How to get loans even with a low credit score (1)

How to get loans even with a low credit score

The deal

CIBIL data says 80 per cent of the loans that get approved have a score above 750.However,
credit score is not the only parameter which lenders look at for approval and deciding the
interest rates.

The difference in the interest rate paid by someone will vary depending on the product
(secured or unsecured loan), size of the credit and the payback tenure. The difference will be
bigger in case of unsecured loans than secured loans. "Someone with lower credit score can
avail secured loans like a home loan at interest rate ranging anywhere between 11.50 per cent
and 18 per cent. The rate may jump a little (between 13 per cent-18 per cent) for loan against
property.

Your options

Typically, non-banking financial Institutions (NBFCs) are more flexible with credit scores and the
cut-offs than banks (see box). "NBFCs have disbursed loans for a credit score as low as 360

Peer-to-peer, or, P2P, lending websites can also be an option to get a loan if you have a low
credit score. These sites provide small personal loans of up to Rs 5 lakh for tenures ranging
from 12 to 36 months. You can get these loans without any collateral at 12 to 24 per cent,
depending on how much you can negotiate. “Although the profiles with low credit score are
scrutinized under strict process there is a better chance of not only getting funded but to get
much lower Property Loan Interest Rate?

How to negotiate

Don't go to a mainstream bank if your score is below 650. This will have further negative effect
on your score. Every time you make a loan enquiry, lenders will pull out your credit report and
all these requests get registered. Too many enquiries within a short time can have a negative
effect on the score as well as makes lenders skeptical.

[Source: http://economictimes.indiatimes.com/wealth/borrow/how-to-get-loans-even-with-a-
low-credit-score/articleshow/50292586.cms]