Urgent Personal loan for CIBIL Defaulters – A Complete Guide

urgent loan for cibil defaulters

If you have defaulted on a loan in the past, you may be struggling to get approved for a personal loan. This is because banks and financial institutions use your credit history to assess your creditworthiness. However, there are options available for CIBIL defaulters to get an instant loan.

In this blog post, we will discuss what CIBIL is, why it matters, and how to get an urgent loan if you are a CIBIL defaulter.

Before we dive into the details of getting a loan as a CIBIL defaulter, let’s first understand what a personal loan is.

personal loan

What is a Personal Loan : A personal loan is an unsecured loan that you can take for any purpose. Unlike a home loan or a car loan, you don’t have to use the loan amount for a specific purpose. You can use it to fund a wedding, a vacation, or to pay off other debts. If you want a personal loan and have a bad CIBIL score or no CIBIL score, you can still get a loan, want to know how?
Read this blog to learn how to get a loan without CIBIL.

What is CIBIL? : CIBIL is short for Credit Information Bureau India Limited. It is a credit information company that maintains credit records of individuals and companies. Whenever you apply for a loan or a credit card, the bank or financial institution will check your credit score and credit report from CIBIL.

What is a CIBIL Score? Your CIBIL score is a three-digit number that ranges from 300 to 900. It is calculated based on your credit history, including your payment history, credit utilization, length of credit history, and new credit inquiries.
If you think CIBIL score and Credit score are the same, they are NOT, read this blog to find out how.

A high CIBIL score indicates that you have a good credit history and are more likely to get approved for a loan or a credit card. On the other hand, a low CIBIL score indicates that you have a poor credit history and may not get approved for a loan.

Range of CIBIL Score

GradingRange of CIBIL Score
Excellent750-900
Good650-750
Average550-650
Bad300-550

Also, Read: Credit Score vs CIBIL Score: Are they Even Different?

Who is Considered as a CIBIL Defaulter?

If you have defaulted on a loan or a credit card payment in the past, you may be considered as a CIBIL defaulter. This means that your credit score has been negatively impacted, and you may find it difficult to get approved for a loan or a credit card in the future. While a CIBIL defaulter isn’t strictly defined but typically refers to someone with a score below 600, often due to late or missed loan repayments. Frequently applying for several credit cards or loans in a short time can also lower the score. For those labeled as CIBIL defaulters, securing urgent loans requires understanding certain strategies, which are further explored in the subsequent section.

Also, Read: What is Credit Score? Factors, Calculation & Ways to Improve

Ways to Get Urgent Personal Loans for CIBIL Defaulters

If you are a CIBIL defaulter and need an urgent loan, here are some options you can consider:

1. Peer-to-Peer Lending

Peer-to-peer lending platforms connect borrowers with individual investors. These platforms may be more willing to lend to CIBIL defaulters, but the interest rates may be higher than traditional banks.

2. Gold Loan

If you have gold jewelry, you can pledge it as collateral and get a loan against it. The interest rates for gold loans may be lower than personal loans, but you risk losing your jewelry if you are unable to repay the loan.

3. Loan Against Fixed Deposit

If you have a fixed deposit with a bank, you can get a loan against it. The interest rates for these loans may be lower than personal loans, but the loan amount will be limited to the amount of your fixed deposit.

4. Loan Against Property

If you own a property, you can pledge it as collateral and get a loan against it. The interest rates for these loans may be lower than personal loans, but you risk losing your property if you are unable to repay the loan.

Also, Read: Get a Personal Loan Without Credit Score – 5 Fool-Proof Ways

How to Get Urgent Loan for CIBIL Defaulters

If you need an urgent loan and have a low CIBIL score, here are some steps you can take to improve your chances of getting approved:

1. Check Your Credit Report

Check your credit report for errors or discrepancies. If you find any errors, dispute them with CIBIL and get them corrected.

2. Pay Your Dues

Pay off any outstanding debts or dues that may be negatively impacting your credit score. This will improve your credit utilization ratio and show that you are responsible with your finances.

3. Improve Your Credit Score

Take steps to improve your credit score, such as paying your bills on time, reducing your credit utilization, and avoiding new credit inquiries.

4. Apply to Multiple Lenders

Apply to multiple lenders to improve your chances of getting approved. However, avoid submitting multiple loan applications at the same time as this can negatively impact your credit score.

