In the modern age, many financial institutions are willing to lend money to people with good credit scores. If you have a good credit score and a stable income, it won’t be a hassle to get a personal loan. However, it might not be ideal for those with poor credit scores or who don’t earn much money from their jobs.
In such cases, banks will only be willing to extend small loans to help you deal with certain obligations or urgent expenses. Obviously, this is not the best option since it can cause trouble in the future when you need more money and your credit score isn’t as great as before. Therefore, if you still want to take out a personal loan even though your credit score isn’t very high, what factors will determine how much you can borrow?
What is a personal loan?
Personal loans are one of the many financial solutions to help you get out of debt or boost your savings. A personal loan is a loan given to an individual for personal use. Most of the time, this loan is used to pay for small expenses like buying a car, fixing up the house, paying for school, etc.
Besides helping you get out of debt or save money, most personal loans can also help you with your finances if you use them responsibly. Therefore, understanding how much credit you can get from a lender and what type of loan it is—that’s the question! We’ll talk about some general information about personal loans and what lenders look at when deciding whether to give them.
What is the importance of a CIBIL score for a personal loan?
A CIBIL score is an index that shows a good credit history. It is used to evaluate the economic situation of the applicant. It is calculated using the past six years of available data, such as credit history, current assets, and any ones used for borrowing money. The CIBIL score ranges from 0 to 100. A high CIBIL score means that you have a good credit history. This makes it easier for you to get a loan in less time.
The CIBIL score plays a significant role in personal loans. A CIBIL score for a personal loan is used to determine whether applicants will be eligible for a loan or not. In addition, it helps lenders assess the risk associated with the loan. This way, they can help you get a better deal.
Eligibility to take a personal loan
For Salaried Individuals: There are three eligibility factors for those working for an organisation. These are
- The minimum age of the applicant must be 21, and the maximum age must be below 60 at the time of maturity of any loan.
- The applicant must have worked for at least 2 years, out of which they must have worked in the same organisation for the past year.
- The applicant must be earning at least Rs. 7,500 per month.
For entrepreneurs or self-employed individuals: These are the following eligibility factors for self-employed individuals:
- The minimum age of the applicant must be 25, and the maximum age must be below 65 at the time of maturity of any loan.
- The applicant must have worked in the same field or business for at least 3 years.
- The applicant must be earning at least Rs. 100000 per month.
With a CIBIL score of 550, how much loan can you get?
A CIBIL score measures a borrower’s financial strength. Lenders use CIBIL scores to gauge the likelihood of default among borrowers. A high CIBIL score indicates that the borrower is likely to make timely payments, while a low score suggests the risk of default. This is how getting a personal loan with a low CIBIL score is difficult.
If you’re looking for a personal loan for CIBIL score of 550, that will be one factor that impacts your ability to get approved for financing. Lenders are increasingly using CIBIL scores to determine whether or not to approve you for a loan, so you must keep track of your financial situation and remain as transparent as possible throughout the process. With a credit score of 550, it could be difficult to get approved for a loan. This can put you at a disadvantage when it comes time to negotiate the terms of the loan and pay off interest over time. However, you can still get a loan between Rs 1,00,000 and Rs 5,00,000. Some lenders will allow borrowers with lower credit scores to pay over time instead of upfront. This lets borrowers make their payments easier to handle over time and could save them money on interest.
Personal loans are one of the most popular options to help you through hard times. Personal loans are easy to get; they don’t require a lot of paperwork and can be paid back quickly. However, personal loans come with big risks, so it’s important to do your research before getting one.
It can be difficult to get approved for a personal loan. As a result, some people may be surprised to learn that they have been approved for a loan even though they have low credit scores and little to no income.
If you’re looking for a personal loan for CIBIL score of 550, that will be one factor that impacts your ability to get approved for financing. Lenders are increasingly using CIBIL scores to determine whether or not to approve you for a loan, so you must keep track of your financial situation and remain as transparent as possible throughout the process.
Piramal Finance offers easy personal loans with zero payment and foreclosure charges to help those with lower CIBIL scores. Any salaried employee with a minimum monthly income of Rs 7500 can apply. Now get personal loans hassle-free from Piramal Capital & Housing Finance Limited.
Also Read: Applying for a Personal Loan in Indore?