5 Best Ways to Get a Personal Loan with Low CIBIL Score (2023)

Ways to Get Personal Loan with Bad CIBIL Score

Even though it is a challenge, you can still get a personal loan with a poor credit rating by taking the measures listed below:

1. Show Evidence of Income to Support Loan Repayments

You may have a low credit rating but with a hike in salary or possibly having an additional income source can make the lender more favourable to your loan application. Moreover, if you can show evidence that you have a secure job with a steady income flow, the likelihood of your loan getting approved increases too. Do note that you may be subjected to a higher rate of interest.

2. Consider Applying for a Low Personal Loan Amount

Your lender may perceive you as a high-risk candidate if you ask for a high personal loan amount with a low CIBIL score. From the lender’s point of view, your probability of defaulting on the loan repayment is higher.

If the amount of the personal loan is lower, the lender may be more inclined to grant the loan request. Also, the repayment of a lower amount will be far easier.

3. Apply for a Joint Loan or Get a Guarantor

If you have a low CIBIL score, then getting a co-applicant or guarantor with a good credit rating can help you get the personal loan faster. With permission from your co-applicant or guarantor, ensure that the KYC formalities are completed along with the necessary signatures on the relevant forms.

When the lender sees a co-applicant or guarantor with a good CIBIL score on your loan application, it definitely helps towards getting a better deal.

4. Resolve Errors in Your Credit Report

You may be having a hard time getting a personal loan on a low CIBIL score. However, it is possible that there may be misreporting or errors on your credit report. In most cases, this happens because your record hasn’t been updated with the latest information.

Must Read: How to Calculate Personal Loan EMI

While it is not really your fault, mistakes such as these can cause unwanted issues. To get ahead of the issue, regularly check your CIBIL score. If you find any errors, ensure that you report them to the relevant authorities and resolve them quickly. Ultimately, it will also work favourably by raising your credit score making you a worthier candidate for a personal loan.

5. Request Your Lender to Consider Your Case with an NA or NH in Your Credit Report

An inactive credit period in the last 36 months or absence of a credit period during the same period of time is marked by an NA or NH on your credit report. This translates into you not having a credit score at all in your CIBIL report.

Speak to your prospective lender and explain why there is a period of credit inactivity. It is possible that the loan will be approved with a higher interest rate.

A lender would consider your credit history before giving you a personal loan. This is why a low CIBIL score could make it difficult to secure one. That said, personal loans for people with low CIBIL scores are available, and you can get one by following the steps below.

A personal loan can be a tremendous help when you need funds in a pinch. But before such a loan is sanctioned, you will have to go through various checks the lender performs. You can use the personal loan eligibility checker to get an estimate of the personal loan amount you are eligible for.

Among the first checkpoints that your application will have to cross is your credit or CIBIL score. But what is a good CIBIL score? And is a personal loan for people with low CIBIL score not available at all?

While it may not be as easy to get a personal loan with a low CIBIL score, you may succeed in getting one with some effort.

But first, let’s get an understanding of what a CIBIL score is and how it impacts youreligibility for a personal loan.

CIBIL Score and its Importance

Your CIBIL score is an indication of your creditworthiness. The Credit Information Bureau (India) Ltd., also referred to as CIBIL is one of the credit agencies authorized by the Reserve Bank of India (RBI) to calculate this score for an individual.

A valid CIBIL score falls in the range of 300 to 900, with 900 indicating most creditworthiness. The higher your score, higher is the chance that your personal loan application gets approved.

Your CIBIL score depends on your repayment record on your existing debts. Timely payments on all your outstanding debts like your credit cards, loan EMIs, etc. ensures that you have a high score. However, defaulting on loan repayment results in a score reduction. Personal loans for CIBIL defaulters are more likely to be rejected than for someone with a healthy credit history.

Must Read: How to Choose a Personal Loan

A high CIBIL score of 750 or more makes you an ideal candidate for any type of loan. Conversely, a personal loan for a CIBIL score of 550 or less may lead to rejection or a higher interest rate as you may be considered a ‘high-risk’ borrower, depending on the lender’s policy.

The lender will also consider your capacity to repay the loan which is determined by not just your credit score, but also other factors like bank balance, and job security.

