Can I Avail a Personal Loan without Cibil Score?

Being a first-time Personal Loan borrower, it is normal to feel like a fish out of water as you begin your research for available loan products and eligibility criteria. Some of the common queries are: How much I can borrow and for how long? Am I eligible for a low rate? Who are the top lenders? What is Credit Score, and how is it going to affect my application? Can I get a Personal Loan without CIBIL Score?

With the length of articles and blogs available online, it is not quite difficult to understand about all the intricacies of availing a Personal Loan. However, the tricky task at hand is to pick the right information from the crowded web-space. This blog is written specifically to clear the noise around first time borrowing.

Understand the loan product.

A Personal Loan is an all-purpose, Unsecured Loan. There is no restriction of a “purpose” attached. Be it an urgent loan or a casual one, it doesn’t touch the approval decision. Common reasons to apply for personal loan are: Medical, Education, Wedding, Travel, Home Improvement, etc.

Personal Loan is one of the common credit products, and most banks and NBFCs offer hassle-free lending to a range of customers. You can generally borrow a Personal Loan ranging from Rs 50000 to 25 Lakh for 1 to 5 years at an interest rate ranging from 10.75 % to 22 % p.a. Common eligibility requirements are: Minimum age: 21 years; Must be employed or self-employed; A valid proof for Income, address, qualification, and age.

Why you want a Personal Loan?

Before you apply for a Personal Loan, assess your financial situation. You must clearly outline why you are borrowing as it will help you strictly channelize the funds. A Personal Loan is an unsecured loan and is costlier than a secured loan. So, a Personal Loan must be applied only when you have a plan or a backup to repay it. You need to evaluate your repayment capacity before applying for the loan.

Find the top Products

Another vital aspect is to learn about the top Personal Loans of the current and last year. You must study about the features of Personal Loans from the banks as well as NBFCs. To ease the product assessment step, let’s discuss Personal Loans from HDFC and Bajaj Finserv.

HDFC Personal Loan

HDFC is the largest private sector bank in India and offers consumer-friendly products. Currently, HDFC Personal Loan is available to both salaried, self-employed, and professionals at a competitive rate ranging from 11.25%-20%. The bank has a robust customer support service, and also extends doorstep service for document collection.

You can check the eligibility for HDFC Personal Loan within 60 seconds using the online eligibility calculator. The amount is disbursed within 4 hours of loan approval. The existing customers must check the preapproved bank offers that may include, EMI rest, lower interest rate, processing fee waiver and alike.

Bajaj Finserv Personal Loan

If you are looking for a customised offer, you must check out the Personal Loan offer by Bajaj Finserv. It is an NBFC that extends convenient Personal Loans at interest rate starting from 12.99% onwards. The offers from NBFCs are more flexible and customised according to the applicants’ needs. The eligibility requirements are more extensive to cater to a more diversified customer base. 

You can borrow a Bajaj Finserv Personal Loan up to Rs 25 Lakh for a maximum of five years. The Personal Loan by Bajaj Finserv is offered as a Flexi Personal Loan as well, wherein you can opt for flexible repayment structure.

CIBIL SCORE: Why it is important?

CIBIL Score is a benchmark credit rating for individuals and business entities. The bank assesses the risk profile of the customer according to the credit score of the applicant. As a rule of thumb, an applicant having a CIBIL score above 750 points is considered as a good prospect for the lender.

It takes time to build a credit history and appropriate Personal Loan Cibil Score. Anyone with an active credit account, i.e., having a credit card, auto loan, business loan, personal loan or any other product has a credit score. The credit rating is based on the past credit repayment history of the individual.

However, the credit score is granted only after a credit history of 6 months and above. It is only after 24 months of good history, you will build a good score.

Can I get a loan without CIBIL?

Now, what will happen to your loan application when you do not have a CIBIL Score?

If you lack a credit history, you lack a credit score as well. The absence of a credit score should not be read as a low credit worth, particularly when you have a stable job or business income to support you.

 In the absence of a credit score, you can prove your creditworthiness to the lender in the following ways:

1. Income Proof

Submit a valid proof of income to the lender. If you are employed, you can submit salary slips of the previous two years. A self-employed individual can submit ITR, P&L account or balance sheet of the last two years.

2. Continuity of a business/ job

The lender is interested in knowing about the continuity of your last job/ business. By presenting proof for the same, you can successfully build your creditworthiness to the bank.

3. Income of the spouse

Another convenient way to add to your credit eligibility is by sharing proof of income of your spouse. By making your spouse a co-applicant for the loan, the risk of the lender is reduced, and they will offer you a higher loan amount.

4. Assets

Whether you are living in own house or rented accommodation, also affects your loan eligibility. Likewise, you can avail faster loan against your Saving Bank Account Balance, Fixed Deposit, etc.

5. Guarantor

In case you do not have assets or an earning family member to support the loan application, you can consider finding a loan guarantor. Your employer, friend, or any acquaintance can act as a Guarantor. A guarantor assures bank of repayment guarantee for the loan.

It is thus very much possible to avail a loan without a CIBIL history.