How to Get a Personal Loan Without a CIBIL Score: Tips and Strategies

In case you cannot submit your CIBIL score while applying for a personal loan, you can still try these strategies.

Check the Bank’s Eligibility Criteria Carefully

It’s important to scrutinize the bank’s eligibility criteria minutely, since some small finance banks and other institutions may leave some elbowroom for new borrowers. They may give you an opportunity to apply on the basis of other criteria rather than just your CIBIL score. So, checking the guidelines first is a good way to start. 

Consider Applying with a Guarantor

Personal loans are generally unsecured, i.e. they do not require collateral or guarantors. Yet, if you don’t have a CIBIL score, you may have to consider applying with a guarantor. In case this individual has a healthy credit score, you may be able to get the loan without any hassles. 

This person’s credibility is what will make up for the absence of a CIBIL score. However, know that he/she is liable to repay your loan in case you default on it, so make sure you repay the amount responsibly. You can choose a parent, spouse, sibling, or any relative with proper income proof and a good CIBIL score. 

Apply for a Smaller Amount

In case you’re new to borrowing and do not have a CIBIL score, you can try applying for a smaller amount initially, based on your income. It is a good strategy, since a smaller amount is more likely to be approved, and you can also build up a CIBIL score by repaying the loan responsibly. Many lenders may approve smaller amounts, due to the lower risks, especially if your income is sufficient for repayment. Once you get to a healthy CIBIL score by repaying this loan comfortably, you can access bigger amounts in the future. 

Apply for the Personal Loan with Income Proof

Another way is to apply for a personal loan with your income proof. It will show the lender that you are financially stable and can repay the loan comfortably without any hassles. You will have to submit bank statements (last 3-6 months) and salary slips or IT returns, depending on the lender’s requirements. In fact, if you work for a reputed employer, the lender may be more likely to approve your application based on your income. 

Consider Providing Collateral for the Loan 

Since you don’t have a CIBIL score, you can also try pledging collateral that negates the risk of the lender. You can pledge almost any asset as security, including a fixed deposit and other investments or even gold and property. Lenders may be more willing to approve your loan since the risk is covered by the asset. Once you repay the loan responsibly and build your CIBIL score, you can apply for future personal loans without having to pledge any collateral. 

Get the HN/NH for Your Credit Report

If you have not been financially active, you can address it while applying for the personal loan. A NH (no-credit history) remark on the credit report will indicate that you have never applied for any loan or credit card in the past. This does not mean that you are a risky borrower or have negative financial credibility. When you apply for the loan, offer a detailed summary of your financial background and the reason behind the absence of any credit activity. This may include your stable income and savings or earlier examples of responsibly managing your funds without any borrowing.