Get Urgent Loan for CIBIL Defaulters

Do you need quick funds, but a low CIBIL score is getting in your way? Well, you are not alone in this. Many people are added to the list of defaulters due to missed payments or unexpected emergencies. But does that mean getting an approval of loan approval is not at all possible? The answer is no!

It is quite likely that traditional banks may not offer an extremely urgent loan for CIBIL defaulters; however, alternative options are always available. Secured loans, NBFCs, and peer-to-peer lending – all these choices can help you secure funds with a low CIBIL. Beyond credit scores, today, lenders also evaluate employment status, income stability, and collateral before approving/rejecting the application.

So, whether you want money for business operations or a medical emergency, read this blog to understand how to get a personal loan with bad CIBIL score.

Who are CIBIL Defaulters?

Any defaults or late payments are recorded in your credit report, which is accessible to lenders when you apply for credit. This represents the irresponsible behaviour of the person in repayments of loans and credit card bills. That is why lending institutions do not trust on the requirement of urgent loan for CIBIL defaulters. Typically, when an individual's CIBIL is scored below 600, then it means he is considered a CIBIL defaulter. 

Why a Good CIBIL Score is Important?

When it comes to loans, a good CIBIL score means financial institutions trust you more. And when they trust you, you get the below benefits.

• It makes your loan approval process easy: Imagine walking into a bank, all set to take a loan but facing rejection due to a low credit score. A good CIBIL score above 750 highlights your financial responsibility, allowing you to easily get funds. 

• Banks offer lower interest rates on loans with good CIBIL scores: Would you rather pay 12% interest on a personal loan or 8%? Banks offer low interest rates to people with good CIBIL scores, informing authorities that you are a low-risk borrower. 

• You can get loans on higher amounts with a long tenure of the period: If you are planning to buy a home or invest in a commercial property, a good CIBIL score can help you secure higher loan amounts for a longer duration. It means fewer EMIs and less financial stress. 

• It improves your financial trustworthiness: Today, trust is everything, and a good credit score helps you earn it. It displays your overall financial credibility towards repayment of loans and credit card bills.

• You will get pre-approved offers: Remember, once you opened your inbox and received a pre-approved loan offer without even applying? Yes, that is the magic of a good CIBIL score. Banks and financial institutions offer exclusive offers to people who have proven their financial behaviour.

Also read: How to Improve CIBIL Score Instantly?

Why Are You Under the Defaulter List?

If your profile is in the CIBIL defaulters list, below are some reasons for this.

• Not paying the loan EMIs or credit card bills on time.
• Applied for loans from multiple lenders at the same time.
• Used more than 30% of the credit card limit.
• Not inform the lending institution about payment difficulty.
• If you have never taken a loan, then your CIBIL will be zero, meaning you are not eligible.

Eligibility Criteria for Quick Loan for CIBIL Defaulters

CIBIL defaulters can take a loan by following the eligibility criteria below.

• Age between 18 to 65 years is required.
• Minimum income should be between Rs. 15000 to Rs. 25000 per month.
• A stable source of income is required for both salaried- and self-employed people.
• A minimum of 600 CIBIL score is required by lenders.

Best Ways to Get a Personal Loan for CIBIL Defaulters

Just because your CIBIL score is not perfect, it does not mean you cannot get an instant personal loan. Here are a few tips to increase your chances of approval of loan for CIBIL defaulters: 

1. Apply with a Co-Applicant

If your CIBIL score is not at its best, applying for a personal loan with a co-applicant can help you access funds more easily. Adding a trusted co-applicant—like a parent, sibling, or spouse—not only increases your chances of approval but also offers lenders added security. This approach can be especially helpful if you're earning a modest income, say a monthly salary of ₹20,000, and looking for a personal loan on 20K with low income. The good part? It can also open doors to longer tenure and better interest rates. Just make sure you're transparent about repayment responsibilities, as both credit scores will be affected by the loan’s success or failure. Ideally, your co-applicant should have a good CIBIL score (typically above 700) to significantly improve approval chances.

