As the name suggests, an instant loan serves as a lifeline in unforeseen situations like medical emergencies, urgent home repairs, or unexpected travel plans. While individuals with strong credit scores can easily secure a travel loan from top lending institutions online, those with less-than-perfect credit scores may face challenges. The good news is that there are loan apps available that offer instant loans without performing a CIBIL score check. Let’s explore how you can obtain an instant loan without a CIBIL score check and the benefits these solutions offer.
Tips to Obtain an Instant Loan Without a CIBIL Score Check
Here are some practical ways to obtain a loan without a CIBIL score check-
1. Choose Collateral-Based Loans
One of the simplest ways to secure a loan without a CIBIL score check is by taking a collateral-based or secured loan backed by assets such as property, fixed deposits, securities, or even gold. Lenders are more willing to offer loans when a valuable asset is pledged as security. The lender’s risk is reduced since, in case of default, they can seize the collateral to recover the loan amount.
2. Find a Guarantor
Another option to bypass the CIBIL score check is to apply with a guarantor. A guarantor is someone, like a family member or friend, who promises to take responsibility for the loan if you are unable to repay it. For this, your guarantor must have a strong credit score and a reliable income source. Having a guarantor assures the lender that if you default, the guarantor will step in and pay off the remaining loan.
3. Apply with a Co-Applicant
If you don’t have a good credit score or any credit history, applying with a co-applicant can significantly improve your chances of loan approval. A co-applicant is usually a family member with a strong credit score and stable income, like a spouse or parent. By submitting a joint application, lenders are more likely to approve the loan since the co-applicants financial strength reduces the overall risk for the lender, offering them added security. This strategy is beneficial for first-time borrowers or those with poor credit scores.
4. Prove Your Creditworthiness
Even if you lack a formal credit history, you can still prove your creditworthiness through alternative means. Lenders often consider your monthly income, employment stability, and bank statements. By showing a steady source of income through salary slips and bank statements, you can assure lenders that you can repay the loan. If you can demonstrate that you are financially responsible, even without a credit score, many lenders may still be willing to offer you a loan.
5. Apply for a Lower Loan Amount
If you don’t have a credit score, requesting a smaller loan amount increases your chances of approval. Lenders view smaller loan amounts as less risky and may be more inclined to approve a loan when the requested amount is within manageable limits. While the interest rate on such loans might be higher due to the lack of credit history, securing and repaying a smaller loan can help you build a positive credit profile for future loans.
6. Go for Non-Banking Financial Companies (NBFCs)
NBFCs offer a more flexible option for instant loans without a CIBIL score check. They usually have more lenient eligibility criteria than traditional lenders, as they focus on other factors like income stability, profession, and repayment capacity rather than relying heavily on the CIBIL score. NBFCs can be a reliable source of instant loans, especially for first-time borrowers, freelancers, or individuals with minimal credit history.
7. Ascertain Eligibility in Advance
Before applying for a loan, checking the lender’s eligibility criteria is wise to avoid unnecessary hard inquiries affecting your credit score. Hard inquiries are triggered when lenders check your credit score during the application process. Too many hard inquiries in a short span can further reduce your credit score and lower your chances of loan approval.
Conclusion
Obtaining an instant loan without a CIBIL score check may seem daunting, but several options are available to make this possible. Whether you opt for collateral-based loans, find a guarantor, apply with a co-applicant, or seek loans from NBFCs, the key is to demonstrate your creditworthiness through alternative means. Always ensure you understand the loan terms and aim to repay on time to avoid further financial complications.
