In today’s lending landscape, the overreliance on your credit score in terms of securing a loan, however minimal in purpose or value, cannot be understated. With credit score being the paramount metric to estimate someone’s creditworthiness, consumers with a below-requisite score are often hard done by. Though credit score isn’t innately a flawed metric, its major fallacy is encapsulated within the fact that it fails to assess personal circumstances that may have led to delayed repayments. But with the ideological progression of lending institutions, there has been an emergence of apps providing personal loans without considering your credit score. These apps assess your repayment capabilities holistically, based on past spending behaviour, income stability and repayment history. These apps have broadened pre-existing levels of financial inclusivity and have proven to be a big revelation to those requiring urgent financial assistance but have a below-par CIBIL score.
What is a CIBIL Score and Why Does It Matter?
CIBIL score, simply put, is a numeric estimation of an individual’s debt-repaying capabilities. It is estimated based on the person’s past credit behaviour and is usually the most important metric examined by lenders to gauge your creditworthiness. CIBIL score is issued by Transunion and is nationally accepted by financial institutions. People generally have a low CIBIL score due to incessant delays in repayment obligations, irregularities in income levels and a high number of defaults. Banks feed all this transactional information to the CIBIL who use it to then estimate your credit score.
Overview of Personal Loan Apps Without CIBIL Score
There are now many Fintech apps that facilitate the process of providing loans without CIBIL score, with PayMe being at the forefront. These apps optimize the ease of accessibility to personal loans with instantaneous approval. These apps also digitise the entire process, eliminating the struggles of dealing with bulky paperwork. With PayMe being at the helm of this Fintech ingenuity, the entire landscape of loans and debts will be changed for the better.
Top Personal Loan Apps Without CIBIL Score:
Mentioned below are some of the apps which provide personal loans exclusive of your CIBIL score:
- EarlySalary
- FlexSalary
- Nira
- SmartCoin
- MoneyTap
FlexSalary:
FlexSalary is an instant loan app specialising in the dealing of loans to consumers with a below-par CIBIL score. The disbursal of funds is seamless and instantaneous, with the whole process being completed in under 30 minutes.
This application has zero pre-payment penalty and zero charges for a bounced check. It has an interest rate ranging from 18%-54% with a tenure ranging from 10 months to 36 months (about 3 years). With an average user rating of 3.6 stars, FlexSalary, at a glance, appears to be a reliable option for personal loans, though personal discretion is always advised.
Nira:
Nira Finance has a wingspan of over 5000 locations and prides itself in granting loans with interest being as low as 2% and tenure ranging as long as 12 months. Like FlexSalary, it also deposits funds in less than 24 hours post-approval, thereby providing a seamless user experience. With a user rating of 4.2 stars averaged from over 292K reviews, it serves as a go-to for many loan-seekers.
Olyv (formerly SmartCoin):
Olyv is an indigenously developed application which provides personal loans, individualized solutions to improve your credit health and pathways to boost your savings on gold stocks. With a diverse user base of over 2 crore users spread over 19000 pin codes, Olyv seems to have a favourable public verdict. Olyv also doesn’t take any collateral and has a starting interest rate of 1.5% per month. With a user rating of 4.6 stars estimated from over 317K reviews, Olyv has proven to be a reliable option for consumers.
Money trap:
Moneytrap is also one of the famous apps for the personal loan. It provides a unique product line of credit, ranging from ₹35,000 to ₹5 lakhs. The key features are that it does not require any collateral for its loans, Flexible EMIs are there, does not need the CIBIL score or Credit history. MoneyTap, interest is only charged on the amount you withdraw from your credit line.
EarlySalary:
Earlysalary is a popular digital lending platform that provides you instant loans and advances salary to the salaried person. It helps in short-term financial needs. You can get the loan from Earlysalary ranging from 8,000 to ₹5 lakhs, depending on your eligibility. Loan interest rates depend on the loan amount, tenure, and borrower profile. The starting interest rate is 18% and goes beyond that.
