Low CIBIL Score? Here’s How You Can Still Get a Personal Loan

A low CIBIL score can make you feel like you are at a dead-end when you are trying to get a personal loan. Most lenders consider your credit score to be an indicator of your financial behaviour and repayment discipline. In general, a score below 650 is considered to be risky which is going to result in either rejection or a loan offered to you with stricter terms.

On the other hand, a low score does not mean you are totally out of the game. You can still find ways to improve your chances of getting a loan approved and having access to credit when you need it. It doesn’t matter if you are applying through a bank, NBFC, or a personal loan app, the strategy is the same — demonstrate that you are financially stable and reliable for timely repayment.

Why a Low CIBIL Score Affects Loan Approval

The CIBIL score that lies between 300 and 900 is a great number that lenders use to give a credit evaluation about you. A low score is in most cases a consequence of some setbacks in a person’s credit behaviour record, e.g., late EMIs, high credit utilisation, or loan defaults. When lenders see a low score, they see the highest risk in giving money, especially for unsecured loans such as personal loans.

Since there is no guarantee in the transaction, the lenders rely only on your repayment history to decide whether they can lend you money. A low score means there are irregularities in the repayment, which decreases the possibility of your approval — or if you get approved, you will probably have to pay a higher interest rate.

How to Get a Personal Loan with a Low CIBIL Score

Applying with an NBFC or Alternate Lender Traditional banks usually have very strict requirements that must be met in order to qualify. If your score is low, try applying with an NBFC (Non-Banking Financial Company) or digital lender. These organizations are usually much more flexible and they give more weight to the present income, the stability of the job, and the overall situation of the finances.

Many users also explore options through a personal loan app, as digital lenders tend to focus on holistic profile checks instead of just your score.

1. Show Proof of Stable Income Even with a low CIBIL score, having a steady income improves your chances. If your current salary or business income is consistent and sufficient to cover the EMI, lenders may be more willing to offer you a loan.
2. Submitting salary slips, bank statements, or ITRs strengthens your case and shows you’re financially capable of handling the repayment, despite your past credit issues.
3. Offer Collateral or Apply for a Secured Personal Loan If unsecured loan approval seems difficult, consider opting for a secured personal loan. You can pledge assets like fixed deposits, gold, or property to back the loan. This lowers the lender’s risk and improves the chances of approval.
4. Collateral-based loans also tend to come with lower interest rates, making them a practical option if you’re looking for more manageable EMIs.
5. Apply with a Co-applicant or Guarantor Adding a co-applicant with a good credit score and stable income can help balance your risk profile. Lenders assess the combined eligibility, making it more likely for the loan to be approved.
6. Keep the Loan Amount Small With a low score, requesting a high loan amount reduces your chances. Start small — apply for a modest amount that matches your repayment ability. A smaller loan is easier for lenders to approve and gives you a chance to rebuild your credit record.

Once repaid successfully, your score can become better thus providing access to loans of higher amounts in the future.

Look for Offers You Are Pre-Approved for Some lenders may still offer pre-approved loans based on your relationship with them, even if your credit score is low. Check your email or SMS communications or log in to your net banking to see if such offers exist.

Moreover, a personal loan app might be able to present you with different personalized offers from various lenders without hurting your credit score. Soft checks will let you evaluate your situation without causing a hard inquiry.

Do Not Apply to Many Lenders Simultaneously Sending several applications for a while can hurt your score even more. A hard enquiry will be done for every application and it will look like you are hunting for credit. Alternatively, determine your eligibility with one or two lenders where you are most likely to qualify.

Suppose the personal loan app pre-screens your profile before a hard pull. In that case, it can assist you in minimising the credit report activities that are not necessary.

In conclusion

It might be very challenging to get a personal loan if your CIBIL score is low, but it is not impossible. You can improve your chances of getting approved by a lender through various ways such as targeting flexible lenders, demonstrating income stability, or using a co-applicant. Additionally, a personal loan app can facilitate you with the names of lenders who are open to lower scores. Start small, make repayments on time, and not only will you get the credit you need, but you will also be able to rebuild your financial credibility gradually.