Yes, instant loan apps may provide loans even if you have a low CIBIL score, but there are some important considerations:
1. Higher Interest Rates
Borrowers with low credit scores are often seen as higher-risk by lenders. Instant loan apps might approve loans in such cases but charge higher interest rates to offset the risk.
2. Smaller Loan Amounts
Many apps limit the loan amount for individuals with low credit scores, offering only small, short-term loans to reduce their risk exposure.
3. Alternative Criteria
Some loan apps focus less on the CIBIL score and more on other factors, such as:
Your income and its stability.
Employment status or proof of regular income.
Bank statements and spending patterns.
Existing debts and financial commitments.
4. Collateral or Guarantors
Certain apps might ask for additional security, like collateral, or require a guarantor if the credit score is low.
5. Credit-Building Options
Some apps cater specifically to individuals with poor credit scores, offering smaller loans aimed at helping borrowers build or improve their credit history.
Risks and Drawbacks of such loans:
High Costs:
The combination of higher interest rates and short repayment periods can lead to substantial borrowing costs.
Debt Trap Risk:
Borrowing repeatedly from apps with high-interest rates can create a cycle of dependency and increasing debt.
Hidden Fees and Charges:
Always read the terms carefully. Some apps impose hidden fees such as account maintenance or early repayment charges.
Fraudulent Apps:
Many fake loan apps operate in the market. Stick to trusted, RBI-registered NBFC-backed apps.
Some of the Popular Loan Apps for Low CIBIL Scores in India are MoneyTap, CASHe, KreditBee, EarlySalary.
Get in touch with us today at www.Settleloan.in and embark on your path to financial freedom
