Credit cards can be immensely useful financial products, allowing you to address a range of expenses without disturbing your savings. These cards provide unsecured, pre-approved credit for your usage, whenever the need arises. Nevertheless, since there is no collateral involved with conventional credit cards, one must possess an impressive credit score to avail the same.
While some financial institutions may offer a credit card for low CIBIL score applicants, such cards usually come bearing greater interest charges and offer lower credit limits. Some financers may even offer secured credit cards to such applicants.
How does Your Credit Score Affect Credit Card Applications?
A financial institution offers credit cards to eligible applicants, trusting that they would be able to repay whatever credit they utilise. Since the credit score is a measure of a person’s creditworthiness, NBFCs and banks use it to judge whether someone can service credit card debts effectively.
You can, thus, face difficulty while looking to avail a credit card for low credit score. You may need to improve your scores before availing a card that fits your credit requirements. Alternatively, you can ask your bank regarding secured card offers.
Secured Credit Cards: Are they Worth it?
Secured cards are the perfect credit cards for low CIBIL score applicants. If you possess a fixed deposit account with the bank in question, you can use that deposit as collateral to avail credit cards if your current credit ratings are too poor to avail conventional cards. You can also use secured cards to gradually work towards improving your credit scores.
However, such cards suffer from some drawbacks as well. Here is a look at what these disadvantages entail –
- Minimal credit limit – For secured cards, the credit limit is lesser than the amount deposited in your FD scheme. For example, if your FD is valued at Rs.50000, your secured card may have a sanctioned limit of just Rs.40000.
- Cannot use FD proceeds – While credit is outstanding on your secured loan, you cannot withdraw your fixed deposit or its interest earnings. Therefore, your FD investment must remain undisturbed, even during emergencies, if you choose to spend using a secured card.
These restrictions and more often force applicants to think twice about availing secured credit card for low CIBIL score.
What other options do you have?
Well, you can always avail hassle-free gold loans instead of relying on credit cards!
Why Consider Gold Loans?
Gold loans offer the same facilities as any other loan, minus the complicated application and documentation process. Furthermore, since you are availing funds against gold jewellery, lenders do not conduct checks on your credit history. Therefore, instead of looking for credit cards for low credit score, you can opt for a gold loan to meet your funding requirements.
Rupeek Fintech Pvt. Limited is a trustworthy name when it comes to gold loan solutions. If you choose this lender, you can look forward to the following features and facilities –
- Overdraft facility available through Rupeek Quick
The company offers an overdraft facility to borrowers who pledge their gold ornaments. Named Rupeek Quick, this overdraft system provides a pre-sanctioned amount as loan to you, from which you can withdraw cash as and when you require it. You only need to bear interest on the sums that you use from within this limit.
For instance, if your overdraft amount is Rs.1 Lakh and you avail only Rs.10000 from it, you would only need to pay interest on the latter and not on the whole overdraft sum. In essence, this feature is similar to the workings of a credit card. You only repay the amount you spend and not on the overall credit limit.
- Limited interest charges
Most credit cards are associated with notoriously hefty interest charges, often amounting to more than 45% per year. Fortunately, gold loans from this company are a lot more affordable than credit cards. With monthly interests starting from just 0.49%, you never have to worry about overburdening your finances with these gold loans.
- Security for pledged asset
If you are wondering if your collateral gold items will remain safe with the NBFC for the duration of the loan, don’t fret. The company ensures maximum safety for these items, eliminating the risk of unfortunate events. It also offers insurance coverage for the pledged assets to ensure your peace of mind in due course of the tenure. If any harm befalls your gold pledged, you can recover any losses by claiming this insurance coverage.
- Minimal documentation requirement
While most other loans and credit cards force you to furnish a long list of documents during their application, gold loans are available with almost zero documentation. Avail these loans by providing your KYC document and the receipts for your pledged assets. That’s it!
You do not need to furnish ITR, salary slips or any other financial document to opt for gold loans, especially from this NBFC in question.
Additionally, you can apply for these loans and get approval without leaving the comfort of your home. Rupeek Fintech Pvt. Ltd. follows a special procedure, in which loan managers from the company visit the interested party’s house for the loan application process. These managers evaluate the value of the pledged asset at the location of your home and forward the findings to an internal team.
After confirmation, this team processes the loan request and disburses the principal sum. The loan manager then collects the pledged jewellery and leaves your house once you receive the loan amount in your account, which takes approximately 30 minutes!
Yes, it is just that simple!
Thus, rather than wasting your time looking for the perfect credit card for low credit score, you should devote your time instead to learning more about gold loans. This option should help you avail the necessary funding to meet variegated expenses, without overstraining your financial condition.