Loan will be available even without CIBIL score: Banks changed strategy amid RBI rules, know on which 5 conditions the money is being given

Often there is a belief among the common people that without a CIBIL score of 750 or more, one cannot get even a single rupee loan from the bank. But as per Reserve Bank of India (RBI) guidelines and banking rules, the application of any first-time borrower cannot be rejected outright on the basis of mere lack of credit history.

In the language of credit bureau, such customers ‘New-to-Credit’ (NTC) or in the report ‘NH’ (No History) Or ‘-1’ Is marked as. This doesn’t necessarily mean that your credit score is ‘bad’; It just means that you have never used a formal loan or credit card before. Currently, large commercial banks, small finance banks and non-banking financial companies (NBFCs) are providing loans even to customers without CIBIL score on the basis of alternative data and income stability.

When the lender does not have the means to check your past repayment history, it takes your current financial strength and repayment capacity into consideration:

• 1. Loan Against Fixed Deposit (FD): This is the fastest and most affordable option to get a loan without CIBIL score. If you have an FD in a bank, banks give loan of 85% to 90% of your FD amount without any credit score check. The interest rate on this is also only 1% to 2% more than the interest on your FD.

• 2. Gold Loan: An instant loan can be taken from a bank or NBFC by pledging the gold jewelery or coins kept in the house. Since it is a secured loan, there is no mandatory requirement of CIBIL score and the interest rates are also much lower than unsecured personal loans.

• 3. Old relationship with salary account and bank: The bank where you maintain your salary account or old savings account offers pre-approved or small-ticket personal loan after looking at the inflow, monthly average balance and transaction pattern of your account.

• 4. Adding a co-applicant or guarantor: If you want to take an unsecured loan, make a co-borrower from a family member (parent, spouse or sibling) whose CIBIL score is more than 750. Banks easily approve the loan on the basis of the strong credit profile of the guarantor.

• 5. Alternative Data and Digital Lenders (NBFCs): Many fintech and NBFC companies approve loans ranging from ₹25,000 to ₹2 lakh by algorithmically checking your 6 months of bank statements, payment timing of utility bills (electricity, mobile) and employment stability instead of the traditional CIBIL.

Often people consider ‘No CIBIL’ and ‘Bad CIBIL’ (Bad CIBIL / Low Score) to be the same, whereas there is a huge difference between the two:

When applying without credit history, your income proof proves your creditworthiness:

• Proof of identity and address: Aadhar Card, PAN Card, Passport or Voter ID.

• For salaried applicants: Salary slips of last 3 to 6 months, Form 16 and bank statement of last 6 months (showing salary credit).

• For Self-Employed: Last 1 to 2 years Income Tax Return (ITR), GST Return and 6 months Current/Savings Account Statement.

• Continuity of Employment: Employment ID card or offer letter from the existing company.

Whether you are applying for a loan for the first time from Lucknow, Kanpur, Delhi, Jaipur or Mumbai, there are some basic precautions to take:

• Do not apply to multiple places at once: Applying to 5-6 banks or apps at the same time leads to repeated ‘hard enquiries’, which can spoil your newly built score.

• Avoid unauthorized Chinese/fake loan apps: Contact only RBI registered banks or NBFCs. Apps which claim loan in 2 minutes without any documents can be a means of cyber fraud and blackmailing.

• Take a small loan and repay it on time: Instead of asking for a huge amount in the first go, take a small loan of ₹30,000 to ₹50,000 and repay its EMI on time. Within 6 to 8 months your CIBIL score will automatically cross 750, making it easier to get larger home loans or car loans in the future.