For a loan application approval, you need to have a good credit score say above 750 or at least 700. However, with a score of 550, there would be only few banks interested to provide a loan, if one is willing to give a loan it will be at a very high interest rate. There are many ways to increase CIBIL score. The first measure is to study the credit report, in case it has any errors. Sometimes fixing of errors related to payments can correct your credit score to a higher one.
Not every financial institution would be ready to provide personal loan for CIBIL score of 550. Even if any of the NBFC is prepared to provide loan at this credit score, it would be on a higher interest rate. As understood, it takes some time to increase CIBIL score, and sometimes a person cannot wait for bettering the credit score to avail a loan. In such cases, he/she may have to pay a higher rate of interest.
You can take a loan on floating rate of interest and negotiate with the bank or NBFC later for setting the rate to a lower limit down the line. However, it may or may not be accepted as per the discretion of the financial institution. For secured loans, sometimes a CIBIL score of 550 may be accepted. Yet, the loan would be availed at a higher rate of interest than those with good credit score. However, it may be lower than that charged for personal loan or other unsecured loans.
So, if you are looking for personal loan for CIBIL score of 550, you should make sure you bid for the lowest interest rate by gaining confidence of the financial institute, be it through the expected hike in your income drawn or securing the loan with some other asset.
Your repayment history, mixture of credit, enquiries, utilization of credit, and duration of credit services influence the credit score.
Thus, you must try to maintain a better credit score that is acceptable by banks and NBFCs to get a loan at reasonable interest rates and loan program terms and conditions. It is best to maintain a good credit history so that you do not have to worry about personal loan with CIBIL score 550, because if you are regular at payments and credit history, then you can definitely strengthen your credit score and secure loans as per your own convenience.
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