2. Use Collateral

Another important secret to securing an instant loan for CIBIL defaulters is to put up an asset as collateral. It provides a safety net to banks and other financial institutions in situations where the borrower is not able to repay the amount. Property, fixed deposits, or gold - collateral can be in any form, giving you the leverage to avail loan without a perfect credit history. However, this advantage comes with risks. The failure to repay can seize your assets; therefore, only opt for this option when you are confident of your abilities. 

3. Select a Shorter Loan Tenure

People with low CIBIL scores are already struggling with the approval process, and further, they do not want a fast approval loan with low CIBIL score that will weigh them down. The solution? Choose a shorter loan tenure. From the viewpoint of lenders, these loans are less risky as borrowers repay the amount quickly, lowering the chances of default. But there is a catch: they come with higher EMIs. Before you finalise these loans, make sure to easily handle the high repayment amount. 

4. Opt for a Higher Interest Rate Loan

No individual wants to pay high interest rates on their loans; however, if you are in urgent need of an urgent loan of 2 lakhs for CIBIL defaulters, this route can save your day. Lenders consider that applicants with poor credit history are high-risk borrowers, and the compensation for such risks is higher interest rates. While this is not the most ideal choice, if you can manage the EMIs, it is the instant way to get funds. Also, once you have stable finances, you can refinance or pre-close your loan. 

5. Think Beyond Banks

Has your loan been rejected by multiple banks? If yes, explore the option of Non-Banking Financial Companies (NBFCs) and private lenders to avail an instant loan for CIBIL defaulters. These lenders deliver flexibility and also evaluate job stability, income, and overall financial history before rejecting or approving the loan application. They may charge higher interest rates but provide instant financial relief when banks are not the option. The strategy here is to do window shopping before picking the one. 

6. Try Peer-to-Peer (P2P) Lending

A fairly new lending alternative, borrowing from individuals has become a popular option for all good reasons. Here, individual investors offer fast approval loan with low CIBIL, being more focused on your personal needs and not just your CIBIL score. Available with fewer conditions, these loans can be availed on the best terms. Ready to pay a slightly higher interest rate? You can have easy access to funds. Just ensure you are reaching out to a reputed lender to prevent any fraud.

Documents Required to Get Urgent Loan as a CIBIL Defaulter

For taking an urgent loan for CIBIL defaulters, you may need to provide the following documents.

• Identity: Aadhaar number, PAN number, voter card, passport, or driving license.
• Address: Aadhaar details, passport, driving license, rent agreement, electricity, or water bill.
• Income: Salary slip, bank statement, ITR, financial audited statements.
• Co-applicant details: KYC and financial documents.

How to Improve Your Profile from the CIBIL Defaulter List

When your profile is under the defaulter list, it is important for you to improve your CIBIL score. Below are the ideas you can follow to improve your credit score and chances of approval of loan for CIBIL defaulters.

• Pay your dues on time: Pay all your loans and credit card bills before the due dates.
• Avoid defaulting on settling your loans: You should avoid late payments; it prevents you from adding your name to the defaulter list.
• Avoid applying for multiple loans or credit cards: You should avoid applying for various loans or credit cards at the same time. This will show your credit-hungry behavior and lower your credit score. 
• Maintain a low credit utilization ratio: You should maintain a low credit utilization ratio and keep it below 30%.

What Problems Do You Face as a CIBIL Defaulter?

A CIBIL defaulter can face many kinds of trouble, below are some points.

• Hard to get loans: Banks and lenders may say no and give bad deals.
• More interest and fees: You pay more for your loans and lose money.
• Less money and time: You get smaller and shorter loans and fewer choices.
• Bad name and trust: You destroy your image and chances for future loans.

Conclusion

For CIBIL defaulters, obtaining a fast loan is not simple, but it is also not impossible. In the above information, we have listed a few tips and tricks for you to secure an instant loan for CIBIL defaulters. Using the above method may seem costly and uncomfortable but in emergencies, it is the most ideal choice to access funds. So, moving forward, make your payments on time, keep an eye on your CIBIL score, and keep these struggles off the boundary.

Also read: Need Personal Loan with Bad CIBIL Score