Getting a loan in itself is a very difficult process. Your monthly income, tax returns and other financial information are scrutinized by the lender. You are put under the microscope for every small detail before approving a loan.
In fact, most of the loan applicants are squarely rejected by the banks because they don’t meet the loan criteria set by the banks.
But getting a loan becomes even more challenging if you have no credit history. You are very new to personal loans, and it is quite obvious your credit score is going to be zero, and no bank or NBFC is going to lend you.
If you are a college student without a job, what do you do in such a situation?
Well, in the following article, you will learn how you can get access to an instant loan without CIBIL or any kind of credit history.
So let us begin …
What is a Credit Score?
If you are taking a loan without any collateral, then to determine your eligibility as an applicant, you will be checked for your credit score.
A credit score is basically a three-digit numerical summary of an individual’s or business’s entire credit history. Credit Information Bureau Indian Limited, popularly known as CIBIL, duly records the CIBIL score of individuals to assess whether they can repay their loans in due time.
Banks and NBFCs share their credit data with bureaus like CIBIL or Experian so that credit scores can be calculated.
In simpler words, if you are applying for a loan without any income proof, then you may get approved based on your Credit Score.
So that’s the importance of a credit score.
What Does Low Credit Score Mean?
But what do you do if you have a very low credit score or NO credit score at all?
Normally in India, Credit Score ranges between 300 and 900. Anything below 750 points is considered to be a low credit score.
Having a good Credit Score means an individual has a history of timely repayments and is more creditworthy than others. To put it simply, a person with a good Credit Score is more likely to get a loan than a person with a low Credit Score.
However, this doesn’t mean that an individual with a low Credit Score or No Credit History can’t secure a loan. There are many options available for persons to get a loan with a low Credit Score or even without a Credit Score.
In this article, you will learn exactly that.
How to Get an Instant Loan without a Credit Score?
For individuals with a high credit score, getting a personal loan is a very quick and easy process. But if you are an individual with a low credit score or even without a credit score, getting approved for a loan is going to be a very daunting task.
However, there are a number of ways to get an instant loan for people without a Credit Score in India.
Some of them are following …
Apply with a Guarantor
The simplest way to apply for an instant loan without a Credit Score is through a Guarantor. A guarantor can be your parents, siblings, spouse and even your close friends. However, your guarantor must have a good credit score.
Apply with an Income Proof
Even if you don’t have any credit history, you can still get a loan if you earn a good income monthly. You have to show your income proof, such as a salary slip, profit and loss statement or TDS certificate.
You can also show additional income proof such as bonus, increment, saving interest, etc.
Apply for Secured Loans
Another possible option is applying for a secured loan, also known as a Collateral-based loans.
Secured loans are asset-backed loans and are offered against collaterals such as deposits, property, gold, securities and other assets having monetary value. Many secured loan lenders offer personal loans without a Credit Score.
Apply for a Low Amount
Higher amounts for customers are very risky from the lender’s point of view. But if you are applying for a small amount, then your chances of securing a loan increase substantially.
Apply with Banks and NBFCs
Many banks and Non-Banking Financial Companies (NBFCs) offer personal loans to people without a Credit Score.
However, a loan offered by them to people without a Credit Score comes with a very high rate of interest. This is because sanctioning loans to people without a Credit Score involves a lot of risk for NBFCs.
Apply With a Lender with a Tie-up with Your Employer
Individuals without a Credit Score and a salary slip can consider applying with a bank that has a tie-up with their employer.
These banks may offer you a loan without income proof because they already have your income details.
Apply through Online Platforms
Nowadays there are many online platforms that offer personal loans without any credit history. These lenders operate in selected cities and have their own credit check tools and lending policies. You can search for them online.
Request NA or NH on Your Credit Report
A Credit report with NA or NH indicates there has been no recent credit activity. By explaining your credit inactivity to the lender increases your chances of securing a loan at a higher interest rate.
Apply After Improving Your Credit Score
If you are not in a hurry, then you can first improve your credit score and then apply for a loan.
These were the eight best ways to secure an instant loan without a credit score in India.
How to Get an Instant Loan without CIBIL in India?
To make things easier for you, I have given a list of the top 10 Instant Loan Apps without a Credit Score. To avoid a scam, visit the following lending companies.
Get a loan amount of Rs 30,000/- to Rs 10 Lacs with an annual interest rate of 12% to 28%
Apply for a loan amount from Rs 5000 to Rs 500,000/- at an interest rate of 1.4% to 2.3% per month.
They offer loans up to Rs 300,000/- with an annual interest rate between 16% and 36%.
4. IIFL Personal Loans
IIFL offers loans up to Rs 500,000/- with an interest rate of 12.75% to 33.75% per annum.
Apply for a loan between Rs 5,000 and Rs 500,000/- at a rate of Rs 9 per day.
Get a loan up to Rs 400,000/- with an interest rate of 2.5% per month.
Apply for loans up to Rs 500,000/- at 1.33% per month.
MoneyTap offers loans up to Rs 500,000/- at a rate of 1.08% per month.
They offer loans up to Rs 200,000/- with an interest rate of .1% per day.
Get approved for loans up to Rs 300,000/- at an interest rate of 18% to 35% per annum.
Before applying for a loan, I would suggest you to visit their websites and find out more about their terms and conditions.
Cons of an Instant Loan without a Credit Score
You all know the advantages of an instant loan without a credit score, like no credit history required, fast approval and minimal paperwork.
However, before applying for a loan without a credit score, you must also be aware of the following dangers.
- Higher Interest Rates – Interest rates charged by lenders are very high for people without any credit score.
- Unfavourable Loan Terms – Loan terms set by the lenders are very unfavourable.
- Prone to Scams – Many online lending platforms operating in India are just scams.
Keep these three pitfalls in mind before you apply for a loan without a Credit Score.
I hope after reading this article, you will be able to apply for an instant loan even without a credit score.