According to a recent report by the Economic Times, 220 million candidates were reported to be credit eligible in 2017 out of 1.3 billion Indians, which is only 60% of the entire population. The rest, 40%, have supposedly poor credit scores or no credit history, which makes their loan applications less preferable for financial institutions.


Candidates with poor credit scores and histories are considered a potential threat from a lender's perspective; hence, they haven't approved the application quickly. However, poor credit score bearers can avail of a personal loan for emergency purposes. The approval of their credit application, however, depends on several factors, as explained below – 

1) Salary of a loan applicant

Since emergency loans are unsecured, lending institutions approve finances for customers with decent credit scores of 750 and above. However, in several cases, when applicants with poor credit scores approach a financial institution, they may find their loan application approved if their annual income is substantial. This somewhat reassures lenders that you are capable of repaying money, and hence, they may approve loans.

Apart from high annual income, lenders also consider job stability and employer profile as important factors. An employer making delayed payments to its employees can raise questions about your loan application; a reputed employer, stable job, and high income can help an individual get a personal loan even with a poor credit score.

2) Availability of documents

Financial institutions offering emergency personal emergencies validate the candidate's eligibility adherence based on the document provided. Individuals must submit KYC documents, photographs, salary slips, and bank statements for the loan application procedure. These are a few documents generally required by lenders while offering personal loans. However, this requirement may vary from one financial institution to another.

3) Co- applicant's eligibility

Many times, lending corporations find it difficult to approve emergency finances to candidates. Opting for a joint loan can help you get the require  approval. Adding an eligible co-applicant to your personal loan application will solve the purpose and hencease the viability of your a plication. It is advised to add applicants with comparatively decent credit scores or high incomes.

When credit score bearers seek a personal loan, they may find their application rejected or be charged high personal loan interest rates. Adding a valued co-applicant may help them avoid this unwanted situation of paying higher rates of interest or low-sanctioned loan amounts.

To help candidates with the loan procedure, non-banking financial companies like Bajaj Finserv provide pre-approved offers. These offers apply to several financial products, including personal loans, business loans, home loans, and others. You can check your pre-approved offer by submitting the required details, such as name and contact number.

Consequently, these are a few pointers that lenders look at before approving your personal loan a plication. Candidates with poor credit scores can avail emergency loans for required situations, but they must keep these considerations s in mind. Besides, applicants can use a loan calculator to compute the estimated monthly installments for different tenor values and interest rates. Well-informed individuals with thorough knowledge about loans can make financially wise decisions. Besides, they will be able to plan their upcoming financial goals better.

Subsequently, one should always try to improve one's credit score to benefit the most from finances and reduce the incurred cost of a loan. A credit score of 750 and above is considered creditworthy and will help you acquire better offers.