A credit score is among the essential factors a lender considers when evaluating a person's creditworthiness. A credit score of 750 or above is considered good and can help you secure loans quickly. Maintaining a decent credit score is difficult for many people since it necessitates discipline, money management skills, and, most crucially, sufficient cash flow to pay off obligations on time.


Nevertheless, did you realize that you may acquire a loan even if you have a bad credit score? Yes, even though you have a low credit history, you can still acquire a loan.


So, if you are looking for Rs. 50 Lakh Personal Loan here are six strategies to acquire it even if you have a bad credit score:


1. Extend your loan search horizons

Credit score cut-offs used to evaluate loan applications might differ between lenders. Some lenders impose a high credit score cut-off when reviewing loan applications, while others may grant loans to people with a lower credit score but rising interest rates.


Lower credit score candidates should broaden their search to include lenders who provide loans to people with bad credit. Browse online financial markets that give loan proposals from numerous lenders based on a customer's credit score, monthly salary, employment profile, and other factors.


2. Talk to your lender about it

If you have a poor CIBIL/Credit score due to actual financial troubles in the past, you can speak directly with your banker, with whom you have had a lengthy relationship. Even if you have a bad credit score, this might help you receive better lending conditions. Also, demonstrating evidence of any change in your financial situation, such as a rise in income or more secure work, boosts your likelihood of acquiring your loan application.


3. Secured loans are the best option

Secured loans are for people who have been rejected for unsecured loans such as personal loans and credit card loans or who are being charged exceptionally high-interest rates due to their low credit ratings. Lenders have less credit risk when they provide loans supported by suitable collateral and sufficient liquidity. Consequently, they place less emphasis on credit scores when accepting secured loan applications.


A mortgage-backed loan, including a gold loan, a loan against property, or a loan against assets, is an option. However, only use this option if you have a pressing financial need. All are secured loans since the lender holds one of these assets as security.


4. Make an application for a shared loan or a guarantor

A shared loan is another option for acquiring a loan despite a bad credit score. One can apply for a loan here by partnering with someone who has an excellent credit score, such as a spouse or family member. Since the other person acts as a co-applicant with the debtor with a poor credit history, the chances of having loans authorized improve.


If you're a poor credit score, a co-applicant/guarantor can help you enhance your loan eligibility. Introducing a co-applicant/guarantor with a stronger credit score and credit profile lowers the lender's credit risk because the co-applicant/guarantor is also responsible for loan repayment.


5. Acquire a loan from P2P or NBFC like lending platforms

It can lower your credit score since banks undertake thorough credit report audits, occasionally leading to harsh inquiries. As a result, you should contact NBFCs rather than banks because the latter have more lenient attitudes regarding those with bad or no credit. The drawback is that, in comparison to banks, these firms charge substantially higher interest rates.


Peer-to-peer lending services are the simplest and quickest option to secure a loan whether you have no or a poor credit score. In addition to paperless disbursements and loan duration flexibility, these platforms offer lower interest rates than NBFCs.





6. Consider taking out a lesser loan

Although you don't have strong credit, you may take out a modest loan, such as a personal loan, and return it regularly to improve your credit score. This method allows you to progressively improve your creditworthiness and eventually apply for a larger mortgage from a bank or other financial organization.


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Suppose you pay off all of your existing obligations first, such as credit card bills, utility payments, and any other loans you may have taken out before. In that case, you may improve your credit score while also increasing your chances of getting a loan.


Anyone with existing house loans should check with their lenders to see whether other options in home loans are available if they require another loan.