When you apply for a Personal Loan in Mumbai, one of the first things leaders do is pull out your credit report and review it to see if you are a good candidate for the loan. If you have a record of loan defaults, you will have a difficult time in finding a bank that will lend to you.
Unsecured Loans and Credit Score
Your credit history is important for any loan, but for unsecured loans, it acquires even more significance. Mostly, Personal Loans and other loans that require no security often have a cut-off score of around 750 to sanction the loan. If you have a good score, you can get instant Personal Loan in Mumbai.
A credit score of 750 and above is possible only if you are a disciplined borrower who always pay their EMIs on time and have never defaulted on loans. If you have failed to repay a loan, had a loan written off, have accumulated pending payments on current loans, you will have a low credit score.
If you take up every loan offer and have too many simultaneous loans, these also affect your credit rating. All these will pull your score to 500 and below. Mainstream banks will not consider Personal Loan applications from you.
What Should You Do?
Go to lending platforms and financial, websites and search for loan offers for people with bad credit scores. You may find a few lenders willing to lend to you, even mainstream banks, if your score is not too low. However, these loans will come at a higher rate of interest and will be for small amounts.
Approach Alternative Avenues
You can approach NBFCs and private lending institutions, or peer-to peer lending platforms. These lenders will not be so strict about your credit score requirements If you can provide proofs of improved financial circumstances, they might consider your loan application.
Increase In Income
If your income has increased from the time you accumulated those bad credit records, show proofs. If you have recently paid off a loan on time, show proof of that. Provide proofs of new savings and investments.
Get a Joint Loan
If your spouse or sibling has a good credit score and is willing to be a co-borrower, apply for a joint loan..
Get a Guarantor
If you have lost your job or you do not have the minimum salary required to get a Personal Loan, try to get a guarantor. If you can find some friend or relative who trusts you enough to sign as guarantor for a loan, you can apply for a Personal Loan. Don’t apply for a large amount, just get what you need for now.
Get a Personal Loan documents checklist, and keep ready all the required papers to speed up the loan approval process. Make a plan for repayment of the loan and follow the plan strictly. Pay off this loan and with your new credit score, you might get your next loan by yourself, at favourable terms.