A personal loan is a multipurpose loan. This loan is provided by banks and NBFCs so that you can sort out all the queries and fees. This is an unsecured loan, so no collateral is required. Personal loan interest rates are entirely dependent on your eligibility as determined by the lender.
Once you qualify for a personal loan, you can apply for a personal loan. At this point, banks and NBFCs will look at work and income history to determine personal loan interest rates. They will also look at your credit score. With a good credit score, you can get the lowest interest rates the bank can offer. If you have bad credit, you can get a loan with a higher interest rate or your application will be rejected.
Get a personal loan with a bad credit score.
There are low chances of getting a personal loan with a bad credit history. Banks and NBFCs usually will avoid giving customers personal loans with a bad credit score. You will have to improve your credit score through the following steps:
Pay all your bills on time. Do not default on any payment. Consistent repayment over a long period of time will improve your credit score.
Maintain a healthy credit utilization ratio. This ratio must hover around 35–40% maximum of your credit limit.
Close debts one by one through a debt consolidation loan as it will help you save interest money. Closing multiple debts is seen as a good response by the Banks and NBFCs.
Apply with a co-applicant or a loan guarantor. The Bank will consider your loan application as secure and offer you a personal loan.
Check your credit report and search for errors. Each error that you correct will help you in improving your credit history.
Apply for a lower personal loan amount. This is seen as good practice and Banks will mostly accept your loan application. Pay those EMIs on time and your credit score will improve in no time.
If you can show the Bank that your income can easily support personal loan EMI, then they will accept your loan application. This applies to people who have additional sources of income or recently got an appraisal.
These are ways through which you can get a personal loan when you don’t have a good credit history. If you want personal loan in Mumbai visit our website.
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