Credit Score

How to Get a Personal Loan with Low CIBIL Score

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17/7/25 7:21 AM  | 6 Minutes
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Your credit score plays a vital role in determining your creditworthiness and loan eligibility, especially when considering a low CIBIL score personal loan. A low credit score makes it significantly challenging for you to acquire a Personal Loan . That being said, you still stand a chance. However, you must be aware of several elements that can influence your ability to get a Personal Loan, benefit from loan terms like low interest rates, and fulfil your financial needs. Keep reading to know more.

Low CIBIL Score

Also read - How Your CIBIL Score Affects Loan Approval

Why is the CIBIL Score Important for Personal Lending?

Your creditworthiness, which heavily relies on your payment history, is assessed using your CIBIL score. Your Personal Loan application has a better probability of approval if you have a higher credit score, i.e. you are considered creditworthy if you have a CIBIL score between 700 and 900. In essence, having a good credit score is the ideal solution for higher Personal Loan approval.

In contrast, someone with a bad credit history is more likely to be denied a loan by traditional lenders than someone with a clean credit record. They may also have to deal with consequences like only getting approvals for smaller loan amounts or higher interest rates. This makes it tougher for them to get quick access to funds that fulfil important financial needs.

Also read - Why Do Lenders Check Your CIBIL Score Before Approving Your Loan?

Can You Get a Personal Loan With a Low CIBIL Score

Yes, it is possible to get a personal loan even if you have a low credit score. However, the process is complex. Most NBFCs and other financial institutions consider a credit score of above 750 as ideal. If your score is below 650, lenders may consider you a risky borrower. But don't worry, some lenders still offer personal loans to low-score borrowers, often with higher interest rates or stricter terms.

How to Get a Personal Loan With a Low CIBIL Score

There are a few ways you can increase your chances of getting unsecured loans despite having a low CIBIL score. In addition, many financial institutions specialise in personal loans for bad credit history. Just ensure you keep the following points in mind:

1. Research Lenders Specialising in Loans For Bad Credit

That’s right, certain banks and NBFCs offer loan services just for individuals with bad CIBIL scores who are in urgent need of money! In these cases, your CIBIL score is not examined with as much scrutiny as certain other criteria that could work in your favour. Check across different lenders’ eligibility criteria, interest rates, and loan disbursal to find the instant loan offer that best meets your needs. Apply at one of these institutions for a better chance of personal loan approval.

2. Borrow a Smaller Sanction

Since your CIBIL score is low and reflects low creditworthiness, lenders are less likely to lend you money. To put it another way, financing someone with a bad credit score is riskier for the lender. However, a reduced sanction can still get you authorised for a loan, i.e., if you have a low credit score, you may receive a smaller loan. Furthermore, by borrowing a modest amount, you have the option to repay it regularly, enhancing your credit score while fulfilling your financial needs.

3. Take a Joint Loan With a Co-applicant

It’s still possible to receive the loan, even with a poor or no credit score, if you have a co-borrower willing to guarantee the loan. To increase your chances of approval, applying with a guarantor with a solid credit rating and stable finances is best. 

As part of the loan approval process, the financial institution evaluates CIBIL ratings and credit profiles for both applicants. Additionally, both applicants share the burden of repayment. As a result, it's best to ask family and friends to either co-apply as a co-applicant or serve as guarantors if your CIBIL score isn't good enough.

4. Provide Income and Employment Verification 

To get an instant Personal Loan, the lender must be convinced that you can repay the loan. So, as part of your loan evaluation, lenders will consider your income stability and employment history. 

Enough money in the bank to cover monthly instalments and a record of your credit utilisation will come in handy. Be sure to also identify any other sources of income you may have, including any regular deposits into your bank account,  if you have a poor CIBIL score. Show a consistent income and stable employment history with salary slips—if the lender is assured of your repayment capacity, you could get easy approvals.

5. Do a Credit Check to Spot Potential Credit Report Errors

It’s possible to get a low credit score because of errors like unclosed credit accounts that aren't recognised as closed, or duplicate accounts. In addition, you should verify your profile to see if there are any unidentified enquiries, which could be a sign of fraud or misuse of your personal information.

Utilise free services to examine your CIBIL report and perform a CIBIL score check. You can verify your CIBIL score using PAN Card details and receive a personalised credit health report within a few minutes. Taking care of these issues via a credit repair process and perhaps even reaching out to customer care is sure to help you improve your credit score and acquire a loan.

