To a lot of people, a car signifies freedom, convenience and better life. What happens, however, when your financial background is not clean? In case you have defaulted on loans, have defaulted in EMIs or have a low credit score, the chances are that you may be wondering whether you can access car loan for CIBIL defaulters. The upside? It is, however, strategic, prepared, and lending partner conscious.
In this guide we will take you through how CIBIL scores work, what is so bad about being a defaulter and how to actually apply for a car loan as defaulter in India.
What Does It Mean to Be a CIBIL Defaulter?
These refer to a credit bureau, CIBIL (Credit Information Bureau India Limited) which tracks your loan and credit card history. On this data it provides you with a credit score which ranges between 300 and 900. An excellent score is above 750. But in case you are late with payment or have defaulted on a loan, your score will plunge down.
As a defaulter, one has either defaulted more than once on payment or has failed to pay back his/her loan. This immensely impacts on your creditworthiness. Still, it does not mean that a car loan cannot be obtained by CIBIL defaulters, one simply has to approach it differently.
Is It Possible to Get a Car Loan for CIBIL Defaulters?
Yes, there are quite a number of persons whose credit score is low or not so good and have been able to procure a car loan. Rejection may be the case on part of the traditional banks but there are other options in terms of NBFCs (Non-Banking Financial Companies) and private lenders which are more flexible in terms of lending to high-risk borrowers.
When your interest is to get a car loan for CIBIL defaulters, the following are the avenues you should consider:
1. NBFCs and markets: NBFCs and markets pay more attention to your current income and job rather than only to the history of your credit rating.
2. Used car financing: Less troublesome to process, and lower amounts of money.
3. Loans through guarantor: A guarantor who has a high CIBIL score will increase your chances.
4. High down payment: You can pay a large part of the total cost of the car as a down payment; it increases the likelihood that the lenders will give the rest.
Documentation for Car Loan for CIBIL Defaulters
When you want to take a car loan for CIBIL defaulters, you will find the documentation process more meticulous. Documents typically needed are:
1. PAN card, Aadhaar card
2. Recent bills of utilities or rent contract
3. Previous six months salary slips or bank statements
4. Employment proof
5. Evidence of down payment, or savings.
6. Guarantor papers (in case there were any)
The more financially stable you appear on paper, the better your chances of loan approval.
How to Improve Your Eligibility
Lenders might be wary, but there are still helpful steps you can take to boost odds of success: be clever and act presently. If you’re applying for a car loan for CIBIL defaulters, here are some things that help:
1. Repay Outstanding Dues
Pay off any outstanding loans/EMIs particularly those that are showing in your credit report. After repaying them, ask the lender to update the record with CIBIL upon you paying off and ask them to issue a No Dues Certificate..
2. Rectify Report Errors
There are other times when errors in CIBIL report can unjustly represent you as a defaulter. Ensure that you go through your report well before taking a car loan for CIBIL defaulters.
3. Add a Co-Applicant
The possibility of getting a loan is highly increased when you add a co-applicant with a good score and who is financially stable.
4. Show Stable Income
A consistent source of income, notably with a well established firm, will help counter the risks your low CIBIL score brings. This plays a major role in the process of taking a car loan for CIBIL defaulters.
5. Opt for Used Cars
The price of used cars is cheap hence diminishing the loan and repayments terms. This facilitates the easy approval of car loan for CIBIL defaulters by the lenders.
Why Interest Rates May Be Higher
The lenders view CIBIL defaulters as a risky borrower. Therefore a car loan for CIBIL defaulters is usually accompanied by:
1. Higher interest rates (12%–18% )
2. Limited repayment flexibility
3. Requirement for collateral or guarantor
4. Smaller loan amounts
You might pay a higher interest over time but on time payments on such loans will help you rebuild your credit profile in the future.
Where Glaring Finance Comes In
Traditional lenders often look only at your credit report.However, at Glaring Finance we look at the bigger picture. We realize that being financially weak is part of what it means to be human and that does not make one undeserving of a second chance.
Offering service to car loan for CIBIL defaulters is a specialty of Glaring Finance which provides automobile loan, a network of loan providers such as private lenders, non-banking finance organizations and semi-formal bodies. So the process is eased that way:
1. Immediate clearances- most customers are conditionally accepted within an hour.
2. Low paperwork requirements-even when your credit score is not so good.
3. Customizable EMI options so that it can suit the current level of income.
4. New and used car financing.
5. Helping you to help your credit behavior in the long term.
Our services have restored financial confidence to thousands of applicants to earn a living anywhere in India. Thus, when it comes to the need to find a car loan for CIBIL defaulters, Glaring Finance can be the intelligent thing to do.
Real Customer Story
Neha is a 32 yrs old marketing executive of Noida who had earlier defaulted on education loan five years ago.Her CIBIL score declined to 615 and she applied to two national banks where her car loan was rejected. Disappointed, she reached out to Glaring Finance.
We reviewed her income, employment, and down payment capability. In 48 hours, she was successfully matched to an NBFC that accepted her application for a 4.2 lakh used car loan. Today, Neha drives to work in her own vehicle—and is slowly rebuilding her credit score.
This is the power of working with a lender who understands the true picture behind a credit score.
Common Myths Busted
Myth: CIBIL defaulters can never get a car loan
Truth: YES, CIBIL Defaulter can get car loan if they qualify other parameters such as possessing stable income, down payment or offering a guarantor.
Myth: Only new cars are financed
Truth: Used car loans are actually easier to obtain for defaulters, due to lower ticket sizes.
Myth: You must wait for 7 years to be eligible
Truth: Defaults stay on record for 7 years, but you can still get approved earlier with alternative lenders.
Conclusion
Having a bad credit history is a frustration but that does not imply that your vision of owning an automobile is no more. You may have defaulted on a loan, or EMIs or just have a poor credit score, but there is still a way to go about it. Car loan for CIBIL defaulters can be received, however, you merely need to understand where to apply and how to be ready.
And remember, platforms like Glaring Finance are here to help. There is no financial history that we think should dictate your future. And when you feel you want to steer the wheel, we would be willing to assist you to fire the engine.