Unlocking Personal Loan Opportunities with a Low CIBIL Score: 5 Proven Tips

The CIBIL score, which ranges from 300 to 900, represents a person’s credit history and considers things like loan repayments, credit card usage, unpaid balances, and credit behaviour. A higher CIBIL score indicates a healthy credit profile, making it easier to get loans at reasonable interest rates.

However, a low credit score may cause difficulties at times, don’t worry! This post will explore how you can avail of a personal loan despite having a less-than-perfect CIBIL score.

Understanding CIBIL Score

Your CIBIL score significantly shapes your financial journey. It is used by lenders, such as banks and financial organisations, to determine the risk of lending money to borrowers.

You become a favoured borrower in the eyes of lenders if you have a good CIBIL score (around 700 or above), which reflects a more favourable credit history, responsible credit behaviour, and regular repayments. A low CIBIL score, on the other hand, can represent a history of missed payments, defaults, or heavy credit utilisation, which could impact your ability to obtain credit.

Tips to Get a Personal Loan with a Low CIBIL Score

Below are five tips that can help you improve your chances of obtaining a personal loan, despite a low CIBIL score. 

  • Know your credit report inside out

Understanding the details of your credit report is the first step toward improving your loan approval chances. First and foremost, get a grip on what a good credit score is for you, obtain a copy of your credit report, and review it meticulously for any errors or discrepancies. Rectify any inaccuracies with the credit bureau to improve your CIBIL score. Familiarise yourself with the factors impacting your scores, such as outstanding dues, late payments, or high credit utilisation, and take the necessary steps to address them.

  • Select a secured personal loan

Consider getting a secured personal loan if your CIBIL score is low. Collateral, such as Fixed Deposits (FD), real estate, or gold, is required for secured loans and acts as a safety net for the lender. Lenders might be more willing to approve a secured loan even with a lower credit score because the risk is reduced. However, remember that failing to repay a secured loan could result in the loss of your collateral; therefore, proceed with care and confidence that you can make the repayments.

  • Seek assistance from a co-applicant or guarantor

If your credit score is hindering your personal loan approval, you can approach a family member or a trusted friend to be a co-applicant or guarantor for the loan. A co-applicant shares equal responsibility for loan repayment, whereas a guarantor pledges to repay the loan if you default. A lender may consider the co-applicants or guarantor’s creditworthiness, potentially increasing the chances of loan approval.

  • Focus on smaller loan amounts

When applying for a personal loan with a low CIBIL score, consider requesting a smaller loan amount. A lower loan amount may be more manageable for lenders to approve as it presents a lower risk. Additionally, smaller loan amounts mean smaller EMIs, making it easier to repay the loan on time and improve your creditworthiness.

  • Approach online lenders and NBFCs

Banks may have stringent eligibility criteria for personal loans, making it challenging for individuals with low credit scores. However, several online lenders and Non-Banking Financial Companies (NBFCs) offer more flexible lending options. These lenders often consider a broader range of factors beyond just credit scores, providing individuals with a low CIBIL score an opportunity to secure a personal loan.


A low CIBIL score need not be a roadblock to fulfilling your financial aspirations. By being proactive and implementing these five expert tips, you can enhance your personal loan approval chances even with a low or no credit history. So take charge of your financial situation, improve your credit score, and confidently approach lenders.

Related Articles

Leave a Reply

Back to top button