Collateral, guarantor and more: 5 best options to get a personal loan with poor CIBIL score

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Getting a personal loan with a poor CIBIL score can certainly be an uphill task but it is still not impossible. There's a number of options one can avail to get the loan they want.

One can rely on non-banking financial corporation, peer to peer lending platform and guarantor to get the loan. Alternatively, one can use collateral to get the loan sanctioned.  

Loan on collateral: If you have fixed assets such as a real estate, you may be able to get a secured loan where the lender uses the asset as collateral. With collateral involved, lenders are usually more willing to overlook a poor credit score.

Loan against FD: If you have fixed deposits in a bank, you can avail a loan against them. Since the fixed deposit serves as collateral, the bank may be willing to provide a loan even with a poor credit score.

Peer-to-Peer (P2P) lending: P2P lending platforms connect borrowers directly with individual lenders. They are usually more flexible in their criteria as compared to traditional financial institutions.

ALSO READ: How to improve CIBIL score? Here are 8 effective ways

Guarantor: Having a guarantor with a good credit score raises your chances of getting approved for a personal loan. The co-signer agrees to repay the loan if you default, providing the lender with additional security.

NBFCs: Some NBFCs are usually more willing to lend to individuals with poor credit scores, although they may charge higher interest rates to compensate for the risk.

It’s vital to consider the terms and conditions of any loan offer, especially when dealing with alternative lenders who may charge higher interest rates or impose stricter repayment terms. 

While it may not be an immediate solution, working to improve your credit score over a period