The following tips and suggestions will help you avail loan to deal with financial exigencies or unavoidable life-events, despite your poor credit score.
BUSINESS STANDARD – Banks and NBFCs use credit scores to evaluate the creditworthiness of loan and credit card applicant. Credit score of 750 and above are considered as good and hence, those not making the cut have very low chances of loan or credit card approval or pay higher rates for them. While there are time-tested methods of improving your credit score, those take time and patience. The following tips and suggestions will help you avail loan to deal with financial exigencies or unavoidable life-events, despite your poor credit score:
Opt for secured loan:
Secured loans are those in which the loan applicant has to pledge asset(s) as security or collateral against the loan amount. Loan against property, loans against fixed deposits, loan against securities, gold loan are some of the most popular variants of secured loans. As the lenders have the option to sell your collateral in the event of a loan default, they may ignore or relax the requirement of a good credit score while evaluating your creditworthiness.|BS
For borrowers with similar credit profiles, secured loans usually have a lower interest rate than the unsecured loans. Given that those with lower credit score might have to pay a higher interest rate on an unsecured loan, opting for a secured loan might help in reducing your interest cost.
Approach NBFCs and housing finance companies (HFCs):
NBFCs and HFCs usually have less stringent loan evaluation processes than banks. NBFCs and HFCs usually target borrowers avoided by banks. Hence, those with lower credit score may have higher chances of loan approval from NBFCs than banks…Read More
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