A credit score which is also popularly known as the CIBIL score is a number in the range of 300-900 and is assigned by the credit bureaus (CIBIL, Experian, Equifax, or CRIF High Mark). This score is calculated based on how you handle your existing credit.
Whenever you apply for a loan, like a car loan or a home loan, the lender checks your credit score and credit history from the bureau before approving a loan. This is one of the important steps of loan approval and is followed religiously whenever you apply for a loan from organized credit. Off late, many lenders base your interest rates on your credit score and credit report. If you have a good credit score then the entire loan approval process becomes quite easy.
With credit score assuming so much of importance, are you thinking about how to get a loan without CIBIL verification? A person can be new to credit or maybe a CIBIL defaulter with a bad credit score. In such cases, availing a loan that doesn’t need CIBIL verification may be your best bet.
Are there any such loans? You may ask. Yes! There are a number of loans that can be availed without CIBIL verification. Discover them now!
A gold loan is one of the easiest loans that can be availed without CIBIL verification. Gold held with you in the form of ornaments, bars or coins can be pledged to get a loan.
How can you avail of a gold loan?
With the changing lending climate, many private gold loan players are now offering gold loans with home service. Or you could also approach banks or NBFCs who offer gold loans with the gold that you wish to pledge for a loan.
The gold is apprised for its quality and a loan up to 75% of the value assessed is allowed as a loan. Considering the current economic situation due to COVID, the RBI has allowed gold loans that can go up to 90% of the value of the pledged gold.
The only documents you would need to avail of a gold loan are your KYC documents. As an asset is pledged to avail of the loan, there is no requirement of a CIBIL verification. The repayment of the loan is done in easy loan EMIs after which you can get the gold back.
Loan against Fixed Deposit
A fixed deposit is also an asset where the money is invested for a higher return. This asset can be pledged to avail a personal loan.
How can you avail loans against FD?
You can approach the bank/NBFC where you have a Fixed Deposit and request to avail a loan against the existing FD. As you are an existing customer of the lender, you wouldn’t have to submit a number of documents or be subject to CIBIL verification.
Up to 85% of the value of the Fixed Deposit can be availed as a loan. One of the greatest advantages of a loan against an FD is that the interest continues to accrue on the Fixed Deposit during the tenure of the loan. However, you will not be able to close the FD before the closure of your loan. Also if the loan is not paid back, you end up losing the FD.
Loan against a Property
Gold loans or loans against a fixed deposit may work for smaller amounts. But what if you have a bigger loan requirement? It could be for starting a new business, construction of another property, or meeting expenses such as a wedding or higher education? A loan may be availed against an existing property – commercial or residential.
How can you avail a loan against property?
You could pledge your property to avail of a loan against the same. Here, there will be a property evaluation conducted by the lender’s team to assess the value of the property. Also, a clear title, good upkeep of the property, etc will play a part in assessing the value of the building. A loan amount of 60-75% of the assessed value may be sanctioned based on your monthly income and existing EMIs.
As this is a big-ticket loan, the tenure of the loan can run up to 15-20 years.
Loan against Securities/Insurance Policies
Loans could also be availed against the security of equities, mutual funds, or even money back/endowment insurance policies. The value of these instruments would be assessed and a loan to the asset value of 50-75% will be maintained. This is done considering the volatility of
the securities. The process of availing the loan will be similar to the process of availing a loan against property.
Loans from Fintech Lenders
But what about those individuals who do not have an asset to pledge and are either new to credit or have bad credit? How would they be able to avail a personal loan without CIBIL verification?
Do not worry! There are fintech lenders like Money View who lend personal loans between Rs 10000 and Rs 5 lakhs even to those with a low credit score or no credit score. This way you can easily get a personal loan, on your mobile or a computer, without any hassles of submitting documentation or even visiting a bank.
How to apply for a personal loan from Fintech lender?
You would just need to submit your personal loan application either on the app or the website of the lender, undergo an instant eligibility check, submit documents and choose the loan amount and tenure of your choice. This feature comes as a boon, especially during the pandemic when stepping out of the home may not be safe for you yet.
So having a low/no credit score is not a barrier to availing a loan anymore. Choose from one of the many options mentioned above and borrow to meet any of your needs. But make sure you pay your loan back on time to maintain a good credit score and your ability to avail credit in the future.