Seeking a loan with a poor CIBIL score? Here are 3 key tips to help you secure funds

livemint.com:

Managing to raise a loan with a poor CIBIL score can be tough, but it’s not impossible. There are a number of ways to do so. 

For instance, you can opt for a smaller loan in the beginning.Thiscan, at times, raise your chances of approval, particularly if your income can easily cover the payments. Banks are likely to be more willing to lend to a borrower with a poor credit score for a smaller loan.

ALSO READ: How to secure a personal loan with poor credit score? Here are the steps to help you get approval

Meanwhile, it is also important to work on improving your credit score. This can happen by paying all your bills on time, reducing your credit card balances, and refraining from applying for new credit unnecessarily. 

Apply for a secured loan: A secured loan is backed by collateral, such as your home, car, or savings. Banks may be more willing to approve a secured loan because they have something to repossess if you default. 

However, keep in mind that defaulting on a secured loan can result in losing your collateral.

ALSO READ: How does a pre-approved loan influence your CIBIL score? MintGenie explains 

Co-signer helps: If you have a family member or friend with a good credit history, you could ask them to co-sign the loan. Their good credit score may help offset your poor score, increasing your chances of approval. Just remember that if you default, the co-signer is also responsible for repaying the loan.

Online lenders: If traditional banks or financial institutions are unwilling to approve your loan application, consider alternative banks such as online lenders or peer-to-peer lending platforms. These lenders may have more flexible criteria for approval.

Sometimes, giving additional documentation, such as proof of