Last Updated on May 22, 2023 by Harshit Singh
Financial emergencies might spring up at any time; when they do, many of us usually withdraw our savings. However, when you don’t have sufficient savings or do not want to redeem your investments, you can apply for an instant personal loan. Many banks have made acquiring a personal loan easy, and you can easily get an instant loan without credit score.
These instant personal loans offer funds at the earliest so that you can meet your financial obligations. However, in some instances, when you apply for such loans, the lender checks your credit score before sanctioning the funds.
But what is a credit score? And how does it impact your process of borrowing? Let’s read further.
Table of Contents
What is a credit score?
The credit score is a numerical figure ranging between 300 and 900. It measures a borrower’s creditworthiness, i.e., can the borrower repay the loan sought?
Authorised credit bureaus like TransUnion CIBIL calculate and publish the credit score. It has, in fact, come to be called the CIBIL score. Other credit agencies such as Equifax, Experian, and CRIF Highmark also conduct credit analysis and assign scores. The score is calculated based on your past credit patterns and credit history.
For borrowers with a good credit score, like 650-700, can easily get the loan, whereas someone with a low CIBIL score or no CIBIL score can get a loan through these means –
7 ways to get an instant loan without a credit score
Secured loan options
If you want to secure an instant loan without a credit check, the easiest way is to apply for a secured loan. It is granted against an asset that you mortgage with the lender. The loan amount is equivalent to or lower than the asset, as, in case of default repayment, the lender can seize and sell the asset to recover the loan amount.
Pro tip: You can apply for a secured loan by mortgaging assets such as gold, securities, real estate, etc., and get an instant loan against their value.
Co-borrowing
It is a process when a co-borrower, preferably a related individual, applies for the loan with you. When you add a co-borrower, the co-borrower’s credit eligibility is considered. It enhances the overall eligibility qualifications and allows lenders to offer you the loan even without a credit score.
Pro tip: Look for a co-borrower with a high credit score and a stable source of income to get the funds easily and instantly.
Add a guarantor
A guarantor is different from a co-borrower. A co-borrower shares the loan responsibility; conversely, a guarantor promises to repay the loan if you fail to do so. By adding a guarantor, the lender is assured of the repayment, so the loan is offered easily.
Pro tip: Choose a guarantor with sound financial standing and a high credit score.
Apply for a small loan amount
Few banks easily sanction small loans without a CIBIL score. It usually happens when the default repayment is small. For someone who doesn’t have a low or no CIBIL score, it is an opportunity to build creditworthiness by paying the loan amount according to the repayment plan.
Pro tip: The small loan amount usually comes with similar high-interest rates. Therefore, consider the interest rate before applying for a small loan.
Look for NBFC or HFC lenders
Non-Banking Financial Companies (NBFCs) or Housing Finance Companies (HFCs) have lenient loan sanction conditions. You can reach out to them for an instant loan when you don’t have a credit score. Such financial institutions might offer you the loan at relaxed eligibility parameters.
Pro tip: Compare the NBFCs and HFCs willing to offer you the loan. The interest rate would be higher since the institutions take a significant risk in sanctioning the funds. When you compare, you can find the best rate on the loan.
Get an NA/NH remark on the report
A Not Applicable (NA) or a No History (NH) remark on the credit report means you are new to the credit world. This shows that you have never availed credit so far. Many lenders make a concession for reports with the NA or NH remark. So, get this remark from the credit bureau and then apply for the loan.
Pro tip: Despite the NA or NH remark, not all lenders might be willing to offer the loan. You would have to find potential lenders who would be interested in advancing the funds.
Get a loan on your income proof
Instant personal loans are usually issued based on your income. Therefore, by showing a stable source of income through your salary slips or audited financial statements, if the lender finds your income level desirable, they would mostly sanction the loan.
Pro tip: When submitting your income proof, submit a statement that shows all your income sources, like the ITR. If you have multiple sources of income, it improves the chances of loan sanction.
Conclusion
Securing an instant loan without a credit score is not impossible in India. Use the ways mentioned in this blog to avail an instant personal loan for financial emergencies even when you don’t have a credit score or if your credit score is too low to qualify for the loan.
FAQs
Can I get a loan without a credit score?
Not having a credit score or a very low CIBIL score can lead to the rejection of your loan application. However, when it comes to instant personal loans, there are ways mentioned in this blog in which you can avail a loan even without a credit score.
Can I get an instant loan without income proof?
Can I apply for a short-term loan without a CIBIL score?
As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.
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