How to get a personal loan without hurting your CIBIL score
As there are no restrictions on the end use of a personal loan, you can use the funds obtained to finance a luxurious holiday, foot medical bills, host a lavish wedding, or meet any other important expense. While personal loan eligibility criteria are simple, every time you apply for a personal loan your lender incites a hard inquiry into your CIBIL report to assess your creditworthiness. Multiple hard inquiries adversely affect your CIBIL score and so, as you reach out for funding, you need to find ways to protect your score.
To help you, here are some ways by which you can get a personal loan without hurting your CIBIL score.
Avoid applying for a personal loan with multiple lenders
While shortlisting lenders that promise the lowest interest rates in the market is key to the borrowing process, applying to all of them is not. This is because the personal loan interest rates on offer for you are dependent on your credit profile and multiple applications made during a short frame of time hurt your CIBIL score. With each application, a hard inquiry is incited, and each hard inquiry causes your score to drop by 3 to 4 points. Hence, it is more important for you know your CIBIL score, improve it, and use it to secure a good deal from one lender only. To initiate a check, free CIBIL score provisions are offered on CIBIL’s official website and via Bajaj Finserv too.
Research beforehand to know about the available personal loan deals
An application rejection is something you would definitely want to avoid and one way to ensure that the personal loan eligibility criteria are easy to meet is to apply when your lender is running a seasonal deal. For instance, festive season offerings may include reduced personal loan interest rates, and this translates to lower overall outgo, which in turn allows you to borrow a higher principal. With good research, you can zero in on a lender with whom your application is bound to get the green light and this equates to getting a personal loan without hurting your CIBIL score.
Opt for a lender that fits your credit profile
Your current credit profile determines the probability of loan approval or rejection. Therefore, ensure that you pick a lender whose CIBIL score requirement matches your current credentials. For example, if you have a high CIBIL score, you can apply with top lenders as your score is indicative of a repayment history that’s free of defaults. However, if you have not been regular with your loan or credit card payments, you will have a low CIBIL score. So, to reduce the chances of rejection, approach personal loan lenders that accept low CIBIL scores, or apply in conjunction with a co-applicant or guarantor to boost your chances.
Take advantage of pre approved offers from your current lender
If you have a healthy relationship with a particular financial institution in addition to an excellent credit history, then the institution may offer you a pre-approved loan. What’s great here is that the institution will do a background check on your financial profile before making the offer and so, you can expect quick approval. Further, pre-approved offers are made based on your experience with the institution and so, no hard inquiries are typically incited into your credit report.
Do not cancel your loan after applying with a lender
Lenders offer you loans, as mentioned before, after initiating a hard enquiry into your credit report and checking whether you meet the personal loan eligibility criteria. The key to applying wisely is to zero in on a lender and stay put once you’ve applied. While you can cancel an application, you must be aware of the demerits of doing so. In simple terms, if you make a fresh application with another lender, your score will drop a few notches more and you may not be able to secure the marginally-better interest rate on offer. Further, you may come across as someone who jumps ship easily and this may be the cause of a higher interest rates being levied.
Now that you know of the best ways to get a personal loan without negatively affecting your CIBIL score, choose an offering such as the Bajaj Finserv Personal Loan as it grants access to loans of up to Rs.25 lakh at nominal personal loan interest rates. Moreover, the personal loan eligibility criteria listed are simple, the documentation requirement minimal, and you can get approval within 5 minutes of making an application online. Additionally, Bajaj Finserv offers you the Flexi Loan facility, through which you can borrow from your sanction in parts, while limiting your interest payments to the amounts withdrawn only.
Finally, to get personal loan from Bajaj Finserv without damaging your CIBIL score, check your pre-approved offer as doing so gives you instant approval by way of a customised deal.
Disclaimer: This content is distributed by Bajaj Finserv. No HT Group journalist is involved in the creation of this content.
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