Small-ticket personal loans (STPL) have seen a sharp increase in demand from new borrowers recently. In fact, STPLs account for half of all Indian personal loan accounts.
Between the fiscal years 2017 and 2021, the volume of personal loans disbursed to young adults climbed 3.8 times.
The increasing laxity of the lending institutions in approving this credit advance is what makes these data plausible. All of their customers now have easy access to this financing option. People can now apply for a personal loan with a CIBIL score of 600 as well.
It is crucial to understand the requirements people must meet in order to apply for this credit advance with a credit score below the 750 industry average.
Ways to get a personal loan for a CIBIL score of 600
One of the key factors that lending organizations carefully consider when granting a loan request is the CIBIL score. They view a score above 750 as strong because it shows that those people have a history of on-time loan repayment. The lending organizations, therefore, view them as reliable and creditworthy borrowers.
However, some people might not have credit scores that are higher than this standard. They can contact lenders for personal loans in the following ways:
Applying with a co-borrower
Intenting borrowers should choose to apply for a personal loan with co-applicants if their credit score is below the criterion of 750. As a result, the co-borrower shares responsibility for debt repayment. As a result, this reduces the risk factors for lending institutions because they are aware that they can charge both the borrower and their guarantors to clear the loan amount in the event of loan delinquencies. There is a good chance that borrowers will have no trouble getting their loans approved.
In addition, if the co-applicant has a better income and CIBIL score, they may be more resilient. To prevent being turned down by lenders, applicants seeking personal loans should be aware of several pitfalls to avoid.
Requesting for a lower loan amount
It is simpler to obtain a personal loan with a CIBIL score of 600 if borrowers request a relatively smaller loan amount. Lenders are reassured that borrowers will be able to repay the loan conveniently and stress-free. In this situation, they are less hesitant to approve the loan because the likelihood of loan defaults is much reduced. Borrowers benefit from speedy disbursement of the short-ticket personal loan as a result.
Providing evidence to all income sources
Another way for people to gain the trust of lenders is to show them all of their sources of income. For instance, a person might have passive income streams like rent from real estate, interest from investments, or other earnings from side gigs in addition to their monthly pay.
When people disclose the expected total of their yearly gains, lenders become utterly confident that their loans will be successfully recovered. As a result, they easily dismiss the borrowers’ inferior credit scores and approve the credit amount in their savings accounts.
However, a thorough verification check is part of the personal loan sanctioning process. For a quick loan disbursal, borrowers must fully cooperate with their lending institutions.
Accepting the personal loan credit at a higher interest rate
In order to make up for the additional risk associated with this transaction, lenders may charge a higher personal loan interest rate for a CIBIL score of 600. As a result, while asking for loans, people need to be ready for rising borrowing costs. High borrowing prices, however, might cause people to experience persistent financial hardship. Therefore, individuals might profit from flexi personal loans to keep their interest expenses to a minimum.
As a result, anyone can obtain a personal loan from Indian lending institutions. However, people typically seek this kind of unsecured loan when they have a financial emergency.
Therefore, in order to apply for this credit advance online and receive the money more quickly, people must use the lenders’ immediate lending apps.
Individuals can expeditiously complete their loan applications in addition to using the rapid loan application by accepting pre-approved offers from lending organizations. These financial institutions provide these advantages for their credit cards, business loans, and personal loans. To verify their pre-approved offers, loan applicants simply need to specify their credentials, such as names and contact information.
In conclusion, people should keep in mind that if they apply for a personal loan with a CIBIL score of 600, they can receive a smaller loan amount at a higher interest rate. To obtain loans with substantially more advantageous terms, individuals must compare several lenders from the entire industry.
