10 May, 2025 | 11:00 IST
Your CIBIL score — usually ranging from 300 to 900 — is a major factor when applying for a personal loan in India. Most lenders consider a score of 750 and above as ideal for approving loans. But what if your score is below that threshold? Does that mean the end of the road? Not necessarily.
While having a low CIBIL score or credit score may limit your borrowing options, it doesn’t make it impossible to get a credit loan. With a strategic approach, responsible borrowing behaviour and the right lender, you can still secure the funds you need.
If you are looking for a reliable and hassle-free borrowing option, Moneycontrol, in partnership with multiple lenders, provides access to 100% digital personal loans. You can borrow up to Rs 50 lakhs in a completely paperless process. Interest rates start from 10.5% per annum, with complete transparency and no hidden costs.
Now, let’s find out how to get a credit loan in India, even with a low CIBIL score.
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A CIBIL score or credit score is a numerical summary of your creditworthiness based on your borrowing and repayment history. It is calculated by TransUnion CIBIL, one of India’s four leading credit bureaus. According to CIBIL, credit scores in India are categorised into five distinct bands ranging from 300 to 900.
These include:
Lenders use this score to assess the risk of lending money to a borrower. A score of 800 or above places a borrower firmly in the Super Prime category, making them highly attractive to lenders due to their strong creditworthiness. On the flip side, those with scores below 680 fall into the Subprime category. It indicates a higher perceived risk and often leads to loan rejections or high interest rates.
Yes, you can, but with certain conditions. Having a low credit score doesn’t necessarily shut the door on getting a personal loan. With the right approach and financial discipline, you can still boost your chances of approval through alternative lenders, strategic planning and a clear repayment track record.
NBFCs And Fintech Lenders
Traditional banks may turn you away, but NBFCs and fintech lenders often have more relaxed criteria. They might accept a lower score if you meet other requirements like stable employment, regular income, or minimal outstanding debt.
Opt For A Secured Loan
One effective way to get a loan despite a low score is to provide collateral. Secured loans reduce the lender’s risk while increasing the possibility of a quick approval.
Some of the secured loan options include:
Gold loan: This is Offered by banks and NBFCs. Your gold jewellery acts as security.
Loan against FD: If you have a fixed deposit, you can borrow against it without breaking the deposit.
Loan against property: Residential or commercial property can be used as collateral.
Get A Co-Applicant Or Guarantor
Adding a co-applicant with a strong credit history — like your spouse, parent, or sibling — can improve your chances of loan approval. The lender considers the creditworthiness of both applicants, which helps balance out the risk posed by your low score. Similarly, having a guarantor for your loan gives the lender a safety net in case of default.
Show Proof Of Income And Stability
If you have a steady income and a secure job, make sure to highlight that in your application. Submit income documents such as salary slips, bank statements, Form 16, or business income proofs. Lenders might be willing to overlook a low credit score if you can show that your cash flow is strong and consistent enough to meet the EMI obligations.
Negotiate With Your Existing Bank
If you already have a savings account, fixed deposit, or credit card with a particular bank, consider reaching out to them first. Banks are often more comfortable lending to known customers, especially if you've maintained a good track record with your other accounts.
Apply For A Smaller Loan Amount
A smaller loan reduces the risk for the lender. If you need funds urgently, consider applying for a lower amount and gradually building up your creditworthiness through timely repayments.
Watch Out For High Interest Rates
One of the biggest pitfalls of taking a loan with a low CIBIL score is higher interest rates. Always compare offers from multiple lenders and read the fine print to understand the total cost of borrowing.
Avoid predatory lenders who charge exorbitant rates and hidden fees. Use online tools like EMI calculators to plan your repayment and ensure that the loan remains manageable.
Check Your CIBIL Report For Errors
Before applying for any loan, it’s wise to check your CIBIL report. Sometimes, the score may be low due to reporting errors — like loans you didn’t take or incorrect EMI status. If you find errors, raise a dispute and get them corrected. An updated score might improve your eligibility.
A low CIBIL score doesn’t have to be the end of your borrowing journey. With the rise of digital lending and secured loans, among other options, there are still plenty of doors open. The key lies in understanding your options, borrowing responsibly and working towards improving your credit profile.
If you need urgent funds, you can apply for a personal loan up to Rs 50 lakhs through the Moneycontrol app. As many as eight lenders are providing personal loans in a completely paperless process through Moneycontrol’s digital lending platform. The interest rates start at only 10.5% per annum and the amount can be disbursed within a few minutes to a few hours.
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