The number of active secured and unsecured credits in India grew by 15.1% as compared to the previous year. Quick processing and simplistic eligibility criteria laid down by NBFCs were two primary reasons behind the same.
A credit score is one such crucial eligibility criteria. Lenders determine the creditworthiness of an applicant with the help of their rating. Hence before opting for the loan against property users must have to check the credit score criteria like having low credit score or high credit score. On the basis of the score, users can avail of Low Credit Loan. Borrowers are required to have a decent score to avail a long against property with favorable terms.
Tips For Getting A Loan Application Approved With A Low Credit Rating
Applicants can avail of a loan with a poor credit rating by following the tips mentioned below.
i. Add a co-applicant
Borrowers can avail of a loan with poor credit rating if they add a creditworthy co-applicant to their loan application. Both the applicants are equally liable to repay the debt. It will provide additional security to financial institutions. Also, applying for a loan with a co-applicant with a high CIBIL score ensures that a borrower is eligible to avail of a higher loan amount with competitive interest rates.
ii. Opt for a lesser loan amount
Financial institutions can offer a loan amount of up to 70% of their collateral value in case of a loan against property. The offered amount is based on the risk assessment conducted by lenders on an applicant’s profile. Individuals with a lower score are offered a lower loan amount.
If a lender rejects an application due to a poor credit rating, borrowers can reduce the risk factor by applying for a lesser loan amount. Along with increasing the probability of an application getting approved, it will also reduce debt obligations on a borrower.
iii. Avail a loan from a reputed NBFC
Financial institutions like Bajaj Finserv have simplified the eligibility criteria to ensure that applicants with a low credit rating can avail of such advances. Applicants are required to meet the basic eligibility criteria to avail of a loan for a low CIBIL score.
Bajaj Finserv also provides pre-approved offers on such credits to make the process of availing them more straightforward and less time-consuming. These offers are valid on an extensive range of financial services and products that include home loans, business loans, personal loans, etc. You can check your pre-approved offer by providing a few essential details like your contact details and your name.
Along with these tips, borrowers should also be aware of how to improve credit scores so that they can avail of such advances with ease in the future.
Tips To Improve Credit Rating
● Pay EMIs on time
Timely repayment of EMIs can massively boost the credit rating of a borrower. If an individual misses their EMI payment, it is noted in their credit history. Borrowers can set up automated payments to ensure that they do not default. However, they must ensure that their account has enough funds, so they do not incur an EMI bounce charge due to insufficient balance.
● Clear existing debts
Existing debt obligations can severely affect the credit rating of an applicant. Hence, clearing existing debts can boost the credit rating of a borrower. They can opt for part pre-payment or foreclosure facilities to effectively repay their existing loans before time.
● Avoid too much debt obligations
Borrowers should set a limit for themselves on the number of loans they avail in a specific period. Availing multiple credits in a short period can negatively affect the credit rating of a borrower. On the other hand, if they avail a single loan at one point in time and repay it within the stipulated period, they are likely to provide a massive boost to their credit rating.
● Opt for a longer tenor while availing a loan
Borrowers must ensure that they opt for a long tenor when they avail of loans. It ensures that the EMI amount is comparatively less, and they can repay the debt conveniently. It will reduce their chances of default and automatically boost their credit rating.
Individuals can avail of a loan against property with a poor credit rating by considering the points mentioned above. Also, they must be aware of how a mortgage loan can impact the CIBIL score so that they can effectively repay the availed advance to improve it.