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5 Ways to Avail a Used Car Loan Even With Bad CIBIL Score

· used car loan

You may plan to purchase a second-hand car by availing a loan for used cars. However, a loan application may not be approved if you hold a low CIBIL score. In that case, you need to look for alternative ways to avail such a loan for the purchase of your used vehicle.

As for used car loans, they are primarily unsecured loans due to which the CIBIL score is considered essential for determining the eligibility. The minimum score in this regard is 750. Hence, it is likely that an applicant will not be able to avail such a personal loan with a low CIBIL.

Now, take a look at different ways by which a borrower can get the loan approved even with a low CIBIL score.

1.Joint loan – You apply jointly along with a co-signer who can be your spouse or any other relative with a strong CIBIL score. Make sure to use an online loan EMI calculator for estimating monthly instalments before applying.

2. Other sources for loan - Other creditors such as NBFCs have less rigid loan eligibility criteria as against conventional financiers. They offer used car loans along with features like Flexi Loan facility, online account access, etc. It would allow an applicant to secure a personal loan with a low CIBIL score.

3. Submit collateral - As used car loans are unsecured advances that require high creditworthiness of the borrower, you can offer collateral to back up your application. You can avail these loans by providing collaterals like fixed deposits, land or gold.

4. Apply for a small loan amount – If holding a low CIBIL score, you can improve your chances of loan approval by applying for a smaller loan amount than required. It can be a suitable option to avail a loan for a used car. Also, make sure to check the used car loan interest rates before applying for loan.

5. Providing guarantor – Aloan application supported by a guarantor can also help in getting the loan approved.

While these were the ways you can avail used car loan, you can improve your credit rating in the long run by paying your dues well within time, and not using your credit limit in its entirety among other options for CIBIL score improvement.

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