Whenever a financial emergency arises, applying for an instant personal loan is typically the default option for most people.
And why not? Personal loans are convenient to apply for, require minimal documentation, feature simple eligibility criteria, and offer you access to funds quickly. However, what happens when you don’t have a CIBIL score?
Your credit score is a crucial eligibility requirement when applying for a loan, as it helps lenders assess your borrowing history and repayment habits. While getting a loan without a credit score can be challenging, it is not impossible.
Many lenders are open to alternative methods to assess your creditworthiness and allow you to borrow funds with low or no CIBIL score without undergoing a hard credit inquiry.
Here are five practical ways to access a loan without relying on your CIBIL score.
How to Get a Loan without a Credit Score?
Even with no CIBIL Score, there are various ways to get an instant loan. Here are five ways to do it:
- Apply with a guarantor
- Request a smaller loan amount
- Provide income proof
- Offer collateral
- Explain credit inactivity
1. Apply with a guarantor
If you don’t have a credit score, applying with a guarantor with a strong credit history can greatly improve your chances of getting the loan. A guarantor acts as a financial backer who vouches for your repayment ability. Essentially, their credibility offsets your lack of credit history.
A guarantor can be anyone – your parent, spouse, sibling, or any close relative with reliable proof of income and a good credit score. However, it’s important to note that a guarantor is legally responsible for repaying the loan in case of default.
So, you must ensure timely repayment of EMIs to enjoy a smooth repayment process.
2. Apply for a small loan amount
If you’re new to borrowing a loan and don’t have a credit score, requesting a smaller loan amount based on your income is the best bet. This is because, with a small loan, you can better demonstrate your repayment capability.
Lenders are more likely to approve modest sums because the risk involved is lower. If they are sure that you can afford the EMIs with your income, they are more likely to approve the loan.
Not to mention, timely repayments will show that you are a responsible borrower, so you can gradually build trust with lenders. Over time, this track record can even help you access larger loan amounts. Think of it as building your financial credibility, one step at a time.
3. Apply with income proof
When you apply for a loan, Apply with income proofthe lender also requires you to provide proof of income to determine your financial stability. In the absence of a credit score, proof of income is essential to show that you have a steady cash flow to meet your loan obligations.
Based on your lender’s documentation requirements for salaried and self-employed individuals, you will have to submit salary slips, bank statements, IT returns, and so on to highlight your income stability.
4. Apply for a collateral-based loan
Typically personal loans are collateral-free loans. However, if you’re applying for a loan without a credit score, consider pledging an asset as security. This reduces the lender’s risk because the collateral can be liquidated in case of default to recover the loan amount.
A collateral can be any valuable asset, including property, fixed deposits, gold, or other assets. Since the loan is secured against the collateral, lenders may be more willing to approve the application, even if you lack a credit score.
For example, a gold loan is often easier to obtain because the pledged gold serves as a reliable security.
5. Get an NH or HN on your credit report
If you’ve been financially inactive, it’s crucial to address this with lenders. A no-credit history (NH) remark on your credit report simply highlights that you’ve never taken a loan or used a credit card before. An “NH” score doesn’t mean you’re a risky borrower or have a negative financial status.
So, when applying for a loan, provide a detailed explanation of your financial history and the reasons behind your lack of credit activity. This could include highlighting stable income, consistent savings, or past instances where you managed finances responsibly without borrowing.
Lenders appreciate honesty, and being upfront about your situation can build the trust necessary to secure approval.
Is it Possible to Get a Small Loan in India without a CIBIL Check?
While most lenders require the applicant’s credit information and CIBIL score to assess their creditworthiness, getting a small instant loan without a CIBIL check in India is still possible.
Most lenders allow you to apply for an instant loan without a CIBIL score in the following ways-
1. Apply with a guarantor, in which case the guarantor’s credit history will be considered before loan approval.
2. Apply for a small loan amount to ensure easy repayment per your financial capacity.
3. You can also consider pledging collateral that mitigates the lender’s risk without the credit score.
4. Furnish income proof documents to assure the lender of your repayment capacity. If you have a low or no CIBIL score, you can easily apply for an instant loan with these ways and receive the funds quickly without undergoing a hard inquiry or CIBIL check on your credit report.
Conclusion
Although a no-credit-check loan can be sanctioned without a CIBIL score, you’ll be charged a high rate of interest. Therefore, if you need urgent access to funds, turn to Tata Capital. We offer personal loan at affordable interest rates with minimal documentation.
FAQs
It is possible to get a loan without a CIBIL score. Various lenders allow you to apply for a loan without CIBIL by applying with a guarantor, requesting a small loan amount, or pledging collateral. Additionally, they will assess other eligibility factors, such as income and employment stability, instead of solely relying on the CIBIL score.
Yes, you can get a loan even if you don't have a credit score. Seek lenders that will consider alternative credit assessment methods such as income and employment history or allow you to apply for a small loan amount without a credit score.
If you don't have a credit score, you can consider applying for a small loan amount to make repayment easy. Alternatively, you can pledge collateral as a security towards the loan, apply with a guarantor, or present additional income documents such as salary slips, bank statements, or employment documents to prove your financial capacity.
Yes, getting a ₹50,000 loan without a CIBIL score is possible. Financial institutions offer small personal loans based on various eligibility factors such as your income, employment stability, and other personal details, bypassing the need for a CIBIL score check.
When applying for a loan without a credit score, approval times will depend on the lender. Generally, it can be done within two to three days, or longer.
Yes. If you try to apply for loans with a no or a low CIBIL score, your lender may not allow you to avail of loan or only offer very high interest rates.
Repayment tenures will depend on your loan amount and lender. In general, without a CIBIL score, this may range from 3 to 60 months.
25 February 2025
5 mins read
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