Urgent loan with bad credit score in India

[nikhilchauhan]

Understanding Bad credit score in India

A credit score is a report card of an individual or institution's credit behaviour, and a bad credit score reflects badly on the financial reputation. Several factors contribute to bad credit scores including missed payments on EMI, excessive credit utilization, frequent credit burrowing, etc. A bad credit score makes it difficult for a borrower to secure a loan in a time of need.

Sneak-peak on Hardship That Borrower Face to Get Instant Loan with Bad Credit Score

• Limited avenues to avail instant loan

People having low CIBIL scores can find it difficult to acquire instant loans from reputable financial institutions like banks, etc owing to high risk. These institutions are afraid that borrowers could default on the loan amount hence leaving the loan applicant with few burrowing options.

• Excessive Documentation

Institutions that provide instant loans with bad CIBIL scores like money apps, P2P, Union credit, etc often have excessive documentation processes. It increases the chances of loan rejection and can be time-consuming for the borrower. It can be a stressful and daunting process owing to limited lending options.

• Higher Loan Interest Rate

Another demerit of a bad credit score is paying a higher rate of interest on the instant loan. The lenders want to mitigate the risk of loan amount and hence charge higher interest rates to avoid financial loss. The loan tenure of such instant loans is also shorter.

• Predatory Lenders

Since the option to avail of an instant loan with a bad credit score is limited, it can result in falling into the trap of predatory lenders. These lenders can ask for an upfront fee or have hidden terms resulting in you falling into a money pit.

Guidelines For Applying for an Urgent Loan with a Bad Credit Score

• Find Reliable Lender

Several online bespoke lenders like EarlySalary, Home Credit, etc provide instant loan approval for people with bad credit in India. These platforms specialize in this area and can provide fair loan deals at the time of your need.

• Analyze Your Credit Report

The best way to know and understand your credit score is by getting your credit report from CIBIL and reviewing the same. You can look out for any errors or inaccuracies in your credit report to ensure that the credit score is accurate. You can also get an insight into reasons for bad credit scores and try improving the same.

• Negotiate With Existing Bank

Being a loyal bank customer or having a good relationship with your existing bank can help you secure a loan even with bad credit. Existing banks can help you with favourable loan applications without stress out completely.

• Read Loan Application Terms & Conditions carefully

You must read your instant loan with bad credit terms & conditions carefully before applying for the same. There can be hidden clauses, higher interest rates or processing fees that can pose a headache later on. This could help you avoid predatory lenders at bay.

• Work On Improving Your Bad Credit Score

Another way to ensure securing an instant loan for the future is to try gradually improving your credit score. You can improve your credit score by paying off your existing debts timely and trying to maintain your credit utilization. Having a good credit score will ensure instant loan approval for future needs.

FAQs

1. What is the dispersal time for instant loans with bad credit scores?
Ans. The loan dispersal is dependent on the lender. However, some institutions and online loan apps provide loan dispersal within a day.

2. How much is an instant loan interest rate with a bad credit score?
Ans. The interest rate is higher comparatively owing to bad credit scores ranging from 30% to 40%.

3. What constitutes Of Bad Credit Score?
Ans. A credit score of 550 or below constitutes of bad credit score.

4. Can you apply for an instant loan with bad credit using collateral?
Ans. Yes, you can apply for an instant loan with bad credit using collateral. The different types of collateral include houses, cars, stocks, investments, etc.

5. What are some online apps that provide instant loans with bad credit in India?
Ans. There several online apps like Credmudra, EarlySalary, Home Credit, etc provide instant loans with bad credit in India. The online loan application process is user-friendly with minimal documentation.

To sum up, a bad credit score does not mean that your loan will not be approved. You can apply for an instant loan online on a loan lending site from the comfort of your home. However, when you have a bad credit score you must apply for a small instant loan. Small loans are easily approved by lenders owing to low risk. In the event of an emergency, you can also ask your close ones for an instant loan if you have a bad credit score.