Personal Loan for CIBIL Score of 550

Getting a personal loan for CIBIL score of 550 is quite challenging, but not impossible. The rate of loan application rejection is higher, but if you have a stable income source and working with a reputed employer that offers job security, the lender might consider advancing you a loan at a higher interest rate.Please note that different lenders have different policies regarding this. At SMFG India Credit, the minimum CIBIL score for a personal loan is 750.

If you have defaulted on a loan in the past and cannot provide a justifiable reason for that, or the loan amount is higher, the lender can reject your personal loan application.If you have a score of 550 and need a personal loan, it is advisable to try to improve your CIBIL score to 750 first, before trying to apply with multiple institutions. Alternatively, you can ask a close family member with a good CIBIL score and stable income to be the primary applicant.

Can I Get a Personal Loan without a CIBIL Score?

Getting a personal loan without a CIBIL score is not possible. As personal loans are unsecured forms of a loan, it is difficult for a lender to determine the risks associated with lending to a borrower with no credit score.

You either have the option to start creating your credit history, which is again a long due process, or you can consider the following options. Please note that even these options will be challenging since most lenders insist on a good credit score before accepting a loan application.

Collateral Loan: You can opt for a loan by pledging your assets like saving certificates, gold, shares, and other valuables. It will also help you to start your credit journey and generate a credit report.

Peer-to-Peer Lending: If you’re looking for a smaller amount, the P2P lending is ideal for you, but it usually comes with a high rate of interest.

Using your Parent’s or Spouse’s Credit Score: If your parents or spouse have a good credit score, then you can raise a personal loan by adding your name to the personal loan application as a joint loan holder.

Get a Credit Card: If you are salaried and have a bank account, you can approach your banker for a credit card. However, if you are not eligible for one, you can consider getting an overdraft facility using a fixed deposit as collateral. Alternatively, you can apply for a joint credit card with a family member who is eligible for one. Timely payments of credit card dues and responsible usage will help in building towards a good credit score.

Using the above options, you can get a personal loan without CIBIL and meet the urgent requirement of funds, but it adds to complexities and a tiresome process.

The most ideal way is to first create a credit profile or improve your CIBIL score, before applying for a new personal loan.

Eligibility for a Personal Loan with a Low CIBIL Score

Your CIBIL score is a significant part of personal loan eligibility. That said, other factors also play a key role in your loan application being approved.

  • Use a personal loan eligibility checker to get an assessment of the loan amount you can avail, and the EMIs that you can expect to pay.
  • Check your CIBIL score. This can be easily done online. A medium to good score increases the chances of a personal loan being sanctioned. With a low score, you may still be eligible to get a loan but at a significantly higher interest rate.

Your best bet of getting a personal loan for a low CIBIL score is to try with the NBFCs, because they have more flexible eligibility criteria when compared to banks. If you have defaulted on a loan in the past for genuine reasons, be sure to explain that to the lender. As long as the reason is justifiable – for example a medical emergency– lenders may consider offering you the personal loan at a lower interest rate.

Key Takeaways

While these measures can certainly help you get you the personal loan even with a bad credit score, you still need adequate funds to repay it on time. If you default on the loan, your CIBIL score will plummet further down.

Alternatively, if you are having trouble getting a personal loan, you can also consider a loan against property.

Apply for Personal Loan Check Your Eligibility


5 Best Ways to Get a Personal Loan with Low CIBIL Score? ›

If your CIBIL score is low, a majority of lenders may hesitate to approve your loan application. If they do so, they're likely to charge you a higher interest rate compared to those with a higher CIBIL score. Instead of applying for a loan with a low credit score, try to improve your CIBIL before applying.

Can I get personal loan if my CIBIL score is low? ›

If your CIBIL score is low, a majority of lenders may hesitate to approve your loan application. If they do so, they're likely to charge you a higher interest rate compared to those with a higher CIBIL score. Instead of applying for a loan with a low credit score, try to improve your CIBIL before applying.

What is the lowest CIBIL score for a loan? ›

Minimum CIBIL score for a personal loan

Typically, the higher your CIBIL score, the better. However, the minimum CIBIL score for quick unsecured personal loan approval is 750. It indicates that you have experience managing credit responsibly and will make payments on time.