Eligibility Criteria and Required Documents:
The eligibility criteria to apply for loans without a solid CIBIL score are rather elementary. Some of the requirements are mentioned below:
- Indian citizenship is mandatory.
- Applicant must be at least 21 years of age
- Applicants must have a stable source of income, with a minimum threshold of 15000 rupees.
- If your loan is a secured one, you must possess something which can be duly considered as collateral.
- Must have work experience of a minimum of 6 months for a salaried position and a minimum of 2 years in case of self-employment.
The list of documents required for applying for these loans is generic.
You will be required to furnish your bank statements for the last three months, proof of residence and a copy of your passport-size photograph. The requisition of any extraneous documents will be clearly mentioned on the application website.
How to Apply for a Personal Loan Without a CIBIL Score:
- Install any one of the apps that provide loans without a CIBIL score.
- Enter registration details as prompted
- Complete your KYC via your PAN and Aadhar details
- Link your bank account with the application
- Loan offers will then be curated by the company concerning your banking history.
- Select an offer which suits you the most
- Carefully read the terms and conditions and then wait for approval.
There are a couple of concrete steps you can follow to elevate your CIBIL score. At the forefront would be to regularly screen your credit reports (issued periodically) for any irregularities or glaring errors. These errors may include false accounts linked with your name, closed or inactive accounts still being considered and/or bogus transactions or credit associated with your account.
Additionally, you need to be punctual in your repayment obligations, pay more than the stated minimum at a time and ensure zero defaults. These steps will help boost your CIBIL score and signal your lender to your proclivity towards debt obligations.
NBFC Personal Loans for Low CIBIL Scores:
NBFC, abbreviated for Non-Banking Financial Companies, performs a more holistic evaluation of one’s repayment abilities, making it markedly different from traditional lending institutions, for whom your CIBIL score is paramount.
Companies such as Bajaj FinServ and Aditya Birla Capital can be categorised as NBFCs that provide these aforementioned loans. Though NBFCs do act as lifelines for those with near-mutilated credit scores, they do have a caveat of charging higher interest rates than traditional banks. This is due to the increased risk undertaken by these ventures by lending to those with a low CIBIL score. A summary of interest rates charged by various NBFCs is given below:
- Paysense-1.4%-2.3% pm
- KreditBee-1.02% pm
- Faircent-12-28% pa
- Incred-16-36% pa
- IIFL Finance-12.75%-33.75% pa
Pros and Cons of No CIBIL Score Loans:
To wrap up this narrative, we will quickly summarise the pros and cons of loan applications exclusive of CIBIL score.
As reiterated, NBFC’s application process is streamlined and automated, with near-instantaneous disbursal of funds post-approval. They serve as a great option for seekers requiring urgent financial assistance and want to avoid the cumbersome process of applying to traditional lending authorities. On the flip side, the interest on these loans is usually higher than traditional loans, implying a greater monetary burden on the applicant. Some of these loans may also be secured, i.e. granted against some collateral. This may lead to the loss of valuable assets like cars, gold, land etc in case of failed obligations.
Conclusion:
NBFCs are a great alternative for people with a low CIBIL score. They have instant transmission of funds and save invaluable time. Granted, the higher interest rates and occasional requisition of collateral may be a deal-breaker for some, but they are heavily outweighed by their perquisites.
PayMe, a fintech company registered with the RBI, offers quick and easy online personal loans to both individuals and small businesses across India at competitive interest rates. By bridging the gap between traditional lenders and borrowers who may not meet conventional criteria, PayMe ensures financial accessibility for a wider audience. Its intuitive platform and rapid loan approval process are designed to deliver financial freedom, prompt disbursement, and flexibility to its customers. Dedicated to empowering individuals and businesses, PayMe provides timely funding solutions to help them achieve their objectives. With a focus on customer satisfaction and leveraging innovative technology, PayMe stands out as a leading player in the Indian lending fintech sector.
