Get a Personal Loan on Low Credit Score Without a Guarantor

5 September, 2024

Synopsis

• You must show that you have the means to repay the loan through your income and employment proof documents.

• You can also consider applying for the loan jointly with another individual or by pledging securities like Fixed Deposits.
  
  

A financial emergency can crop up anytime. But unlike the past, today, the whole financial ecosystem has moved online, allowing you to apply for Personal Loans and obtain instant funding. In the past, lenders generally insisted that you back your loan application with a guarantor. But today, you can apply for guarantor-free loans, even if your credit score is low. This article explains the different ways in which you can apply for no-guarantor loans, despite a low credit score.

About No-Guarantor and Low Credit Loans for Personal Uses

Generally, when you apply for a Personal Loan, your lender asks you to show your credit score, a 3-digit metric that gives them a glimpse into your credit handling behaviour. If your score is high, and if you can prove that you have a stable income and are suitably employed, lenders do not insist on guarantor-backed applications at all. However, if your score is low, the lender may ask you to provide a guarantor-backed application. If you don’t have either a good credit score, or a guarantor’s backing, you may need to explore alternative methods to get your loan approved.

Can you Get a No-Guarantor Personal Loan Despite a Low Credit Score?

There are several options you can explore to get your no-guarantor Personal Loan, if your credit score is less than 650/900, which is typically the minimum credit score required by most lenders. You can:
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• Apply for a Joint Personal Loan
  If your credit score is low, and if you cannot get a guarantor to back your Personal Loan application, then you can consider applying for the loan with an immediate family member who has a good credit score. If your joint applicant draws a monthly income exceeding ₹25,000, and has a credit score above 750, you should have no trouble obtaining a no-guarantor Personal Loan.
  
  

• Show Proof of a Significantly High Monthly Income
  Another way to get the loan despite the low credit score and lack of guarantor-backing is to show that you earn an excellent monthly income. While the minimum income requirement is only ₹25,000, if you can show that your net monthly earnings exceed this amount significantly, lenders may be willing to overlook your low credit score and may not insist on guarantor backing at all.
  
  

• Show Additional Income Sources (If Applicable)
  You can show that your income sources go beyond the conventional salary. If you have any assets or investments through which you are earning a little extra every month, or if you are making money through a side hustle, you can show your income from these additional sources to prove your repayment capabilities.
  
  

• Provide Collateral to Back Your Application
  In the event that your income is lower than or barely meets the minimum requirement by the lender, you can consider going for a collateral-backed loan application. A good idea is to consider applying for the loan with a bank with which you have an existing relationship and investment products (such as Fixed Deposits). You can pledge the FD as collateral with the bank and obtain the necessary funds.
  
  

Get Instant, Paperless, and Online Xpress Personal Loan From HDFC Bank
 
When you need funds during financial emergencies, you may be inclined to select a reputed lender following fair lending practices. HDFC Bank is one such lender you can rely on to fulfil your funding needs. We provide both, and collateral-backed and unsecured Personal Loans. If you fit our eligibility criteria, you can apply for the loan online within minutes and enjoy rapid disbursement.

*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Personal Loan at the sole discretion of HDFC Bank Limited. Loan disbursal is subject to documentation and verification as per Bank’s requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.