700) makes it easy to obtain a loan. But how will you secure a personal loan with a CIBIL score of 700? Credit card holders with this score can still apply for a personal loan.
Are you eligible for a personal loan with a CIBIL score of 700?
Identify the amount you need. Your first task is to know your requirements and check your current cash flow. You can apply for a personal loan despite your low credit score.
Look for a lender who provides an instant personal loan despite having a low CIBIL score. However, because your CIBIL score is 700, some lenders will charge you a slightly higher interest rate.
Some applicants make the mistake of applying for loans from multiple lenders. They think that it would increase the chance of getting the loan approved. However, it hurts their credit reports.
Make sure that you have your documents ready after applying for a loan with a 700 CIBIL score. Any incorrect or missing documents can result in the rejection of your application. So, your documents are highly important for obtaining personal loan approval.
Different ways to secure a personal loan with a credit score of 700
Set the minimum amount for the personal loan–
As your CIBIL score is low, you should avoid applying for a large loan amount. It makes you risky to your loan provider. From the lender’s perspective, a low score indicates that you may not be able to make a repayment at the right time. So, it is safe to ask for a low loan amount for your personal needs.
Correct your credit card mistakes–
There is a risk of errors in the credit report. It happens when the latest records are not updated. A minor mistake in your credit report can affect your score. After correcting the report, you can find a higher CIBIL score.
Submit your income evidence-
Your current credit rating may be low. But, recently, you have had a hike in salary. Or, you have found a passive source of income. Thus, showing your income evidence can convince the lender to provide a loan. Let the lender know that you have a consistent source of income. It is one of the best ways to receive personal loan approval.
Choose a co-applicant while applying for the loan–
With a guarantor/co-applicant, you can jointly apply for a personal loan. Take permission from your guarantor and manage the KYC formalities. Both applicants have to sign documents and forms. Ensure the co-applicant has a high CIBIL score to get the loan faster.
Would a 700 CIBIL score make you a high-risk lender?
Although you will be eligible for a personal loan with this credit score, lenders will consider you a risky borrower. That is why they may sanction a small amount of credit. Moreover, the loan tenure may be short, and as a result, you will have a financial burden. The lender will ask you to choose collateral before granting the loan.
How to increase your CIBIL score
There are some ways to maintain a high CIBIL score:
Repay your dues at the right time–
Pay your credit bills and find a higher credit score. The credit card statement shows your late payment. The minimum amount due should be less than 5% of your credit bill. But it results in taxes and interest in the subsequent billing cycle. So, pay your dues on time and avoid debt.
Limit your credit usage–
Try to use less than 25% of your credit card limit to prevent a negative effect on your credit limit. Paying the credit card due in advance is a good decision. You can also set a high credit limit to increase your credit rating.
Never apply for multiple credit lines–
Opening more credit lines will increase your credit limit. However, every time you apply for a new credit line, your credit report will show a hard inquiry.
Choose credits of different types–
Those who have not obtained any credit find themselves with comparatively low scores. They also face challenges in securing a loan. So the best trick is to add varying credits to your portfolio. It will increase the chance of increasing the credit score.
Do not remove past loan information from the report–
Your current credit report shows everything about your credit behaviour in the past years. The lender will then grant your loan accordingly. Records of your past good loan accounts will positively affect your credit report.
Do not apply for several credit cards–
Although credit cards are useful for a loan application, too many credit cards will affect your CIBIL score. When you make high-value deals, it will be counterproductive. So, while applying for a new credit card, you must review your credit eligibility. Send your loan application to a financial institution with a high chance of approval.
To sum up, some lenders give you a personal loan with a CIBIL score of 700. But there are some disadvantages to applying for a loan with a low credit score. Therefore, you should try to increase your CIBIL score to get the loan at a good interest rate. A high credit score removes your concern about getting a personal loan from any private lender. Do you like to apply for a personal loan online? Piramal Finance is the best destination to obtain this loan at a reasonable interest rate.