What is an NBFC Loan without CIBIL Score

NBFC (Non-Banking Financial Company) is an RBI-regulated company that provides a wide range of credit products including personal loans, home loans, etc. While NBFCs cater to a broad set of borrowers, they are particularly helpful for individuals who face challenges in getting approvals through traditional banks. This makes NBFC Loans an ideal choice for individuals with low credit score or no credit history. However, this convenience usually come at a higher interest rates. Hence, it is important for consumers to weigh the benefit of accessibility with the added costs.

NBFC (Non-Banking Financial Company) is an RBI-regulated company that provides a wide range of credit products including personal loans, home...Read more

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Who can Benefit from NBFC Loans?

Individuals with no credit history or first-time borrowers
Individuals with low credit scores
Self-employed individuals with irregular income
Young professionals who have never taken a loan
Defaulters who are seeking urgent financial assistance
It is to be noted that NBFCs might treat first-time borrowers more favorably than individuals carrying defaults because the former carry no negative history.

How do NBFCs Evaluate You Without a CIBIL Score

NBFCs might not rely much on your CIBIL Score to provide credit. However, they evaluate you on below-mentioned things:

Assessment of Bank Statement: This is the most critical evaluation because lenders look at 3-6 months of bank statements to assess your monthly cash flow, regular income and existing EMIs

Employment Stability: A stable employment with an employer and a consistent income improves approval odds

Aadhaar and PAN Verification: Used for identity verification and credit report, even if your credit score is low
UPI and Digital Transaction History: Regular digital spenders are seen as low risk

Ways to Get an NBFC Loan with Low or No CIBIL Score

If you are looking to apply for a loan with an NBFC, you can consider below-mentioned ways, which might help your chances of getting your application processed faster:

Apply for a small loan amount: Small loan amounts might increase your chances of getting a loan faster than bigger amount because NBFCs perceive small applications as lower risk. Upon making timely payments, your CIBIL Score improves, opening doors to bigger loan amounts

Strong Income Proof: Lenders want a strong income proof, such as last 3 months of salary slips, 6 months of bank statements, ITR filings, or GST returns so that it can be compensated for poor or low credit score

Apply with a co-applicant or guarantor: Adding a co-applicant having a good credit score can substantially increase your chances of approval because their creditworthiness becomes a shared guarantee

Opt for a secured or collateral-backed loan: For instant disbursal of your loan application, you should go for a collateral-backed loan because these loans carry low risk for the lender and the chances of approval might be higher in such cases
Take advantage of NH or NA status on your report: You can take advantage of NH (No History) and NA (Not Applicable) on your report because NH means zero history. Many lenders consider this over applications with a history of defaults

Eligibility Criteria to Apply for NBFC Personal Loan without CIBIL Score

Nationality: Indian citizen

Age: 21 - 70 years

Employment Type: Salaried or self-employed

Minimum Monthly Income: Rs. 15,000

KYC - Valid Aadhaar and PAN Card linked to mobile number

Documents Required for NBFC Loan without CIBIL Score

While you apply for a loan with NBFC, they usually require only digital/soft copies:

Identity proof: Aadhaar card (mandatory), PAN card

Address proof: Aadhaar card, utility bill or rental agreement

Income proof: Last 6 month’s bank statement or 3 month’s salary slip

Photograph: Live selfie via app-based KYC

Most NBFCs complete their entire documentation process within their mobile application.

Pros and Cons of NBFC Loans with CIBIL Score

Pros

Easily accessible for first time borrowers and individuals with low credit score
Instant approval because of digital process (often within minutes)
Complete paperless process
Chance of improving CIBIL Score by making timely repayment
Pre-approved offers for existing NBFC customers

Cons

Interest rates are very high as compared to banks
Lower loan amounts are provided initially
Repayment tenure is shorter which leads to higher EMIs
Predatory lender risk if not RBI verified
Processing fee can be 2-4%
Multiple applications in short period can lower the score for future

Bank Vs NBFC Loan: Which is Better for Low CIBIL Score?

Parameter	Personal Loan by Bank	Personal Loan by NBFC
Minimum CIBIL Score Required	700 - 750	No minimum requirement (it might vary)
Processing Time	3 - 7 working days	Within 24 hours
Interest Rates	10 - 18% per annum	10 - 40% per annum
Documentation	Takes time, physical documents often needed	Takes minimal time, digital process
Approval	Rarely approved	Approved with income proof
RBI Regulated	Yes	Yes (Only registered NBFCs)
Best Suited For	Individuals with good credit score	Individuals having low CIBIL, need money urgently and first-timers

How to Apply for NBFC Loan without CIBIL Score

Things to keep in mind before you apply for a loan with an NBFC:

Choose a registered NBFC with RBI
Visit the lender’s website or download the app and create your account using your mobile number linked to Aadhaar
Complete your digital KYC process as asked
Fill in the loan amount, tenure and your income details
Submit your bank statement
Upon verification, you will be sent a loan offer
Review the offer and accept the offer digitally and sign the loan agreement
Loan amount will be disbursed in your account within 24 hours

How to Improve your CIBIL After an NBFC Loan

If your credit score is now and you are looking to build your credit profile, an NBFC loan can help you with it. This can be a credit building opportunity for you:

Pay your EMIs on time - even a missed payment will be reported to credit bureaus and it can hamper your credit score
Enable auto debit so that you never miss payments
Credit utilisation should be kept low if there is a credit alongside the loan
You should not apply for multiple loans simultaneously. Each application will trigger a hard enquiry
Keep checking your credit report adn report inaccuracies if found

If you continue to follow these steps, there are chances that you will be able to improve your credit score and further apply for a higher value loan.

How to Check CIBIL Score for Free with Paisabazaar?

Step 1: Enter your mobile number in the application form

Step 2: Provide your personal details

Step 3: Enter OTP to verify your mobile number

Step 4: Select the credit score purpose and credit score amount

Apply Now

How to Check CIBIL Score for Free with Paisabazaar?

Step 1: Enter your mobile number in the application form

Step 2: Provide your personal details

Step 3: Enter OTP to verify your mobile number

Step 4: Select the credit score purpose and credit score amount

Apply Now

FAQs

What will happen if I default on my NBFC loan?

If you default on your NBFC loan, your credit score will drop drastically. This further will be reported to credit bureaus. NBFCs can also pursue legal recovery and your account.

My CIBIL Score is -1 (NH). Does that mean that I have a bad score?

No, A score of -1 or NH (No History) simple means that you don’t have any credit history yet. You are not a defaulter.

What is the disbursal time of an NBFC loan without CIBIL?

Usually the loan gets approved within minutes. However, in some cases it can take up to 24 hours.

If I take an NBFC loan, will it impact my credit score?

Yes, It’s mandatory for all registered NBFCs to report loan accounts to credit bureaus. Hence, anything that happens on your account will be reported to credit bureaus and impact your credit score.

What is the procedure to get loan urgently without getting CIBIL checked?

You can apply at some NBFC if you are looking for a quick loan disbursement. However, an NBFC will also check your CIBIL before giving you a loan. Any lending entity that provides credit check CIBIL first. However, even if your CIBIL is low, an NBFC will provide you a loan but at a higher interest rate.