If you are in need of Low Interest Rate Personal Loans and have approached a bank or an online lender for the same, chances are they may have mentioned the need for a credit history. This isn’t without reason. Since a Personal Loan is essentially an unsecured loan, the lender doesn’t have collateral to fall back on in case of defaults at your end. Hence, they rely on your repayment history, to get an insight into your financial discipline, as well as your ability and willingness to repay the borrowed amount as stipulated.
However, you may not have a credit history to show due to one or more of the following reasons:
So, does that mean that you have to put a full stop on your aim of getting a Personal Loan? Certainly not! Thankfully you have more than just a few ways to borrow the requisite amount even in the absence of your repayment history. Of course, you may have to face some hurdles, but with proper planning, and a commitment to prove yourself worthy of the credit, you can get an HDFC Bank Personal Loan or any Personal Loan for that matter. Want to know how? Well, simply follow the below-mentioned tips:
A Credit Card is possibly one of the most efficient tools to build your credit history. While it is usually easier to get a Credit Card if you have a proof of employment, you can still manage to get one, if you can prove that you receive a monthly allowance from your family, and can use the same to pay off your bills.
Once you get the card, you must follow some practices such as using the card only up to 30% of your monthly credit limit, as a sign of your financial discipline. Next, you must pay the outstanding balance on your card, every month, before the due date. This will help the credit bureaus build faith in your ability and willingness to pay. Keep doing so for a few months, and before you know it, you will be enjoying a credit score, and a good one at that!
If you don’t want to go the Credit Card route, due to the shortage of time, or resources you can choose to apply for a Personal Loan with the help of a co-applicant. Your co-applicant can be anyone, right from your father, mother, sibling, a friend or even an acquaintance who enjoys a good credit score, and is willing to help you out.
While this can help you get access to the loan, you must ensure to repay the same with the utmost sincerity, in a time-bound manner. Failure to do so may put your co-applicant on the line, and their CIBIL Score may get an unsolicited blow. What’s worse is that your already non-existent history will be impacted adversely.
Yes, Personal Loans by their very definition are devoid of the need for collateral. However, in times of desperation, due to lack of the much-needed time to build a credit history, you can offer the lender with collateral such as your house, vehicle or shares or equity. This may reduce the risk proposition that the lender would have to bear otherwise, thus encouraging them to approve your Personal Loan application.
If you enjoy a steady source of income, whether as a salaried individual, a business owner, or as a self-employed professional, and can offer proof of the same, you might have a shot at getting your Personal Loan application approved. In this regard, you can get in touch with the bank officials to help them understand your unique situation, and more often than not, they will help you get the much-needed go-ahead. In this case, it would prove to be in our benefit, if you have a home, an office or some other valuable property under your name to demonstrate your financial prowess and ability to repay the loan.
Your search for Low Interest Rate Personal Loans can often end when you approach an online lender. It is no hidden fact that traditional lenders are often more stringent with their rules as compared to online loan aggregators. Hence, if you have a steady influx of money and can prove the same, an online lender can prove to be your best bet while applying for a loan without a credit history.
We hope that using the above measures will help you get closer to your goal of procuring low interest rate Personal Loans in a bid to fulfil your personal obligations.
Also Read: Does Your Credit Score Impact All Loans?
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.