Business Loans For Bad Credit and Low CIBIL Score: Explained

Jul 25, 2020

Business Loans For Bad Credit and Low CIBIL Score: Explained

India’s lending sector has been undergoing a rapid change in terms of becoming more accessible of late. Lending practices have steadily eased owing to several factors like the emergence of online loan platforms and the proliferation of non-banking financial companies in the sector.

Owing to these reasons, loans with low CIBIL score are no longer impractical.

Nonetheless, before delving directly into how one can avail business loans with bad credits, it is first crucial to learn about what having a low CIBIL score implies.

CIBIL Score: What does it Mean?

CIBIL or credit score is one of the most important factors that lending institutions consider while evaluating a loan application. This score is essentially a numeric representation of one’s credit history and ranges between 300 and 900.

While the determination of CIBIL score is based on a proprietary algorithm, an individual’s loan repayment behaviour has the primary influence on his/her credit score. The score reflects an individual’s creditworthiness and is based on their repayment and borrowing history, shared by their previous lenders.

Ideally, one should have a credit score of more than 750 to ensure that their loan applications are approved without hassle.

Following are the key factors that can impact a person’s credit score –

  • Payment history

Late payments and defaulting EMIs impact one’s CIBIL score negatively. It is one of the primary factors which can lead to a low credit score.

  • High credit utilisation

Credit utilisation ratio is the amount of credit utilised as a percentage of his/her income. High credit utilisation ratio signifies a growing debt burden and has an adverse effect on your credit score.

  • Credit mix

When an individual has a history of borrowing a mix of both secured and unsecured credits; it shows that he/she is not reliant on only a single type of advance for all of his/her financial requirements. It usually has a positive impact on one’s credit score.

While it was pretty much challenging previously, with new avenues of borrowing becoming more easily accessible, availing a loan without credit check is possible for individuals with bad credits.

How to do so? 

Well, opting for a gold business loan is the most convenient way to avail an advance, despite having a low CIBIL score.

Gold loans: The Most Lucrative Advance to Avail with Bad Credits

While small business loans with bad credit are not the ideal scenario for borrowing, gold business loans have made it possible for entrepreneurs to avail credits without hassle. While gold has always played an active part in lending and borrowing in India, the transactions have become much more organised over the last few years.

With digital lending platforms like Rupeek Fintech Pvt. Ltd. making gold loans accessible, one can easily opt for a secured business loan from them even with bad credits.

These loans are sanctioned without much emphasis on one’s credit score because they are secured against collateral – gold, in this case. Additionally, the quantum of credits disbursed is determined on the value of gold pledged by the borrower. As a result, financial institutions do not conduct a thorough credit check on borrowers before approving the advance.

Benefits of Availing a Gold Loan – 

Apart from being easily available loans with low CIBIL score, gold business loans from Rupeek are also equipped with several features that make them extremely beneficial. Some of them are as follows –

  • High-value loan amount

You can secure a high LTV amount against the gold at attractive interest rates. It is an excellent way to make use of your assets without eroding their equity. Further, since these loans have no end-use restrictions, they can be utilised to fund any financial requirement without hassle.

  • No documentation 

One of the most tedious tasks to undertake while applying for a loan is undergoing the lengthy documentation and verification process. Opt for lenders who assign you a loan manager, who will visit your house for the KYC registration after you apply for a loan. Also, check if the documentation process is minimal and is completed within minutes.

  • Instant disbursal of Loanadvance

After you apply for the loan through the Rupeek app or via a call, the loan manager will visit your house on the scheduled date. After completion of the KYC process and gold valuation, the credits will be disbursed to you within as early as 30 minutes of approval!

Moreover, our loan manager will wait at your house until the loan amount transaction is completed and you have received the money in your bank account.

  • Flexible tenure

You can opt for flexible repayment tenure of up to 6 months for your loan amount. The term can also be stretched for up to 1 year if you renew your loan after the completion of 6 months. This system allows you to repay the amount borrowed as per your convenience.

  • Easy repayment terms

Unlike advances from other financial institutions, with Rupeek you have the option of bullet repayment and with a monthly interest payout, instead of an EMI. This way, you are not saddled with a heavy penalty if you fail to pay the EMI.

  • Improve your credit score

Gold loans with low CIBIL score can, in turn, help to increase your credit score. You can borrow this business loan with bad credit, and make timely payments against it, which is recorded in your credit history. This can help improve your CIBIL score, making way for easy credit borrowing in the future.

With such benefits and more, availing a gold business loan can be extremely lucrative for an individual with bad credits. It is also crucial to remember that the gold pledged as collateral for the advance is locked away securely at a vault of the nearest financial institution, until the time of their release, thus guaranteeing optimal security.

So, don’t let bad credit hold you down! Check the eligibility criteria for a gold loan from Rupeek and apply today!