Q1. What is considered a cheap credit score?
Ans. A score which is less than 650 is considered a bad cibil score.
Q2. What is the approximate cibil score for Financial institutions to consider loan application?
Ans. Usually, Financial institutions reject an individual’s application for unsecured loan if the cibil score is below 750 and secured loan if the score is below 650.
Q3. What options does individual with cheap credit score whose economic conditions have improved significantly get to avail loans?
Ans. An individual can avail loan from alternative lending platforms who have more sophisticated models for credit evaluation or one may approach private lenders as well.
Q4. What are disadvantages of availing loan from a private money lender?
Ans. For secured loans private money lenders insist on transferring the ownership of the collateral/asset in their name. E.g for loan against property, private money lender may require the borrower to sign for title transfer in his name. For extending unsecured loans private money lenders charge a very high rate of interest, starting from 3% monthy or 36% per annum.
Q5. Can the individual with cheap credit score get a loan from peer to peer lending?
Ans. Yes, peer to peer lending is one of the best options to get loan with low cibil scores. These platforms do a proper credit assessment and do not charge usurious rates as other private money lenders.
Q6. Do peer to peer platforms also extend secured loans ?
Ans. Yes, while most peer to peer platforms extend unsecured loans for up to 24 months, at LoanKuber borrowers can also obtain secured loans for a much longer tenor.