Your CIBIL credit score is the most important decisive factor in getting any type of finance or credit card. Lenders do a comprehensive credit history check in order to gauge the repayment capacity of the applicant. Apart from the credit rating, income and the company you work for also plays a key role. Higher the credit score, which is out of 900, higher would be the chances of loan approval.
But what about individuals, seeking loan with no credit bureau record or poor score. Are there any options out there in India where credit score of borrower is not checked by the lenders while granting loan or when credit score is not the only selection criteria?
Answer is YES but the options are very limited as follows. Each of these options are explained in detail below.
- Peer to peer lending companies
- Co-operative banks
- Loans against fixed deposit or LIC policy or credit card
- Private money lenders
- Loan against gold
Peer to Peer Lenders (P2PL): This type of lending is gaining attraction in India and is an excellent option, as loan approval process is not tedious like commercial banks. These financiers do not solely rely on an individual’s previous credit history i.e. even if the credit rating is checked by gathering data from CIBIL, a poor score does not necessarily mean that loan application will be rejected. Read more about peer to peer lenders.
Following P2PL do not check credit score of the loan applicant:
Co-operative banks: Apart from P2PL, co-operative banks are also an option to get a loan quickly compared to commercial banks such as public sector or private sector banks. Loan application does not go through credit history check by most of these banks. In case, you fail the credit check but your income is good and employer is big, you can convince these banks on the basis of these two plus points you have.
Loan against fixed deposit: If you have fixed deposit account at the bank but have poor credit score, then you can take loan against fixed deposit as credit check is not done. The loan amount granted is around 85%-90% of the value and can help in raising money for short term. Read in detail about the loan against FD and LIC policy.
Private money lenders: Private financiers (person / entity) are another solution for getting loan with no credit check. Only requirements are guarantor, security cheque, should have own house, and must provide income proof. Best way to look for such financiers is google search or quikr. Just search for “personal financiers in cityname”.
Loan against gold: If you have physical gold or ornaments and are in need of loan, then you can get secured loan against gold deposit with no credit check done by the lender. Such loans are offered by private gold loan companies such as Muthoot Finance, Manappuram Finance, others and commercial banks like ICICI, HDFC, Axis, SBI, and others.