Urgent Loan with Bad Credit in India – Get Instant Cash Now!

Financial emergencies can occur unexpectedly, leaving many to turn to loans to get quick access to funds. However, what happens when someone has a very bad credit score?

Table of Content

• What Are Bad Credit Loans?
• How Does the Credit Score Work?
• Eligibility Criteria for Urgent Loans with Bad Credit
• Tips to Get Urgent Loan with a Bad Credit History
• Documents Required for a Low CIBIL or Bad Credit Loan
• Conclusion

When seeking a loan, lenders often take many factors into consideration. One such crucial factor is a credit score, which essentially reflects your repayment history.

Even with a good income and job status, a bad credit loan in India can make loan approval difficult and interest rates higher. But, while accessing a loan with a bad credit score is indeed challenging, it’s not a dead end.

To help you, here is all you need to know to get an urgent loan with bad credit in India:

What Are Bad Credit Loans?

A bad credit loan, or bad CIBIL loan, is a type of financial product that is designed specifically for individuals who have a low or poor credit score, typically lower than 620-650 (depending on the credit bureau and the lender), or if they have no credit history or a limited credit history. People can apply for this type of loan for urgent money in situations where traditional loan applications may be rejected due to the high perceived risk of default. Getting an emergency loan is not impossible, but it is important to remember that a low credit (CIBIL) score loan or a no CIBIL score loan may attract a higher rate of interest than regular emergency loans.

How Does the Credit Score Work?

Before we dive into how you can get emergency loans for bad credit, let’s first understand how credit scores work.

A credit score is a numerical representation of a person’s creditworthiness. Credit bureaus like CIBIL calculate the credit score based on factors like credit utilization score, payment history, credit mix, recent inquiries, and more. 

Score that ranges between 300 to 900, with a higher score indicating better creditworthiness. Lenders use this score to evaluate a person’s risk before determining their interest rate and approving their loan. A person can improve their credit score by making timely loan payments, responsibly using credit, and maintaining a diverse credit portfolio. To check your CIBIL score for free, consider visiting Muthoot Finance.

Eligibility Criteria for Urgent Loans with Bad Credit

• Income Stability: For a personal loan with a low CIBIL score, lenders primarily look for a stable, regular source of income that ensures the ability of the borrower to repay the loan. This may involve requirements of a minimum net monthly salary, which may vary based on the location and the lender.
• Stability of Employment: A consistent history of employment for at least six months with the current employer or a minimum work experience of 2 years may be required for a low CIBIL loan, as it demonstrates reliability.
• Residency and Age: An instant loan for low CIBIL score holders is approved only if the applicant is an Indian citizen and is within the required age limit, which is usually from 21 to 60 years of age.
• Bank Account: Having an active bank account is necessary for getting a loan without credit score or with low credit score, as it is required for reviewing the cash flow history, and used for direct fund disbursement.

Tips to Get Urgent Loan with a Bad Credit History

While obtaining a bad credit loan in India can be challenging, it is not impossible. Here are some tips you can follow to get urgent loans with a bad credit score:

NBFC Personal Loan for Low CIBIL Score

NBFC or Non-Banking Financial Company is a registered institution under the Companies Act, offering financial services like loans, insurance, leasing, and much more.

If you want to get an online loan with bad credit in India, then NBFCs are an ideal solution for you. These institutions are known for offering a swift solution for urgent financial needs despite someone having a low credit score. They consider factors other than credit history to assess eligibility for a loan, making it possible to secure a loan efficiently.

Some factors that NBFCs take into consideration other than credit score are:

• A steady and sufficient income source
• Repayment capacity
• Collateral
• Borrowing a smaller amount within the repayment capacity.
• Offering a legitimate need for the funds.
• Loan-to-Value Ratio

Opt for a Secured Personal Loan

Another way to get an online loan with bad credit in India is to opt for secured personal loans. Unlike unsecured loans, a secured personal loan requires collateral security such as assets or property, which will help reduce the lender’s risk and improve your approval chances. 

While a bad credit historymight affect the interest rate, a secured loan will still offer more competitive rates compared to unsecured options. However, ensure that you opt for a reputable lender who can offer you a personal loan for a bad credit history while also helping you rebuild your credit over time.

Suggested Read: 7 Proven Steps to Apply for a Personal Loan with Bad Credit

Get a Guarantor On-Board

A personal loan guarantor can also help you get an instant loan for bad credit. These guarantors act as a backup for you, committing to repay the loan in case you are unable to do so. It’s similar to having someone vouch for your credibility. As a result, lenders gain more confidence in providing you with the loan, as they now have an additional assurance of repayment.

Apply for a Smaller Loan

Since people with low credit scores are often considered higher risk, lenders are unlikely to approve large loan amounts for them. On the other hand, lenders are likely to feel more comfortable approving small loans for bad credit borrowers. 

Improve Credit Before Applying

The last but the most important tip is that if you can afford to wait, consider building and improving your credit history over time. A good credit score will not only help you get the loan instantly but also ensure better interest and terms on the loan. Improving your credit score starts with getting rid of as much debt as possible and keeping your loan payments up to date.

Suggested Read: 9 Best Practices to Improve Your Credit Score

Documents Required for a Low CIBIL or Bad Credit Loan

The process of getting an instant loan with a low CIBIL score often requires minimal documentation.

• Duly filled loan application form.
• Recent passport-sized photographs.
• Identity proof – Aadhaar card, PAN card, passport, voter ID, or driver’s license.
• Proof of residence – Aadhaar card, passport, utility bills (electricity, gas, water, etc.), ration card, or rental agreement.
• Income proof – Salary slips and bank statements showing salary credits for the last 3-6 months or Form 16 for salaried individuals; and last 2 years’ income tax returns, last 6 months’ bank statements, business license or registration, or business GST details for self-employed individuals.

Conclusion

While obtaining urgent cash with bad credit is challenging, it is possible with the right method. Even though bad credit loans may come with higher interest rates and stricter terms, they provide essential financial support during emergencies.

If you are looking for an NBFC to get an instant personal loan or small business loan, consider Muthoot Finance. With flexible eligibility, competitive interest rates, and easy documentation, we are a one-stop solution for all your financial needs.