How to Get a Personal Loan in India Without a Credit History – Complete Guide

An unexpected expense can strike anytime, like a sudden medical bill or an urgent home repair, and you may need ₹1,00,000 immediately. You approach a bank for a personal loan, only to be informed that your lack of credit history makes it challenging to assess your creditworthiness. 

This scenario is common in India, where a portion of the population remains outside the formal credit system. More than 16 crore Indians are considered credit underserved, highlighting the country's potential market for loans and credit cards. 

Despite these challenges, obtaining a personal loan without a credit history is feasible through alternative methods. Lenders may consider factors such as proof of consistent income, collateral, or the presence of a guarantor to evaluate your loan application. 

Understanding these options can help you to access necessary funds even without an established credit record.​

What ‘No Credit History’ Means?

When a person has never taken a loan, used a credit card, or had a past credit record with any lender, credit bureaus have nothing to show. That’s called “no credit history” or “credit invisible”. 

On the other hand, a “bad credit score” means a person has a poor record of loan repayments, such as missed EMIs, overuse of credit cards, or loan defaults.

Here’s a table to show the difference:

Why Lenders Are Cautious with New-to-Credit Borrowers

Lenders prefer borrowers who already have a credit history. When you have past loans or credit card usage, banks can check how well you handled money: did you pay EMIs on time, pay full bills, and so on? 

Without this data, banks feel it’s risky to offer a loan. They can’t predict if you’ll repay on time or not. That’s why many banks either reject such applications or charge high interest.

How it Impacts Your Loan Eligibility

Getting a loan with no credit history is still possible, but you may face some hurdles. Here’s how it may affect your chances:

• You may get a lower loan amount. For example, instead of ₹5,00,000, the bank may only offer ₹1,00,000 or ₹2,00,000.
  
  
• You may be charged a higher interest rate compared to someone with a good credit score.
  
  
• You may have to show more documents like salary slips, ITRs, or business income proofs.
  
  
• Some banks may ask for a guarantor, someone with good credit to support your application.
  
  
• The processing time could be longer as the lender will manually check your background and income.
  
  
• You may be offered only secured loans, where you have to keep something like gold or FD as security.
   
• Some lenders may also reject your loan even if you have good income, just because they don’t have enough data.

Read More – How to Build a High Credit Score Without Taking Loans
 

Opt for NBFCs or Fintech Lenders

If banks say no or delay the process, don’t worry. There are easier options. NBFCs (Non-Banking Financial Companies) and fintech companies are more open to new borrowers. 

They use smart ways to check your ability to repay, like checking your bank transactions, salary credits, mobile bills, and more. These lenders understand that just because you are new to credit doesn’t mean you are a risky customer.

Why NBFCs Are More Flexible Than Traditional Banks

NBFCs are known to take a more practical approach. They focus more on your present income, stability, and digital footprint rather than only on your credit score. For example, if you have a stable job and earn ₹25,000 per month, an NBFC may easily approve a personal loan of ₹1,00,000. On the other hand, a bank may still hesitate if you have no score. 

Also, NBFCs have more straightforward rules and fewer formalities. This makes them an excellent choice for first-time borrowers.

Popular Fintech Platforms That Offer Loans Without Credit Checks

Some fintech apps and websites offer small-ticket loans without asking for credit history. They use AI tools and other smart checks to judge your repayment ability. 

These platforms are ideal for salaried or self-employed individuals who have not taken loans. One of the top options is LoansJagat, which helps you compare, choose, and apply for the best loan offers across multiple banks, all in one place.

Fintech Platforms That Offer Loans Without Credit History

Benefits: Quicker Approval, Easy Online Process, Less Paperwork

These platforms are made for speed and comfort. Most offer:

• Instant approval within minutes after basic KYC check
  
  
• Paperless loan process with no need to visit branches
  
  
• Easy EMI options, auto-debit from bank, and flexible tenures
  
  
• Mobile apps with loan tracking and repayment reminders
  
  
• No need to show a long financial history or credit report

This makes it easier for people with no credit record to get small personal loans quickly, especially in cities where digital banking is common.

Also Read  - Credit Score vs. Credit History: What Matters More for Loans?
 

Why It’s a Smart First Step to Build Credit

Getting your first personal loan from a fintech app or NBFC is not just about solving a money problem; it also opens the door to your financial future. Credit bureaus like CIBIL start building your score when you repay the loan on time. 

You’ll see your name in their system within a few months with a positive record. This makes you more eligible for bigger loans later, such as for buying a car, starting a business, or even applying for a home loan. Even a small loan of ₹25,000 or ₹1,00,000 can help you begin your journey into the formal credit world.

