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 How to get a Personal Loan when you have a bad credit history

How to get a Personal Loan when you have a bad credit history

Availing a personal loan is merely a click away these days. But, getting the most suitable interest rate offer depends a lot on our personal profile, as well as the availability of the offer. The latter is perhaps not in our hands unlike the former, which is why we should try and keep all the necessary aspects in check before we go ahead with applying for a personal loan. You see, a loan is always based on an immediate need that must be fulfilled, so whenever we apply for a loan, we expect it to be approved. But, what happens when we have a history of card settlements or check bounces?

Well, for starters it is going to be quite difficult to get an approval in the first place and if at all you are able to apply elsewhere (other than banks & nbfcs) the interest rate being charged is going to be sky high as compared to regular loans obtained from banks. As we always say, prevention is better than cure, make sure you as a borrower do not default when you repay. So, what about the rest of us who have defaulted in the eyes of the bank? Yes, help is at hand for sure. If we are willing to make amends with our past, then the whole concept of ‘bad credit history’ could probably be erased.

Whether it is a  credit card or a loan settlement, or a cheque bounce or two it is viewed negatively by the lenders, so if you are looking to rectify your records, then perhaps the only way to do this would be by paying it all back and getting a no due certificate from your lender as proof.

Here are some simple tips to implement if you want to have a clean slate of your credit history:

- Never leave an installment unpaid, or a cheque unprocessed.

- In case there has been some kind of a delay while paying your dues, ensure you pay it as soon as you can (preferably within the stipulated grace time).

- Review your cibil report regularly as it will help you look out for any kind of errors, i.e. in case if anybody else’s information is wrongly mapped to you or if some information is wrongly reported by the banks.

- There are services available that help improve your cibil score by communicating with the bank in question and resolving pending disputes.

Never get carried away with advertisements that claim they offer loans for those with a bad credit history, because most often these aren’t genuine in their claim.

So, remember when you happen to borrow money be it from a bank or even from a friend for that matter, ensure you take up the responsibility of repaying it all back.

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Priya Rai is a loan consultant.