By Poonam Behura
CNBC-TV18.com
Published on Jan 30, 2025
Your credit score plays a very important role in whether your loan application will be approved or not.
If your credit score is low, then lenders shy away from giving loans. A score less than 600 is considered a bad or weak score, while a score of 750 and above is considered good.
However, even with a bad credit score, you can still stand a chance to get a loan.
1. Before applying for a loan, make sure to check your credit score. This will help you understand your financial condition better.
2. You can contact many lenders, including those that give loans even to people with bad credit history, but they may charge you higher interest rates to reduce their risk.
3. If your credit score is low, then secured personal loan can be an option, where you pledge assets like vehicle, real estate etc as security to the lenders.
3. In this loans, banks do not have the fear of losing their money and easily give loans. But keep in mind that if you are unable to repay the loan, you may lose the mortgaged property.
4. Adding a co-applicant or guarantor with a good credit score can greatly increase your chances of getting a loan approved.
4. If you fail to repay the loan, in such a situation the guarantor or co-applicant has to take the responsibility of repaying the outstanding loan amount.
5. Although it takes time, improving your credit score is one of the best ways to get a loan on better terms in the future. This can be done through timely payments and reducing loans.
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