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Well, yes, you can definitely get a personal loan even with poor CIBIL score but there will be a little hustle involved in the process. Nowadays lenders consider much more than just your credit score; in fact, your income, employment, capacity to pay back and overall financial status will be taken into account as well. Although generally, the higher your credit score, the better your chances of approval and the lower the interest rate, some banks, NBFCs and digital lenders do provide low CIBIL personal loans or bad credit loans to eligible applicants. Finding out how to get a personal loan with a low CIBIL score helps you choose the right lender, increase your eligibility and avoid costly borrowing mistakes. In this blog, we’ll discuss all that you need to know about getting a personal loan for a low CIBIL score in India, along with some practical tips to improve your chances of getting approved.
Key points
Yes, one can get a CIBIL personal loan with a low CIBIL score, but it is more difficult to get approved than a person with a good CIBIL history. Most lenders look at your CIBIL score to gauge your creditworthiness, but it is not the only thing they use. A low credit score is not a hurdle if you have steady income, a stable job and good repayment capacity.
The table below shows how lenders generally interpret different credit score ranges:
Over time, your CIBIL score can fall because of a few factors. One of the common reasons is non-payment of EMIs or delay in payment of EMIs. It shows inconsistent repayment behaviour. A high credit utilisation ratio, multiple loan applications in a short span of time, settling loans instead of paying them in full and defaults on credit cards can also negatively impact your score.
Some banks and NBFCs may approve a low CIBIL personal loan for financially sound borrowers. These lenders tend to look at your entire financial situation and not just at your credit score.
The kind of loan matters, too. An unsecured personal loan is one that doesn’t require collateral, so lenders are more careful about approving applicants with bad credit. Secured loans use assets such as fixed deposits, property or gold as collateral. This lowers your lender’s risk and increases your chances of approval.
Read More - Can I improve my CIBIL score after settlement?
Bad credit loans might also be an option for the borrowers with bad credit history. These types of loans are meant for people who have poor credit ratings. The interest rates of such loans are quite high, although the amount of money that can be borrowed is low and the period in which the repayment is made is also very short. However, bad credit loans are available for eligible individuals regardless of their poor credit rating.
A question that many borrowers have is how to get a personal loan with a low CIBIL score after being rejected for a loan. Even if your CIBIL score is low, it can lower your chances of getting approved but doesn’t mean that you won’t be able to get a personal loan. Lenders will consider your overall financial position, including your income, employment status and ability to pay. Nailing it can shoot up your chances of getting approved.
The first step is to take a good look at your credit report. Check that all loan accounts, credit card information and payment history are accurate. Incorrect information, duplicate accounts, or old records can sometimes reduce your CIBIL score. If you find any mistake, raise a dispute with the concerned Credit Bureau, wait for the corrections, and then apply for a loan.
Lenders have different lending policies. Typically banks require stricter qualifications and may ask for a higher credit score. On the other hand, many NBFCs, fintech lenders, and digital lending platforms prefer to consider the applicant's current financial position rather than the credit score. Look for Banks, NBFCs and reliable lending platforms like LoansJagat and zero in on a lender whose eligibility criteria align with your financial profile.
A strong financial profile can help you overcome a low credit score. Consider ways to improve the things lenders look at before you apply.
These measures show your ability to repay the loan and increase lender confidence.
If unsecured personal loans are difficult to acquire, secured loans are a practical alternative. Because these loans are secured with collateral, lenders are at a lower risk and may be more likely to approve the application.
Some of the common options for secured borrowing include a loan against a fixed deposit, a loan against property or a gold loan. Depending on the lender and the asset pledged, these options may also have lower interest rates than unsecured loans.
Don't just grab a loan because it gets approved fast. Shop around and compare different lenders for the best deal for you, considering the total cost of borrowing and repayment flexibility.
Also Read - Which option affects the CIBIL score more?
Taking the time to compare loan offers can help you find a personal loan that matches your financial needs and help you avoid paying for features you don’t need. These steps increase the chances of getting approval when learning how to get a personal loan with a low CIBIL score.
Getting a personal loan with a low CIBIL score in India is easier now than it was a few years ago. Several NBFCs, digital lenders and loan marketplace platforms are now providing flexible lending as banks concentrate on credit scores. Apart from CIBIL scores, these lenders consider income, employment and banking history, helping eligible borrowers get loans even if they have lower credit profiles.
A low CIBIL personal loan may carry higher interest rates or more stringent repayment terms. Lenders do this because borrowers with lower credit scores are viewed as riskier applicants.
