How to Get a Personal Loan with a Bad Credit Score: Smart Ways to Secure Approval
Introduction
A bad credit score can feel like a financial roadblock—especially when you need funds for emergencies, education, or debt consolidation. While it’s true that traditional lenders are cautious with low-score applicants, getting a personal loan with a bad credit score is not impossible.
In this guide, we’ll help you understand:
What qualifies as a bad credit score
Why lenders hesitate
And most importantly, how to improve your chances of loan approval even with a low score.
🧾 What is a Bad Credit Score?
In India, credit scores typically range from 300 to 900. A score below 650 is often considered risky by most banks and NBFCs.
| Credit Score | Rating | Loan Approval Chances |
|---|---|---|
| 750 – 900 | Excellent | Very High |
| 700 – 749 | Good | High |
| 650 – 699 | Fair | Moderate |
| 600 – 649 | Poor | Low |
| Below 600 | Very Poor | Very Low |
🛠️ How to Get a Personal Loan with a Bad Credit Score
✅ 1. Approach NBFCs and Digital Lenders
Banks might reject low-credit applicants, but NBFCs (Non-Banking Financial Companies) and fintech lenders have relaxed norms and use alternative credit models.
Tip: Platforms like Vizzve, EarlySalary, and MoneyTap consider income stability and digital behavior over just credit scores.
✅ 2. Apply for a Lower Loan Amount
Lenders are more likely to approve smaller loans for bad credit applicants. Start with a modest amount, repay on time, and gradually build trust.
✅ 3. Add a Co-Applicant or Guarantor
A co-applicant with a strong credit profile (spouse, parent, sibling) can boost your approval chances. The lender considers combined repayment capability.
✅ 4. Show Proof of Income Stability
Highlight:
Salary slips
Bank statements
Freelance contracts (if self-employed)
This proves you have repayment capacity, even if your credit score is weak.
✅ 5. Consider a Secured Personal Loan
Pledge an asset—such as FD, gold, or insurance—for a secured personal loan. These have lower interest rates and are easier to get with bad credit.
✅ 6. Use Salary Advances or Employer Tie-Ups
Some employers tie up with NBFCs for salary advance loans, often without hard credit checks. Check with your HR or payroll provider.
✅ 7. Correct Credit Report Errors
Many credit reports have mistakes. Obtain your CIBIL report for free once a year and check for errors in:
Loan closures
EMI status
Identity mismatches
Rectify them with the credit bureau to improve your score quickly.
🔄 Key Takeaway: Credit Score Isn’t Everything
While credit score matters, many lenders today look at:
Your monthly income
Debt-to-income ratio
Employment status
Digital behavior & spending patterns
So, if you take the right steps, a bad credit score won’t always keep you from getting the financial help you need.
📌 Conclusion
Yes, it’s harder—but not impossible—to get a personal loan with a bad credit score. Start small, provide proper documentation, and show a responsible attitude. Once approved, make timely EMI payments to repair your credit and improve future borrowing potential.
FAQs
🔸 Can I get a personal loan with a credit score of 600?
Yes, especially through NBFCs or fintech lenders who accept low-credit applicants based on other criteria like income and stability.
🔸 Will my interest rate be higher if I have bad credit?
Yes, lenders charge higher interest to compensate for the perceived risk.
🔸 Can a guarantor help me get a loan with bad credit?
Absolutely. A co-signer with good credit improves your eligibility significantly.
🔸 What’s the best type of loan for bad credit borrowers?
Secured personal loans or small-ticket loans from NBFCs or salary-linked loans work well.
🔸 How can I fix my credit score after getting a loan?
Pay all EMIs on time, reduce credit card usage, and don’t apply for multiple loans simultaneously.
Published on : August 3RD
Published by : Kaushik
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