• You start building your credit report from zero, which helps banks trust you more in the future.
  
  
• Timely EMI payments show you are disciplined, which helps your credit score grow faster.
  
  
• Even a short-term loan of 6 to 12 months can be enough to build a solid first score.
  
  
• Once you build a score of 700 or more, you can apply for better interest rates and bigger loans.
  
  
• Some banks may offer you credit cards after just one successful loan, even with a limit of ₹25,000 or ₹50,000.
  
  
• You also learn good money habits, like budgeting for EMIs and keeping track of due dates.
  
  
• In the long run, this early step makes it easier to get education loans, car finance, or even home loans without stress.
  
  

Apply with Banks Where You Have a Relationship

If you already have a savings or salary account with a bank, use that relationship to your advantage. The bank can see your transactions, income, and spending habits even without a credit report. 

This informal data helps them trust you more than a completely new applicant. It’s easier to talk to them, explain your need, and request a small loan or credit card to get started.

• The bank already has access to your monthly salary credits or business income.
  
  
• You may get pre-approved loan offers even without asking, check your net banking.
  
  
• No need to submit many documents, as KYC is already done.
  
  
• If you maintain good balance and don’t default on charges, they see you as reliable.
  
  
• Many banks like HDFC, Axis, and ICICI give instant loans to account holders without credit score checks.

Show Proof of Stable Income and Employment

When you don’t have credit history, your income becomes your main strength. Lenders want to know that you earn regularly and have enough left after expenses to repay the loan. 

This is where salary slips, bank statements, and job letters become very useful. Even self-employed people can use ITRs or business income records.

Why Salary Slips and Bank Statements Matter

Banks use salary slips to confirm that you’re earning a fixed amount every month. If you earn ₹25,000 per month and ask for a ₹1,00,000 loan, your EMI may be around ₹4,500, which is manageable. Bank statements also show if your salary comes on time, if you save money, or if you have bounced any payments.

How a Stable Job Improves Your Credibility

If you’ve been working at the same job for 1 year or more, it gives lenders confidence. A stable job means your income won’t suddenly stop, and you are less likely to default on your EMIs. Even contract employees or freelancers can show consistent income as proof.

Documents That Strengthen Your Case

Prepare a neat file with your documents. Keep soft copies ready if you’re applying online.

Avoid Multiple Loan Applications at Once

Many people think applying for loans from many banks at once will increase their chances. But the truth is, it often does the opposite. When you apply at different places in a short time, each lender checks your credit report. 

These checks are called “hard inquiries.” Too many hard checks in a short period make you look like a risky borrower, even if you have no bad history. Lenders may think you are desperate for money or already rejected elsewhere. This can reduce your loan chances or increase the interest rate.

Each Loan Application Leaves a Mark

Every time you apply for a personal loan, whether online or offline, the lender pulls your credit report. This is a hard inquiry. If there are too many hard inquiries in one month, your future lenders may feel something is wrong. 

For example, if you apply to 5 lenders in 10 days, your chances of getting a loan may go down by 30% because it shows uncertainty.

Too Many Applications Lower Your Score

Even if you have no credit history, too many loan applications can still reduce your starting credit score. When the system sees multiple applications, it flags it as a risk. 

If you had just started building your score, say 650, it may drop to 600 or even lower, making it hard to get a ₹1,00,000 loan.

Conclusion

Getting a personal loan without a credit history may feel hard at first, but it’s not impossible. You just need to take smart steps. Start small, show that you earn regularly, and apply with trusted lenders, like NBFCs, fintech apps, or the bank where you already have an account. 

Avoid sending too many loan applications at once. Even a ₹25,000 loan can help you start building your credit score. 

Repay on time, keep good records, and in just 6 to 12 months, you’ll be ready for bigger loans with better interest rates. Think of this as the first step towards your financial freedom.

FAQs

1. Can I get a ₹1,00,000 loan with no credit history?
Yes, many NBFCs and fintech lenders offer ₹1,00,000 loans to new borrowers if you have a steady income and basic documents.

2. Will my credit score start building from my first loan?
Yes. Once your loan gets approved and you start repaying EMIs on time, your credit score starts getting built.

3. Should I apply to many lenders at once to get faster approval?
No. Too many applications can harm your chances. Apply to one or two trusted lenders only.

4. What documents do I need to apply for a personal loan with no credit score?
You’ll need Aadhaar, PAN, salary slips or ITR, bank statements, and sometimes a job offer letter or address proof.

5. Which apps or platforms are good for first-time borrowers?
Apps like KreditBee, CASHe, MoneyTap, EarlySalary, and PaySense are good options for small loans without credit history.