Getting a loan with a low CIBIL score (typically below 650) can be challenging, but not impossible. Here’s a detailed guide to help you secure a loan despite a poor credit rating.
🧾 What is a CIBIL Score?
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A CIBIL score is a three-digit number (300–900) that reflects your creditworthiness.
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Most banks require a minimum score of 700+ for approving loans.
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A low score indicates defaults, missed payments, or high debt levels.
✅ 10 Proven Ways to Get a Loan with a Low CIBIL Score
1. Apply with NBFCs or Fintech Lenders
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Unlike traditional banks, Non-Banking Financial Companies (NBFCs) and digital lenders often have relaxed credit score requirements.
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They evaluate borrowers based on income, job stability, or banking behavior.
Popular NBFCs: Bajaj Finserv, Fullerton India, EarlySalary, CASHe, MoneyTap
2. Choose a Secured Loan
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Offer collateral like gold, fixed deposits, property, or insurance policies.
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Secured loans carry lower interest rates and higher approval chances.
Types of secured loans:
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Gold loan
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Loan against FD
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Loan against property (LAP)
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Car title loan
3. Opt for a Guarantor or Co-applicant
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Adding a family member with good credit as a co-applicant or loan guarantor increases trust for the lender.
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Their credit score will supplement your low one.
4. Show Strong Income or Salary Slips
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Present your recent bank statements, salary slips, and job offer letter.
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Stable income proves your ability to repay, even if your credit score is low.
5. Explain the Low Score with Proof
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If your score dropped due to a medical emergency, job loss, or COVID-19, share documentation and explain it clearly.
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Lenders may consider contextual factors during review.
6. Take a Smaller Loan First
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Consider starting with a small personal loan from a fintech or P2P lender.
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Repay it on time to improve your credit score, and then apply for a higher amount later.
7. Try Credit Unions or Cooperative Banks
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These institutions are more relationship-based than score-driven.
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If you’re a member, they may be more lenient in lending.
8. Peer-to-Peer (P2P) Lending Platforms
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Platforms like Faircent, Lendbox, and i2iFunding connect borrowers directly with individual lenders.
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They assess risk beyond CIBIL scores and may offer competitive rates.
9. Negotiate with Your Existing Bank
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If you have a long-standing relationship with your bank, they may consider your request based on:
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Past transactions
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Savings account balance
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Existing FD/recurring deposit
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10. Use Salary Advance or Employer-Based Loans
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Some employers or HR platforms offer employee advance loans (e.g., KreditBee, EarlySalary).
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These are repaid through salary deductions and don’t always check CIBIL score.
📊 Documents Required
| Document Type | Example |
|---|---|
| Identity proof | Aadhaar card, PAN card, Voter ID |
| Address proof | Electricity bill, rent agreement |
| Income proof | Salary slips, ITRs, bank statements |
| Employment proof | Offer letter, employee ID |
| Collateral proof | Property documents, FD certificate, gold |
❗ Mistakes to Avoid
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Applying with multiple lenders at once – triggers hard inquiries, lowering score further
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Ignoring hidden charges or prepayment penalties
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Missing EMIs post-loan approval – damages your creditworthiness further
🧠 How to Improve Your Score After Getting a Loan
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Pay all EMIs on time
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Clear outstanding credit card dues
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Avoid taking multiple loans at once
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Limit credit utilization ratio (<30%)
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Regularly check credit reports for errors
💡 Real-Life Example
Ravi, a delivery executive from Pune, had a CIBIL score of 580 due to missed EMIs. He applied for a gold loan from Muthoot Finance, repaid it on time, and raised his score to 700+ within 18 months. Later, he qualified for a ₹2 lakh personal loan from a digital lender.
✅ Conclusion
While a low CIBIL score can delay access to loans, it doesn’t close the door. By using collateral, finding the right lenders, and proving income stability, you can secure the funds you need — and rebuild your credit over time.
