Obtaining a Personal Loan without credit history is tough, but not impossible. After all, there are plenty of valid reasons for not having a credit report, such as:
- Age- Usually the need for a loan or credit card arises after a certain age, as during your younger years your expenses are taken care of by your parents. Thus, if you recently finished school, or are in college you may not have needed a loan yet, which is why you don’t have a credit history.
- Family Support- If you come from a well-to-do family then you might have borrowed money from your parents whenever you needed, and didn’t have to turn to a lender for financial aid.
If you don’t have credit history and now you are worried about getting a loan, then maybe you shouldn’t, for there is hope. Most lenders understand that the absence of credit history is possible for valid reasons. However, this doesn’t mean that they will go easy on you. With a blank CIBIL report, you draw a neutral view from the lenders, but if you can nudge them towards the positive side, even if ever so slightly, then you can improve your odds.
Here are 5 tips to get a Personal Loan when you don’t have credit history:
Tip #1: Get a Credit Card
One of the simplest ways of creating credit history is getting a credit card. If you are employed then it is especially easy to get one. However, one particular thing that you should be careful about credit cards is credit utilization. You should not exceed 30% of the credit provided to you on the card, for this will have a negative effect on your score.
By using your credit card for a few months responsibly, and paying the bills in full, you should be able to create a promising credit history that will make it easier to obtain a Personal Loan of your choice.
Tip #2: Become a Co-Applicant
If someone who has a good CIBIL score is willing to become a co-applicant for the Personal Loan, then it could make up for your absence of credit history. However, you have to be cautious in such situations. When you become a co-applicant with someone then you share the responsibility of the loan with them. This means that you and your co-applicant are equally responsible for the repayment of the loan. So, in case they are unable to pay EMIs in future and default then apart from their CIBIL score yours will be affected as well.
Tip #3: Offer Collateral
Most Personal Loans are unsecured, or in other words – not backed by collateral. However, since in your situation the lender has the upper hand you can choose to offer collateral, such as your house, or perhaps your car to make your loan application stronger. After all, most lending institutions operate on taking chances, and when you request for a loan with a blank CIBIL report then there is a lot of risk on their side. You can thus balance the equation by offering collateral.
Tip #4: The Three Cs
Banks/NBFC typically focus on three Cs when weighing loan applications – Credit, Collateral, and Character. Even if the first C, the Credit is absent, they are still willing to sanction a loan if the remaining Cs of borrower are above average.
If you have a stable job and a decent income that is enough to support the EMIs you will have to pay for the Personal Loan, then you are in good position as far as your request for the loan is concerned. It also helps if you have your own house. All these elements help in making the lender feel confident about you, for most borrowers who come from strong financial backgrounds repay their loans responsibly without fail.
Tip #5: Apply For an Online Loan
An online loan is perhaps the best solution when you want a Personal Loan with no credit history. This is because most online loan providers are more lenient than traditional lenders. As long as you have a steady and sufficiently high income, you stand a good chance of securing a Personal Loan. Plus, online loans are also more convenient and flexible than traditional loans. You can easily check your eligibility for an Online Personal Loan offered by LoanTap by filling out this form. It is free, and takes less than a minute.
Why Choose LoanTap For a Personal Loan?
A lot of people who don’t have credit history struggle when they need a Personal Loan. LoanTap’s online Personal Loan is the perfect solution for this problem. Here are some of the advantages that you can enjoy with this one-of-a-kind option:
- Apply for the loan from anywhere, using your phone, desktop, or laptop.
- If your application is accepted by LoanTap’s partner banks/NBFCs then you can typically receive the funds within 24 hours.
- The loan offers a greater level of flexibility by allowing you to set your own loan tenure period and the timing of principal payments.
- Get a loan from the comfort of your home. Even the documents that you have to provide are collected by a representative sent by LoanTap’s if your application is approved.
Many people become hopeless when they come to know about the importance of credit history. Out of desperation they make serious mistakes, such as becoming co-applicant with someone they don’t even trust. Things like these can easily make the situation even worse. Besides, there are options, some of which are mentioned above. However, if you are in a hurry, then you can always choose an online loan. It is the most simple and flexible option that you can get.
LoanTap has become a pioneer in providing online loans in India, and more and more people are already being benefited by their advantages. If you too are interested, visit LoanTap or shoot an email at firstname.lastname@example.org