How to get loans even with a low credit score 

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Last week there were two good news for borrowers. One that banks and NBFCs have started sanctioning bigger home loans (over Rs 1 crore) for as long as 30 years tenure. This is for the first time since the credit crisis. These loans will specifically target the young salaried individuals in the age group of 25-30 who are at the early stages of careers and have high aspirations and as well as earning potentials. 

The second good news was that April onwards, thanks to the new lending base rate calculation formula; banks will be quicker to pass on any rate cuts to borrowers. However, these are good news only if you have a good credit history. Banks would neither lend you high amounts nor will you be able to switch lenders and take advantage of a rate cut if you have a poor credit score. 

So what do you do if you do not have a good credit score and need cash? What's the best deal you can get? What is the maximum amount and tenure the banks will offer you? Is there a way you can benefit from the rate cuts as well? 

Here is how to negotiate the best credit deal in case you have a score below 750. 

The deal 

CIBIL data says 80 per cent of the loans that get approved have a score above 750.However, credit score is not the only parameter which lenders look at for approval and deciding the interest rates through Emi Calculator. The difference in the interest rate paid by someone will vary depending on the product (secured or unsecured loan), size of the credit and the payback tenure. The difference will be bigger in case of unsecured loans than secured loans. "Someone with lower credit score can avail secured loans like a home loan at interest rate ranging anywhere between 11.50 per cent and 18 per cent. The rate may jump a little (between 13 per cent-18 per cent) loan against property. 

Your options 

Typically, non-banking financial Institutions (NBFCs) are more flexible with credit scores and the cut-offs than banks (see box). "NBFCs have disbursed loans for a credit score as low as 360