6. Contact Your Lender to Evaluate Your Case if You Have NA Or NH

“NA” stands for “Not Applicable”, and “NH” indicates “No History”. Simply put, it means you have little to no credit history. An NA or NH on your credit report indicates an inactive credit term in the last 36 months or the lack of a credit period in the same period. As a result, your CIBIL report will show no credit score at all.

Contact your lender and explain your situation, highlighting your current financial stability and any other relevant factors that demonstrate your ability to repay the loan. If you haven't used your credit card for a while, explain the reasons to them. You could still get an approved loan, although at a higher rate of interest.

Also read - How to Improve Credit Score in India After Default? 

How a Low CIBIL Score Affects Your Eligibility

A low CIBIL score suggests past credit issues such as missed or late payments, loan defaults, or high credit utilisation ratio. This makes lenders hesitant to offer you a loan because:

  • You are seen as a higher repayment risk 
  • You may receive higher interest rates
  • The loan amount offered may be lower
  • You may have to provide additional documents or security

How to Improve CIBIL Score?

While you could get a loan on your CIBIL score, your bigger priority has to be increasing your score to a healthy level.

Your CIBIL score is based on a few different factors:

  • How well you repay your existing debts
  • Your current repayment capacity
  • Your repayment history
  • Credit utilisation and repayments 

Things that help you get a higher score are:

  • Having a stable source of income
  • Showing financial responsibility
  • Keeping the credit utilisation ratio below 30% of the credit limit
  • Having a healthy mix of secured and unsecured credit

Also read - Top 10 Unknown facts about CIBIL Score

Alternatives to Personal Loans With Low Credit Scores

If you are unable to get an unsecured personal loan, consider these alternatives:

  • Gold Loan
  • Loan Against Property
  • Loan Against Fixed Deposit
  • Salary Advance Loan (if your employer allows)
  • Credit Union or Cooperative Society Loan

To Conclude

It is extremely important to understand that there are lots of factors involved when getting a Personal Loan with a low CIBIL score. While having a low CIBIL score makes it more challenging, especially if you do not meet the minimum CIBIL score, there are ways through which you can improve your chances of getting a Personal Loan. That way, no matter if it's for medical expenses, wedding expenses, or other requirements, a Personal Loan will just be a click of an application away.

Frequently Asked Questions

What is the ideal CIBIL score you should have?

A CIBIL score within the range of 700-900 is considered to be good. Having a CIBIL score that falls in this range can help you get a Personal Loan approval faster and with ease.

Can I get a loan with a 500 CIBIL score?

While a 500 CIBIL score is considered low and makes it challenging to secure a loan, it's not entirely impossible. Lenders may be hesitant, but some may still offer loans, potentially with higher interest rates or stricter terms. 

What are the charges for checking the CIBIL score?

You can check your CIBIL score for free online. Some lenders also have online tools on their websites to help you check your CIBIL score before applying. 

How to improve your CIBIL score?

A bad credit score is not the end of the world, and there are many ways through which you can improve your CIBIL score and get a higher score. 

  • Paying EMIs and credit card bills on time positively impacts your CIBIL score.
  • Limiting credit utilisation to below 30% is recommended to maintain a good credit score
  • Keeping old credit accounts active contributes positively to your credit history.
  • Try to avoid applying for multiple loans at once, rectify errors in your credit report if there are any, and have a good credit mix.
  • Regularly monitoring your credit score allows you to rectify discrepancies promptly.

What do credit history and credit report mean in CIBIL?

Your credit history reflects your repayment ability and is a summary of how well you have managed your loans and if you have made all the payments on time. Your credit report consists of data regarding your credit instruments and ongoing loans or repayments.

Can I get a personal loan with a low CIBIL score?

Yes, you can get a low CIBIL score personal loan, but it may be more difficult and come with:

  • Higher interest rates
  • Lower loan amounts
  • Shorter repayment tenure

Can I get a ₹2 lakh loan with a low CIBIL score?

Yes, but you may need to apply through NBFCS or Fintech lenders, provide collateral, or apply with a co-applicant.

Will my loan interest rate be higher?

Yes, a low CIBIL score leads to higher interest rates to compensate for the lender's risk.

What is the minimum CIBIL score required for a Personal Loan?

Most lenders prefer a score of 750 and above, but some may consider applications with scores as low as 600-650.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.

*Terms and Conditions apply
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