How to Apply for an Instant Loan When You Have a Low Credit Score?
When you need money fast, it can be tempting to turn to online loan apps. But if you have bad credit, you might be wondering if you’ll be able to get a loan.
A low credit score can be a major barrier to getting an instant loan. However, there are a few options available for those with less-than-perfect credit.
Ways to get a loan with a low credit score
1. Apply for a loan with an online lender
A great option for borrowers with low credit is to apply for a personal loan with a lending institution that has more lenient eligibility requirements. There are a number of these lenders available online and they may be able to provide you with the funds you need.
You can check out offerings of NBFCs or personal loan apps. With an increase in digitization in the economy, there are a number of these apps available today. The app will likely require you to provide some basic information and you may be able to get approved for a loan in just a few minutes. Personal loan apps can be a great option for those with bad credit, as they often have more flexible eligibility requirements than traditional banks.
CASHe is a personal loan app that uses its credit scoring technology. We calculate a Social Loan Quotient (SLQ) using our patented AI algorithm. In addition to considering your income and credit history, we look at alternative data sources for a more comprehensive evaluation of your creditworthiness. Consequently, you can apply for a loan with us even if your credit score is low.
2. Apply with a co-applicant
A co-applicant is someone who applies for a loan with you and shares responsibility for repaying the loan. This can be a great option if you have a low credit score but want to get a loan for a much-needed purpose, like starting a business or consolidating debt.
When you apply for a loan with a co-applicant, the lender will consider both your credit histories in deciding on the loan. This can increase your chances of getting approved, and it can also help you get a lower interest rate.
If you’re thinking about applying for a personal loan with a co-applicant, be sure that both of you understand the terms of the loan. For instance, if you default on the loan, your co-applicant would be legally obliged to repay the loan.
3. Provide income proof
Some lenders might grant you a short-term loan without a great credit score if you can show that you make a high enough monthly wage. You can show proof of income through a recent salary raise, bonuses, interest on savings, and additional income sources. However, a lender may still charge you higher interest rates for the loan.
4. Check your credit report for errors
Credit reports are created by credit bureaus based on your income, credit, and repayment history, amongst other factors. Sometimes a mistake in the system, a misspelt name, or a wrong address can lead to a lower credit score.
To fix this, you can get a free copy of your credit report online from a major credit bureau. Review your credit report and check for any errors or negative information that could hurt your chances of getting approved for a loan. If you find any errors on your credit report, you can request a correction. A higher credit score might help you get over the eligibility requirement and get more easily approved for a loan.
5. Apply for a smaller personal loan amount
If all else fails, you can always apply for a smaller personal loan. If your credit score is low, the lender might not approve your loan. But if you only need a small loan, the lender may be more likely to take a chance on you. By paying off the smaller loan in timely instalments, you can work to increase your credit score and eventually be eligible for larger loans.