Emergencies strike without warning, and you may not always be financially equipped to deal with them. If you have a poor credit record, getting a loan urgently may even seem impossible.
Do not worry. A poor credit history need not get in the way of the financial help you need. Let us tell you about bad credit loans and other alternatives that you can consider.
Bad credit loans
Bad credit loans are a type of secured or unsecured loans meant for those borrowers who have a poor credit history. These loans allow you to get cash quickly but may come with a higher interest rate.
Loan approval for a bad credit loan may depend on a number of factors including your monthly income, age, and repayment capacity.
But before you think of getting a bad credit loan, it is advisable that you take stock of your credit score. You can check your CIBIL Score online for free in just a few simple steps with the Bajaj Finserv Credit Pass. You can get an annual subscription and monitor your credit score with ease.
While a CIBIL Score of 750 or higher is considered ideal, a bad score can be improved on by implementing a few simple practices. Start by paying your credit card bills and loan instalments on time. Review your credit report and spot errors, if any. And most importantly, avoid applying for multiple different types of loans in quick succession.
Other emergency loans
- Gold loans: If you own gold jewellery, you may consider pledging it as collateral and availing of money against it. The loan amount is determined by the value of the gold and approval need not depend on your CIBIL Score.
Check out our Gold Loan and see how you can avail of one
- Other secured loans: You may also be able to avail of a loan against property such as your house or a shop or get a loan against your car. The loan amount is likely to depend on the value of your collateral. You can repay the loan over a reasonable tenure.
- Personal loans: While these come with tight eligibility criteria and a strict criteria for credit scores, some lenders may make exceptions and offer personal loans to customers with a low score.
- Co-applicant loans: If you have a low credit score, you could consider having a friend or a family co-sign your loan application. Just ensure that your co-applicant has a good credit history. But remember, your co-applicant will share the responsibility of loan repayment with you.
You now know of the various kinds of loans available. But remember that being responsible with your loans and maintaining a good CIBIL Score goes a long way in getting approval and better terms on your loan.
Tools such as the Bajaj Finserv Credit Pass can help you manage your credit profile.
