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5 ways to get personal loan even with low CIBIL score

5 ways to get personal loan even with low CIBIL score

5 ways to get personal loan even with low CIBIL score
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By Anshul  Aug 27, 2022 11:52:08 AM IST (Published)

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The CIBIL or credit score is an important metric that is used by financial institutions to check creditworthiness when they receive loan requests from individuals. So, how is it possible to get a loan even when the score is low? Read on to find out.

Credit score, also called CIBIL score in common parlance, reflects your creditworthiness. It is an indicator of how likely you are to repay a personal loan or credit card dues responsibly. A CIBIL score above 700 is usually considered a good one. The higher your score, the greater the likelihood of your personal loan application being accepted.

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When you apply for a loan, most banks and NBFCs may fetch your credit score and report from CIBIL. While the lender may approve your application after determining your eligibility, they may also cancel the application in case of low CIBIL score.


But, what if you have a low/poor credit score and require a loan for an emergency? Or if you're a new credit customer and do not have a credit score? How would you get a loan in that case? Well, there’s not much to worry about!

There are some ways through which you can try getting a loan even with a low credit score:

Apply at an NBFC or fintech lender

If your CIBIL score is low, you can apply at NBFCs or fintech lenders for loans. NBFCs and fintech lenders have relaxed policies towards customers with low credit scores. However, interest rates charged by them are usually higher than what is offered by banks.

It's important to note that in case you apply at a bank and application gets rejected, that may further downgrade the CIBIL score.

Apply with a co-applicant

Adding an earning family member such as a spouse or family member who has a decent credit history as a co-applicant to the personal loan application reduces the credit risk for the lender. This is because the co-applicant also becomes equally responsible for the repayment of the loan, according to Paisabazaar.

Opt for a smaller loan

Since a lender may be reluctant to offer a loan to an individual with a low credit score, you can also take a small loan for the time being so that it’s easy to repay it and strengthen creditworthiness in the process.

Once you build your credit with it, you can opt for a bigger loan from a bank or any other financial institution.

Apply for secured loan

There are some banks and financial institutions which offer loans to low credit score holders provided they apply for a mortgage-backed loan. Those with urgent need of funds can consider options like a gold loan, loan against property or loan against securities, where the credit score has a relatively lesser impact on the lender’s decision.

In this case, loans are generally accepted by lenders as collateral to disburse a secured loan.

Get a guarantor

If you default, the onus of repaying the loan is on the guarantor. Thus, having a guarantor with a good credit score can also be the solution.

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