Eligibility Criteria for Personal Loan For CIBIL Defaulters:

If you’re exploring the possibility of getting a personal loan but you are a CIBIL defaulter, then securing approval can be challenging. To qualify, you’ll need to meet the following criteria:

  • Age Requirement: You must be at least 21 years old.
  • Minimum Income: Your income should be Rs 14,500 or more per month.
  • Direct Salary Credit: Your earnings should be directly deposited into your bank account.
  • You must be an Indian citizen.

Documents Required for Personal Loan For CIBIL Defaulters:

Below are the common documents lenders ask to submit from a CIBIL defaulter:

  1. Proof of Identity: Aadhaar card, Driving License, Voter ID card, Passport, or PAN card.
  2. Proof of Address: Aadhaar card, Driving License, Voter ID card, Passport, recent Utility Bill (no older than two months), or Ration Card.
  3. Proof of Income: Salary Slip, Form 16, Bank Account Statement, Pension Payment Order, Profit and Loss Statement, Balance Sheet, or the previous year’s Income Tax Return.
  4. Proof of Business (if applicable): Required documents could include a Letter of Appointment, Job Contract, Labor Identity Card, an official or HR Email ID, Certificate of Practice, GST registration, and filing documents.

How to Fix Credit Mistakes and Remove Your Name from the CIBIL Defaulter List?

To remove your name from the CIBIL defaulter list:

  1. Check Credit Report: Get your credit report from CIBIL’s website to see if you’re listed as a defaulter.
  2. Clear Dues: If listed, contact the lender and clear any outstanding debts or negotiate a repayment plan.
  3. Lender Updates CIBIL: Once dues are cleared, the lender will inform CIBIL.
  4. Regular Monitoring: Keep an eye on your credit report and practice good credit habits to prevent future defaults and improve your credit score.
  5. Make Timely EMI Payments: Always pay your loan EMIs on time. Missing payments can result in penalties and negatively affect your CIBIL score.
  6. Choose a Manageable Loan Term: Select a loan repayment period that comfortably fits your budget, allowing you to consistently meet EMI deadlines. Regular, on-time payments can gradually improve your CIBIL score.

6 Important Tips for Personal loans for CIBIL defaulters:

  1. Provide Accurate Income Proof: Showing reliable proof of income helps lenders assess your ability to repay the loan.
  2. Request Smaller Loan Amounts: Starting with smaller loans that are easier to repay can help build your creditworthiness for future, larger loans.
  3. Consider NBFCs: Non-Banking Financial Companies (NBFCs) may be more flexible than banks in lending to those with low credit scores, especially if you are in a financial pinch.
  4. Use a Guarantor: Having someone with a good credit score co-sign your loan can increase your chances of approval.
  5. Opt for Joint Loans: Applying with another person can improve your loan application’s strength.
  6. Secure Your Loan: Offering collateral, like gold, land, or fixed deposits, can make it easier to obtain a loan despite a low credit score.

How Credmudra Helps CIBIL Defaulters In Getting A Personal Loan:

Credmudra helps the CIBIL defaulters by providing:

  • Pre-Approved Loans: Offers pre-approved loans from various banks on a single platform.
  • Flexible Application Process: You can apply for a loan from anywhere at any time.
  • We offer a referral program where you can earn up to 10,000 by recommending our services. Interested in learning more? Check out the details here!
  • On-Call Support: Available to help you with your doubts.

Also, Read: How to Get Loan Without a CIBIL Score?

FAQ

1. What are the Options for CIBIL Defaulters to get an Instant Loan?

CIBIL defaulters can consider peer-to-peer lending, gold loans, loans against fixed deposits, or loans against property.

2. How can I Improve my Chances of Getting Approved for a Loan if I am a CIBIL Defaulter?

You can improve your chances of getting approved for a loan by checking your credit report for errors, paying your dues, improving your credit score, and applying to multiple lenders.

3. Will I go to Jail if I am a CIBIL Defaulter?

In India, failing to repay a loan is not a criminal offense and doesn’t lead to jail time. It’s treated as a civil issue rather than a criminal one.

4. Will CIBIL Reset a Credit Record after 7 Years?

CIBIL maintains a comprehensive Credit Information Report that includes an individual’s credit history and defaults. This record is retained for a minimum of 7 years from the date of the first delinquency. However, CIBIL does not have the authority to delete or alter these credit records.

Also, Read: NBFC Loans Without CIBIL Score: Your Complete Guide

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