Today, getting a personal loan has become quite easy, but banks almost always check your CIBIL Score first. If you have never taken a loan or a credit card before (known as ‘New to Credit’ or NTC), your CIBIL score is usually zero or -1. In such cases, getting a loan from traditional banks can be a bit challenging.
However, this doesn’t mean you can’t get a loan at all! There are several valid and simple ways to arrange funds during an emergency even without a CIBIL score. Let’s find out how:
1. Opt for Secured Loans (Gold or FD Loan)
The safest and fastest way to get a loan without a credit score is to take a secured loan. Since you provide the bank with a guarantee (collateral), they do not require a CIBIL score.
- Gold Loan: You can easily get a loan against your gold jewelry from any bank or NBFC (like Muthoot Finance, Manappuram).
- Loan Against FD: If you have a Fixed Deposit (FD) in a bank, you can get a loan of up to 80-90% of your FD amount. The interest rate on this is also lower than a regular personal loan.
2. Apply Through Fintech Apps and NBFCs
Nowadays, there are many mobile applications and Non-Banking Financial Companies (NBFCs) that provide loans based on your current income and bank statements instead of your CIBIL score.
- These apps analyze your monthly salary credits, spending habits, and utility bill payments to gauge your creditworthiness.
- If you have a regular income, you can easily get a small initial loan (e.g., ₹5,000 to ₹25,000).
3. Add a Guarantor or Co-Applicant
If you don’t have a CIBIL score, you can add someone (like your parents, spouse, or sibling) as a co-applicant to your loan application, provided they have a very good CIBIL score (750+).
- The bank will approve the loan based on the co-applicant’s credit score and income.
- Note: If you miss paying your EMIs, it will negatively impact your co-applicant’s CIBIL score as well.
4. Peer-to-Peer (P2P) Lending Platforms
P2P lending is a modern and popular concept. These are websites and apps that directly connect borrowers with individuals (investors) who want to lend their money.
- Instead of enforcing a strict CIBIL score requirement, P2P platforms focus on your overall profile and repayment capacity.
- Keep in mind, however, that the interest rates on these platforms might be slightly higher.
5. Salary Advance or Employer Tie-ups
If you work in a reputed company, you can directly request a salary advance from your employer.
- Many companies also have tie-ups with specific banks or fintech firms, allowing employees to get short-term loans based on their next salary without any credit checks.
- Check Interest Rates: Unsecured loans given without a CIBIL score (especially from apps) often carry much higher interest rates. Read all terms and charges carefully before proceeding.
- Beware of Frauds: Only apply for loans through RBI-approved and registered NBFC/Bank apps. Always check user reviews before giving any app access to your phone’s data.
- Build Your CIBIL: Once you get your first small loan, make sure to pay all EMIs on time. This will build a healthy CIBIL score, allowing you to get larger loans at much cheaper interest rates from major banks in the future.