Having a bad CIBIL score can feel like hitting a wall when you’re trying to get a loan. Whether it’s a personal loan for an emergency or a car loan for your dream vehicle, most lenders check your credit score first. If your score is low, they might reject your application without even looking at your income or repayment ability.
But here’s the good news — a bad CIBIL score doesn’t mean the end of the road. There are simple and easy ways to get a loan, even with poor credit. With the right strategies and information, you can improve your chances and get the money you need.
Know Simple and Easy Ways to Get a Loan
| Feature | Details |
|---|---|
| Topic | Ways to get a loan with a bad CIBIL score |
| What is a bad score? | CIBIL score below 600 is considered poor |
| Loan Options | Secured loans, NBFC loans, peer-to-peer (P2P) lending |
| Strategies | Use a co-applicant, show income proof, apply with NBFCs |
| Improvement Tips | Pay EMIs on time, reduce credit card debt, check CIBIL report for errors |
A bad CIBIL score can definitely make getting a loan difficult, but it’s not impossible. By choosing the right lenders, offering collateral, or applying with a co-applicant, you can still get the financial help you need. Most importantly, use this opportunity to work on improving your credit score. A little effort today can open big financial doors tomorrow.
What is a CIBIL Score and Why Does it Matter?
Your CIBIL score is a three-digit number ranging from 300 to 900 that reflects your creditworthiness. The closer your score is to 900, the better your chances of getting approved for a loan. A score:
- 750 or above: Excellent
- 700-749: Good
- 600-699: Fair
- Below 600: Poor
Banks and financial institutions use this score to assess your risk as a borrower. A low score suggests you might have missed payments, defaulted on a loan, or used credit irresponsibly.
see also: HDFC Mutual Fund: Will Your Investment Increase 4 or 5 Times in 10 Years?
Why Do People Have Bad CIBIL Scores?
A bad CIBIL score could be due to several reasons:
- Missed credit card or loan EMIs
- High credit utilization (using most of your credit limit)
- Too many loan applications in a short time
- Defaulting on loans
- Errors in the credit report
If you’re unsure of your score, check it for free on the CIBIL website and verify all the details.
Simple and Easy Ways to Get a Loan with Bad CIBIL Score
1. Apply for a Secured Loan
A secured loan is one where you offer collateral — such as a fixed deposit (FD), gold, or property. Since the lender has something to fall back on if you default, they are more willing to lend even with a bad score.
Example: You can take a loan against your FD or LIC policy. The interest rate will also be lower compared to personal loans.
2. Approach Non-Banking Financial Companies (NBFCs)
NBFCs like Bajaj Finserv, Tata Capital, and Fullerton India often have relaxed eligibility criteria compared to traditional banks. They may consider your income, employment status, and relationship with the lender more than your credit score.
Learn more: Bajaj Finserv – Loan with Low CIBIL
3. Use a Co-applicant or Guarantor
If you can rope in a family member or friend with a good CIBIL score, it can significantly increase your loan approval chances. A co-applicant shares the responsibility of repaying the loan, so lenders feel more confident.
Tip: Make sure your co-applicant is aware of their responsibility, as their credit report will also be affected by your repayment behavior.
4. Demonstrate Stable Income and Employment
Show your salary slips, IT returns, and bank statements to prove your ability to repay. Lenders may overlook your low score if your income is strong and stable.
Tip: Self-employed individuals can use GST returns or business income proof.
5. Apply for a Lower Loan Amount
If you’re struggling to get approval for a high-value loan, try applying for a smaller loan. Lenders may be more comfortable giving you Rs 50,000 than Rs 5 lakh.
6. Peer-to-Peer (P2P) Lending Platforms
Online platforms like Faircent and Lendbox allow individuals to borrow directly from other individuals. These platforms are regulated by RBI and often consider other factors beyond your CIBIL score.
Note: Interest rates may be slightly higher, but it’s a good option if banks are rejecting your application.
7. Get a Salary-Backed Loan from Fintech Platforms
Apps like KreditBee, EarlySalary, and CASHe offer quick short-term loans based on your income. Even users with low credit scores can get approval if they meet income and employment criteria.
Improve Your CIBIL Score for Future Loans
Even if you get a loan with a bad score, it’s important to improve it for better financial health. Here’s how:
1. Pay All EMIs and Credit Card Bills on Time
Timely repayment is the most critical factor in your score. Set reminders or use auto-debit to ensure payments are made without fail.
2. Keep Credit Utilization Below 30%
If your credit card limit is Rs 1 lakh, avoid using more than Rs 30,000. This shows you can manage credit responsibly.
3. Avoid Multiple Loan Applications
Each application results in a hard inquiry on your credit report. Too many inquiries signal desperation and reduce your score.
4. Check for Errors in Your Credit Report
Visit CIBIL Dispute Resolution if you find wrong entries or loans that don’t belong to you.
5. Diversify Your Credit Mix
Having both secured (e.g., home loan) and unsecured (e.g., personal loan) credit types can positively influence your credit profile.
see also: SIP Investment: Investing ₹39,000 Can Create a Fund of ₹1 Crore in 10 Years
CIBIL Score Know Simple and Easy Ways to Get a Loan FAQs
Q1: Can I get a loan if my CIBIL score is below 600?
Yes. Try applying with NBFCs, opt for secured loans, or use a guarantor.
Q2: Will taking a loan with a bad CIBIL score improve my credit?
If you repay on time, it will have a positive effect on your credit history.
Q3: How long does it take to improve a CIBIL score?
Generally, 6 to 12 months of good repayment behavior can bring noticeable improvement.
Q4: What is the minimum CIBIL score for a personal loan?
Most banks require 750+, but NBFCs and fintech lenders may offer loans with scores as low as 600.
Q5: Is P2P lending safe?
Yes, platforms like Faircent and Lendbox are RBI-registered and follow proper lending norms.
