How To Get A Loan with A Bad Credit Score - 6 Tips | Navi - YouTube

Anybody can need a loan at any point in their life.

Lenders always check borrowers’ credit worthiness and loan repayment capacity while offering and approving loans.

But if you need funds during an emergency and your credit score is low,

will you not get a loan?

Well, that might now always be true.

You CAN get a loan even if your credit score is low.

So, in today’s episode of Navi-pedia videos I’ll tell you about

how you could get a personal loan despite having a low credit score.

Watch till the end for some highly effective tips.

And yes, if you want to improve your credit score

then do watch this video

where I’ve shared 5 easy ways through which you could improve your credit score.

But before we go ahead, don’t forget to subscribe to our Youtube channel.

We make a lot of insightful videos on personal finance, loans, tax, insurance aur money management

- just to help you make the right financial decisions.

So, let’s start.

Credit score is a 3-digit score that represents your ability to repay loans.

A score of 750 and above is considered a good credit score

while a score of 600-750 is considered an average rating.

But typically a score below 550 is considered a bad credit score.

Your credit score is indicative of your credit history,

your previous and existing loans and whether you’ve paid your credit card dues on time or not,

how much percentage of your income goes into paying loans, among other things.

No matter why your credit score is low,

it is better to apply for a loan from a financial institution rather than borrowing money from your relatives or friends.

Even though you might have to face some challenges due to a poor credit score,

it is not impossible to get a loan.

You might have to take certain measures in this case. Let’s discuss these in detail:

Even though your credit rating might be low,

showing a salary hike or an additional income source can make the lender more favourable to your loan application.

Moreover, if you can show evidence that you have a secure job with a steady income flow,

the likelihood of your loan getting approved increases too.

Do note that you may be subjected to a higher rate of interest due to a low credit score.

Your lender may perceive you as a high-risk candidate if you ask for a high personal loan amount with a low credit score.

If the amount of the personal loan is lower,

the lender may be more inclined to grant the loan request owing to lower risk.

Also, the repayment of a lower amount will be far easier.

If you have a low credit score, then getting a co-applicant or guarantor with a good credit rating can help you get the personal loan faster.

With permission from your co-applicant or guarantor,

ensure that the KYC formalities are completed along with the necessary signatures on the relevant forms.

Basically, when the lender sees a co-applicant or guarantor with a good credit score on your loan application,

then your chances of loan approval might increase and it definitely helps towards sealing a better deal.

If unsecured loans like a personal loan or a credit card loan is not getting approved due to a low credit score

or get approved at exorbitant interest rates,

then you can opt for secured loans.

Secured loans are those in which you need to give a collateral against your loan amount.

Some examples of secured loans are gold loans,

loan against property, loan against eligible life insurance policies, FDs,

mutual fund investments, etc.

Secured loans are less risky for lenders,

that’s why you can get secured loans easily as compared to unsecured loans.

Many a time, it is possible that there may be misreporting or errors on your credit report due to which your credit score has been affected.

In most cases, this happens because your record hasn’t been updated with the latest information.

While it is not really your fault, mistakes such as these can cause unwanted issues.

To get ahead of the issue, regularly check your credit score.

If you find any errors, ensure that you report them to the relevant authorities and resolve them quickly.

Ultimately, it will also work favourably by raising your credit score and help you get a personal loan at your desired terms and conditions.

An inactive credit period in the last 36 months

or absence of a credit period during the same period of time is marked by an NA or NH on your credit report.

This translates into you not having a credit score at all in your report.

This translates into you not having a credit score at all in your report.

In this case, it is advisable to speak to your prospective lender and explain why there is a period of credit inactivity.

As a result of this request, It is possible that the loan will be approved but likely with a higher interest rate.

We hope these tips will help you get a loan approved despite a low credit score.

Meanwhile, if you’re thinking of getting a personal loan, you can consider Navi Personal Loans.

Navi offers instant personal loans up to Rs 20 Lakh for tenures up to 6 years.

With interest rates starting at 9.9% p.a., you can get a Navi Personal Loan in a 100% digital and paperless manner,

along with flexible EMI options and zero pre-closure charges.

To easily apply for a Navi Personal Loans and get your approved amount in your bank account within minutes,

download the Navi app on Playstore or App Store today.

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I’ll meet you soon with another interesting video. Buh-bye!