Obtaining a loan in the realm of personal finance can be difficult at times, especially if your credit isn’t perfect. Non-Banking Financial Companies (NBFCs) offer a ray of hope to people in difficult credit situations by customising solutions. This article explains NBFC Personal Loan for Bad Credit.
Top Offering NBFC Personal Loan for Bad Credit
| NBFCs | Interest Rate (p.a.) | Processing Fee |
| Muthoot Finance | 14% onwards | Up to 3.5% |
| Tata Capital | 10.99% onwards | Up to 2.75% |
| Bajaj Finserv | 11% onwards | Up to 3.93% |
| StashFin | 11.99% onwards | Up to 10% |
| Faircent | 9.99% onwards | Up to 8% |
| KreditBee | Up to 29.95% | Up to 6% |
| Navi | 9.9% – 45% | NIL |
| Money Tap | 13% onwards | NIL |
| Dhani Loans | 13.99% onwards | 3% onwards |
| Money View | 15.96% | Starting from 2% |
| Pay Sense | 16.80%-27.60% | Up to 2.5% |
| Early Salary | 24%-30% | Up to 2% |
| Home Credit | 24% onwards | Up to 5% |
| CASHe | 27% onwards | Up to 3% or Rs 1,200 |
| HDB Financial Services | 12%-31% | Up to 3% |
What is a Bad Credit Score?
The range of 300 to 579 for a credit score is considered unfavourable and indicates a greater likelihood of credit problems. It becomes harder to obtain loans or credit on favourable terms due to a pattern of late payments, defaults, or excessive credit use being shown.
While a fair score, which ranges between 580 and 669, indicates some credit issues, it may still be sufficient to obtain some loans. Good credit scores, ranging from 670 to 739, demonstrate responsible credit management and increase your borrowing options. Offering the best rates and terms, very good (740-799) and excellent (800-850) credit scores demonstrate strong financial health and credibility to lenders.
Can I get a Personal Loan from NBFC with a Bad Credit Score?
Credit scores in the 500-600 range are considered poor. A low credit score may limit your options, but it will not keep you from getting a personal loan from an NBFC. Unlike banks, NBFCs often accept applications from people with bad credit. In addition to your credit score, they consider your income, employment stability, and ability to repay debt. Thus, obtaining a loan from an NBFC is possible.
NBFC Personal Loan for Bad Credit?
Having good credit is essential to building your credibility. Securing favourable terms for credit and loans is also dependent on it. Lenders can determine that you are a responsible borrower who will likely make timely loan repayments based on your strong credit history. However, having average credit may also increase your chances of getting approved for a loan. This is the method.
- Approach Non-Banking Financial Companies (NBFCs): Loan options from NBFCs should be sought, as they may be more accommodating to borrowers with low credit scores, despite strict credit score requirements that may be imposed by conventional banks. NBFCs are known to have more lenient lending standards and are often willing to consider a wide range of factors, such as income, repayment capacity, and job stability.
- Opt for Secured Loans: Collateral, like a vehicle, piece of real estate, or fixed deposit, is needed for secured financing to support the loan amount. Because they have an asset to use as a guarantee in the event of default, NBFCs are more likely to approve a secured loan. Even if your CIBIL score is low, you have a better chance of getting approved if you choose a secured loan. But keep in mind that losing the pledged asset is a possibility when defaulting on a secured business loan.
- Explore Peer-to-Peer (P2P) Lending: P2P lending platforms enable direct communication between lenders and borrowers. In contrast to traditional NBFCs, these platforms frequently have different eligibility requirements. They consider a variety of factors, including your financial situation, loan intentions, and even your CIBIL score. If you have bad credit, peer-to-peer lending could be a good way to get a loan.
- Apply for a Smaller Loan Amount: If you have a low CIBIL score, ask your preferred NBFC for a smaller loan to increase your chances of approval. Regardless of your credit history, NBFCs may be more willing to consider your application if the funding amount is small because it poses less risk to them. Taking out a smaller loan also allows you to focus on improving your credit score by making timely payments.
- Show a Stable Income: Lenders with NBFCs are more inclined to lend to people who have a reliable source of income. Regular income gives the lender confidence that you will be able to make loan repayments on schedule. Therefore, when applying for a loan, make sure to highlight any steady employment or consistent revenue from your business.
- Improve your Credit Score: Finally, aim to gradually improve your CIBIL score. Even if the results are not immediate, they will have a positive impact on future NBFC loan applications. Reduce your credit card debt, stop making unnecessary credit inquiries, and make on-time payments on bills and current loans. Over time, your credit score will rise, allowing you to obtain better loan terms.
Conclusion
NBFC Personal Loan for Bad Credit, Don’t worry if your CIBIL score is low; it doesn’t always mean you can’t get a loan. You should assess your financial status, take into account other NBFC loan apps, and follow sound financial practices to increase your chances of getting approved for a loan. When trying to raise your credit score, persistence and patience are key. You can create a more promising financial future for yourself by being resolute and making wise financial decisions.