Last Updated on March 10, 2024 by admin
It’s easy to plan your monthly budget, investments, retirement funds, etc., but life can throw a curveball at you out of the blue. We find ourselves in situations where we have to take out emergency loans or urgent loan with bad credit in India. We can all relate to the numerous circumstances where we need personal loan without CIBIL when faced with an emergency in our lives. A personal loan is the most common way to acquire quick cash in an unexpected circumstance.
How do bad credit loans work?
A bad credit loan is a type of loan that is specifically designed for people with no credit or a poor credit rating. Before sanctioning a loan to an individual, lenders typically consider the individual’s credit score and credit history. Individuals with higher credit scores are less likely to default on their loan payments. As a result, the lender is at a lower risk. Individuals with low or no credit ratings are more likely to default on their loan payments than those with good credit scores. Consequently, lenders don’t approve urgent loan with bad credit in India.
Below are four easy ways to avail of an urgent loan with bad credit in India
Cash advances by credit card
Many borrowers are unaware that credit cards offer urgent loan with bad credit in India in an emergency. Using a credit card cash advance, you will be able to withdraw cash from an ATM. You can withdraw cash from your local ATM with your credit card, just like you would do with your debit card. Depending on your card’s type and limit, you can get a different cash limit. One of the main advantages of a credit card cash advance is instantaneous approval. You can instantly use this feature with your card if your card comes with it, and you won’t need to ask your cardholder for approval.
Pay-day loans
The payday urgent loan with bad credit in India is a simple, easy-to-obtain, unsecured loan that can be handy in financial distress. It is simple for borrowers to apply for a payday loan online through one of the many digital lenders who offer urgent loan with bad credit in India. As the name suggests, the borrower is usually required to pay back the entire loan amount on their next payday. The payday loan is extremely beneficial for employed professionals that earn a monthly salary but have poor credit scores but need emergency cash in a hurry. You can take out an emergency loan to meet your household expenses, pay your regular bills, or cover other emergency needs. The borrower has to submit a post-dated check for the borrowed sum plus interest when applying for the loan. In exchange, the lender needs this check as security.
Home Equity Loan
These loans are considered secured loans, where your home is used as collateral to secure the loan. Hose equity loans are unsecured loans that are secured by your home. You have to repay both principal and interest when taking out a home equity loan as with a home loan. Since home equity loans are secured, they are easy to qualify for, and most lenders do not look at the borrower’s credit history to determine eligibility.
Loans against an insurance policy
A secured loan can help consumers with bad credit during an emergency. Instead of pledging your home as collateral, you must pledge certain insurance policies as collateral, such as traditional endowment plans, money back plans, etc. A life insurance policy with a surrender value is acceptable to most banks. Banks are generally willing to sanction amounts between 85% and 90% of the policy’s surrender value.
Summary
Even though it’s possible to apply for urgent loan with bad credit in India, most of these personal loan without CIBIL have very high-interest rates and especially if you have a history of overdue charges further compounding your financial problem. The wiser choice here would be to build a small emergency fund to tide you over during times of need. Additionally, make sure that you review your options and select an affordable and flexible loan that fits your needs.
Read Also: Apply for Personal Loans from Top NBFCs such as Bajaj Finserv
