For availing any credit facility one has to follow the rigid procedure. Submit the income proof, get the documents verified and then the eligibility amount is decided. For any loan this cumbersome procedure is to be followed. To procure the personal loan from any financial institution, the same process is carried. As known PL can be taken for financing any of the personal needs, it helps the borrower to fulfill his/her immediate needs.
There is no predetermined usage of the funds availed under this use and hence can be used for various purpose. It is an unsecured loan that provides the flexibility to the borrower to avail loan without much hassle.
But the concern is that is it possible to get personal loan without CIBIL verification. Before approving any application, the lending company verifies the applicant’s credit score. CIBIL verification is mandatory to avail all types of loan. If we talk about PL then this loan is provided without any security and it becomes important for the lender to check the past record.
The credit history becomes the basis on which the approval of loan depends. And it is on the basis of this CIBIL report that the lending rate is decided. If the customer has a good track record then the loan is provided at low interest rate. Though difficult but it is not impossible for the people with poor credit score to get the loan.
Which Bank does not Check CIBIL
The banks that offer pre-approved loan do not check the credit score. The pre-approved PL is provided to the existing bank customers. So, in the case of pre-approved loan, the Bank does not check the CIBIL.
Which bank gives personal loans with bad credit in India
It is not impossible to get the loan with bad credit. There are various banks and NBFCs that approve the application of candidates with bad credit score. The people whose credit report is not generated because they have not availed any credit facility in the past can get the loan. But for people who have defaulted in paying past debt getting a fresh loan approved is a real challenge. In such case, you can try these following tips and get your application approved.
- Add your Spouse’s Name – Don’t worry if your score is low. Your spouse may help you out. Add your spouse as a co-applicant if his/her credit score is good. This will increase your credibility and bank may feel safe to lend you money.
- Collateral Loans – If not a secured loan, apply for the loan against security. You can take a secured loan against collateral including shares and fixed deposits. You can even avail a gold loan or loan against property.
- Peer to Peer Lending – Peer to peer lending is popular in foreign countries. The rate of interest on such credits is usually higher but can be easily arranged.
- Apply for Loan in Finance Company – There are some finance companies that target the candidates with the poor CIBIL score. They provide you with the loans without going through your credit history.
Personal Loan Eligibility Calculator
Eligibility calculator is a methodical way of calculating the loan amount an individual is eligible to receive. It is a systematic way of computing the amount a lender can disburse to the borrower based on his repayment capacity. The income of the customer, savings, rate of interest and tenure of the loan are taken into consideration while computing the eligible loan amount.
Let’s use an example to learn how is the personal loan eligibility amount decided by the banks and other lending institutions.
Illustration: The monthly income of an employee working in a reputed company is ₹ 80,000. He wants a personal loan for some reason. After meeting all his expenses he is able to save 50% of his income which is ₹ 40,000. He applied for the personal loan in a bank. The bank after verifying his net income will calculate the eligibility amount using the below mentioned formula:
Personal Loan Eligibility Amount = ₹ 1,00,000 x Savings/Per Lakh EMI
Per Lakh EMI for –
Tenure – 4 years
Interest Rate – 14.50% p.a.
EMI Amount = ₹ 2,758
So, the eligibility amount = 1,00,000 x Savings/EMI
= 1,00,000 x 40,000/2,758
= ₹ 14,50,327