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Many public and private banks offer personal loans to applicants with slightly lower credit scores, especially if they have a stable salary, regular income and good repayment history. Banks usually have strict eligibility criteria, but existing customers with salary accounts may be given better consideration.
The approval process normally takes a couple of business days. Normally, the applicants need to submit identity proof, address proof, PAN, Aadhaar, salary slips, income proof and bank statements.
NBFCs, or non-banking financial corporations, are typically more flexible than banks while assessing applications for personal loans. NBFCs are recognized to give low CIBIL personal loans that are based on the income, job stability, ability to repay, and banking experience of the borrower.
Approvals by NBFCs are usually quicker but come at high-interest rates for those with low credit ratings.
Digital lending platforms have made borrowing easier with fully online applications. Many provide an immediate personal loan with minimum paperwork and fast verification.
Instead of just the CIBIL score, digital lenders could look at:
Successful applicants can be approved within minutes, and disbursal can be made within hours of successful verification.
Loan marketplace platforms help borrowers compare multiple banks, NBFCs, and fintech lenders through a single application. This helps applicants to find lenders whose eligibility criteria best match their financial profile.
These platforms also make it easier to compare the interest rates, processing fees, repayment tenures and approval timelines before applying. When considering a personal loan for a low CIBIL score in India, it is recommended for borrowers to compare various lenders to improve the chances of getting a favourable loan with competitive terms.
Compare eligibility, interest rates, fees and repayment terms to select a loan that suits your repayment capacity.
Low CIBIL Score Personal Loan is Possible. You just need the right approach Finding the right lender, possessing a good financial profile, checking credit reports and carefully comparing loans all help improve your approval odds. Compare lenders and Get the right personal Loan for low CIBIL score in India with the help of trusted platforms like LoansJagat
Q. My CIBIL score is poor and my PDC too. Can I apply for a personal loan of 5,00,000 rupees?
A. It is possible but only if your CIBIL score is above 600 and you have a steady income source. If your CIBIL score is less than 600, then you will need to explore secured loans as getting unsecured loans is not going to be easy.
Q. Is it possible to get a personal loan with 450 CIBIL score?
A. A CIBIL score of 450 is considered to be poor, and thus obtaining loan approval is going to be difficult, yet there are lenders that may consider you if you have a guarantor or collateral. Having a good CIBIL score can work wonders for your loan approval chances even before applying for the same.
Question: What is the minimum CIBIL score required for a personal loan in India?
A: Most lenders require a CIBIL score of 650 or above. However, most banks require 700-750 as an acceptable score. But your repayment track record, your income level and financial standing play an important role here, and some NBFCs might even give you a loan with a low CIBIL score.
Question: I have a CIBIL score of 734. Can I get a personal loan? All banks are refusing me a loan.
A: 734 CIBIL score is considered to be a good one, but other factors such as repayment track record, DPD history, income and credit standing come into play too.
Q. My CIBIL score is low, and I want to take a loan to clear some old debt. What can I do?
A. A low CIBIL score can be a hurdle while availing a loan. But some lenders might consider your application, depending on your overall financial profile. By consolidating debt, taking out secured loans and making timely repayments, you can manage your existing debt and improve your chances of getting a loan in the future.
Q. Is it possible to get a personal loan without a CIBIL score?
A. Yes, there are certain NBFCs and digital lenders who may provide a personal loan without a CIBIL score, based on your income, job stability, bank statements and repayment capacity. If you have little or no credit history, getting a secured loan may also boost your chances of approval.
Q. I have a CIBIL score of 779, and my personal loan application was rejected.
A. Just having a high CIBIL score does not guarantee approval, as lenders also check your repayment history, FOIR, existing EMIs, salary and recent credit enquiries. Having a better repayment history and less debt increases your chances of getting approval for the loan. Fewer loan requests are also better.
Q. Can I get a small personal loan of Rs. 15,000 and repay it through EMIs?
A. Yes, many banks, NBFCs, and digital lenders provide small personal loans with easy EMI repayment options, based on eligibility. Compare interest rates, processing charges and repayment terms before choosing a lender suiting your financial needs.
Q. Can a missed EMI significantly reduce my CIBIL score, and how can I recover it?
A. Yes, if you miss even a single EMI, your CIBIL score can come down by a big chunk, especially if you had a good payment history before. Making regular EMI payments, having a low credit utilisation ratio and requesting correction of reporting errors can help you improve your score over time.
Q. I have a low CIBIL score, can I get a personal loan of ₹2,00,000?
A. Yes, some NBFCs and digital lenders may entertain your application if you have a stable income and can provide valid income proof. Having a strong repayment capacity and comparing multiple lenders will increase your chances of getting approved for a loan.
