Your CIBIL score plays a major role in determining whether you qualify for a personal loan — and at what interest rate. Typically, banks and NBFCs prefer borrowers with a score above 750.
But what if your score is lower? Can you still get a personal loan?
The good news is — yes, you can.
While it’s more challenging, several strategies can help you secure a loan even with a low or moderate credit score.
Let’s break down the exact steps you should follow.
1. Understand Why Your CIBIL Score Is Low
Before applying, check your CIBIL report to identify the cause — late payments, high credit utilization, too many loan inquiries, or defaults.
Knowing the reason helps you take corrective action and present your case better when approaching lenders.
👉 Tip: You can check your credit score for free once a year at CIBIL’s official website.
2. Apply with a Co-Applicant or Guarantor
If you have a low credit score, adding a co-applicant (like a spouse or parent) with a higher score can increase your chances of approval.
The lender’s risk reduces when there’s a stronger secondary income or repayment backup.
This is one of the most effective ways to get approved despite a poor credit record.
3. Choose an NBFC or Digital Lender
Banks are often stricter about credit scores.
However, NBFCs (Non-Banking Financial Companies) and digital lending platforms use alternative data — like your income stability, employment history, or transaction patterns — to assess eligibility.
These lenders are generally more flexible and can offer small-ticket personal loans even for scores below 650.
4. Opt for a Secured Personal Loan
If your credit score is low, offering collateral can strengthen your application.
You can pledge:
Fixed deposits (FDs)
Gold
Mutual funds or insurance policies
This helps you get a secured loan at lower interest rates while rebuilding your credit record.
5. Show Proof of Stable Income
Even if your credit history isn’t great, showing steady income or salary slips reassures lenders about your repayment ability.
Attach salary proofs, IT returns, and bank statements to increase credibility.
A consistent income history can sometimes outweigh a low CIBIL score.
6. Request a Lower Loan Amount First
Start small.
Lenders are more likely to approve low-value personal loans for applicants with weak credit.
Once you repay the first loan responsibly, it strengthens your credit profile — helping you qualify for bigger loans in the future.
7. Avoid Multiple Loan Applications
Applying to multiple lenders at once creates multiple hard inquiries on your credit report, which can further reduce your score.
Instead, compare loan offers online, then apply to one or two lenders that specifically cater to low-credit-score borrowers.
8. Consider Salary-Linked or Employer-Tie-Up Loans
If your employer has partnerships with specific banks or NBFCs, you can avail salary-based personal loans at preferential rates, even with a lower score.
Such tie-up loans rely on salary continuity rather than credit history.
9. Build Your Score for Future Loans
While getting a loan with a low CIBIL score is possible, it’s always better to improve your score by:
Paying EMIs and bills on time.
Keeping your credit utilization ratio below 30%.
Avoiding too many credit cards or loans at once.
Within 6–12 months of disciplined repayment, your CIBIL score can improve significantly.
FAQs: Getting a Loan with a Low CIBIL Score
1. Can I get a personal loan with a score of 550 or below?
Yes, but only from select NBFCs or fintech lenders, usually with a higher interest rate or collateral.
2. Will my credit score improve after taking a personal loan?
Yes, if you repay consistently on time, your score will gradually increase.
3. Are there any government-backed options?
You can explore Mudra loans or co-operative bank loans for small amounts, which have lenient eligibility.
4. What documents do I need?
Basic KYC, salary slips, bank statements, and proof of address/income are usually required.
5. Should I use a credit repair service?
Avoid unverified credit repair companies. Instead, focus on genuine repayment and financial discipline.
Published on : 8th October
Published by : SMITA
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