Which loan app is for poor CIBIL? ›

Instant Loan App Without CIBIL
Loan App NameRate of InterestLoan Amount
MoneyView1.33% per month onwardsRs. 5,000 to Rs. 5 Lakhs
MoneyTap1.08% per month onwardsRs. 3,000 to Rs. 5 Lakhs
Loanbaba0.1% per day onwardsRs. 5,000 to Rs. 2 Lakhs
Prefr18% to 36% p.a.Rs. 10,000 to Rs. 3,00,000
9 more rows
3 days ago

Can I get a loan with a 400 credit score? ›

Key Things to Know About a 400 Credit Score

The terms of any loan options will not be attractive. For example, you could borrow a small amount with certain unsecured credit cards or a personal loan with no credit check, but the interest rates and fees will be high.

Can I get a loan with 500 credit score? ›

Lenders may accept borrowers with a 500 credit score but expect you to meet additional criteria, such as a minimum income or employment history. Look into fees and interest rates. Ask about fees and interest rates you might pay if you get a loan.

Can I get a personal loan with a 540 credit score? ›

While it's possible to get a personal loan with credit score of 540, it's not always easy. Borrowers in this range may have to work a little harder to find a lender willing to work with them.

How to get instant loan 50,000 with low CIBIL score? ›

Apply With a Co-Applicant

If you have a low or no CIBIL Scorе, you can add a co-applicant to your online business loan application with a good credit history and incomе. A co-applicant is somеonе who sharеs thе rеsponsibility of rеpaying thе NBFC loan with you, such as your spousе, partner, sibling, or friеnd.

Which banks report credit limit to CIBIL? ›

HDFC will start reporting Total Credit Limit from May, 2023

P.s. - Previously, HDFC was not reporting total credit limit to Credit Bureau. Due to this, usage calculation was high which wasn't true & lt led down the user's credit score. This is really a relief to... yes cibil and crif updated with limit.

Can I get a loan with 520 credit score? ›

A 520 credit score personal loan can be a great way to get the money you need when you have bad credit. There are many lenders who are willing to work with people who have bad credit, and they can offer you very competitive rates.

How to get a loan with the worst credit score? ›

You could consider a loan with higher risk

Guarantor loans – where someone (usually a relative) promises to make your repayments if you can't. Finding a guarantor with a good credit history can help you get a loan with better rates or a higher limit.

What is the solution of low CIBIL score? ›

Avoid taking on too much debt at one time

The number of loans you take in a fixed period of time should be minimal. Repay one loan and then take another to keep your credit score from crashing. If you take multiple loans at once, it will show that you are in an unforgiving cycle where you have insufficient funds.

Can we hack CIBIL score? ›

There is no alternative to correct approach. Therefore, you cannot repair credit score overnight in a rightful manner.

What is the easiest loan to get approved for? ›

The easiest types of loans to get approved for don't require a credit check and include payday loans, car title loans and pawnshop loans — but they're also highly predatory in nature due to outrageously high interest rates and fees.

What credit score do I need for a $5000 loan? ›

Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.

How big of a loan can I get with a 550 credit score? ›

Some lenders like Avant can fund loans for up to $35,000 for borrowers with a minimum credit score of 550. You might also be able to qualify for a car loan or credit card. It depends on what you need the money for and how much you need. Different lenders have different criteria.

What is the acceptable CIBIL score range for personal loan? ›

CIBIL score range

A CIBIL score of 750 or above in your credit report is ideal. It will aid in qualifying you for personal loans and credit cards. However, if your CIBIL score is below 685, you will find it harder to borrow funds from banks and NBFCs.

What is the CIBIL score for personal loan? ›

What is the minimum Credit score required for availing a personal loan? The minimum credit score depends on the lender from whom you avail of the loan. Usually, for a personal loan credit score of 750 and above while some lenders do offer loans at a score of 650 too.

What is the minimum CIBIL score for SBI personal loan? ›

The minimum CIBIL Score for SBI Personal Loan is 750. The loan approval will be quick for candidates with a CIBIL Score of 750 and above with an advantage of lower interest rates and higher loan amounts.


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