Struggling with a Bad CIBIL Score to Get a Loan? Check Out These Options

Finding it difficult to get a personal loan because of a bad CIBIL score? Do not stress—options still exist! 

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While traditional banks might hesitate, alternative lenders, fintech platforms and secured loans can help you get the funds you need. 

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Moreover, with the right strategy, you can start rebuilding your credit score for better financial opportunities in the future.

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Let us dive into this blog to learn the best ways to get a personal loan with low CIBIL score and how you can boost your creditworthiness over time!

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8 Ways to Get Personal Loans With Bad CIBIL Score

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Here is how you can get a personal loan for bad CIBIL score:

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1. Get a Secured Personal Loan 

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If your credit score is low, a secured loan can be your best bet. Unlike unsecured loans, these loans do not rely on your creditworthiness but instead require collateral. 

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By pledging assets like gold, fixed deposits, property, mutual funds, insurance, or PPF, you can assure the lender of repayment security. 

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Since the lender can recover their money by liquidating the asset if needed, they are more likely to approve your loan. 

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However, remember that each lender has specific guidelines regarding the loan amount and tenure based on the type of asset you pledge.

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2. Explore Peer-to-Peer Lending for Flexible Loan Terms

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Peer-to-peer (P2P) lending platforms connect borrowers directly with individual lenders. You can secure a loan of up to ₹5 lakh without dealing with banks.

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Do you know what is the best part? The interest rate and tenure are decided through mutual agreement between you and the lender, making this a flexible and borrower-friendly option. 

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Additionally, since these platforms are regulated by the RBI, your financial security is ensured.

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3. Leverage Your Relationship with Your Current Lender

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If you have an existing banking relationship, it can work in your favour. Many banks and financial institutions offer customised personal loan options for existing customers, even if their credit score is not great. 

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By maintaining a salary account and receiving regular deposits, your bank may be willing to offer you a loan with special terms. 

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It is always worth asking about the possibility of a bad CIBIL loan through your current bank, as they may be more flexible with your application.

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4. Get a Loan from NBFCs—A More Lenient Option

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While banks often reject applications based on low credit scores, Non-Banking Financial Companies (NBFCs) are much more flexible. 

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Many NBFCs approve loans for individuals with credit scores below 700, provided they have a steady income. 

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However, you must prepare yourself to pay slightly higher interest rates in comparison to traditional bank loans. If you can show a stable job history and regular earnings, your chances of approval are high.

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5. Try Fintech Lenders

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Fintech companies are revolutionising the lending space with instant loans that do not require a perfect credit score. 

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These digital lenders operate through mobile apps and websites, offering quick approvals and minimal paperwork. 

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If you need fast cash without the hassle, apps like the Jar app can help you get funds in minutes. Since the entire process is online, it is one of the easiest ways to borrow money when banks say no.

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6. Take Help of a Guarantor

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If you have a low CIBIL score or need an instant loan without CIBIL verification, bringing a guarantor can improve your chances of approval. A guarantor assures the lender that the loan will be repaid, regardless of your financial situation. 

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Banks and NBFCs consider this added security, making them more willing to sanction the loan. 

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However, your repayment behaviour directly affects the guarantor’s credit score. If you default, their credit profile takes a hit. So, before opting for a low CIBIL score personal loan with a guarantor, ensure you can manage repayments responsibly.

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7. Apply for a Payday Loan

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A payday loan is a short-term, quick cash solution designed for salaried employees. If you need funds to manage expenses before your next paycheck, this could be a good option. 

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The loan amount is usually smaller than your monthly salary, making it ideal for covering rent, utility bills, or other emergency expenses. However, if you require a large loan, this might not be the right choice.

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8. Use an Overdraft Facility on Your Bank Account

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Need emergency cash without applying for a separate loan? If you have a current or salary account, check whether your bank offers an overdraft facility. 

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This feature allows you to withdraw more than your available balance, helping you cover urgent expenses. While overdraft limits vary from bank to bank, they can be a lifesaver when you need funds instantly.

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How to Improve CIBIL Score to Get a Personal Loan?

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Getting a low CIBIL personal loan can be tricky, but the right approach can turn things around. 

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A strong credit score helps you secure loans on favourable terms. Here is how you can improve your creditworthiness and increase your chances of approval:

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Check Your Credit Report

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Get a copy of your credit report and scan it for errors. Even minor mistakes can hurt your score. Use Jar's credit score checker tool and get your credit report instantly.

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Pay On Time

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Timely payments of credit card bills, EMIs and other dues have the biggest impact on your credit score. Set reminders or automate payments to never miss a due date.

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Keep Credit Utilisation in Check 

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Try to use less than 30% of your credit card limit. Maxing out your cards frequently can lower your score and make lenders hesitant.

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Monitor Your Score Regularly 

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Stay on top of your credit score and report. If you spot any discrepancies, get them corrected immediately.

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Avoid Too Many Loan Applications 

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Every time you apply for credit, it leaves a mark on your report. Too many enquiries can signal financial distress, so apply only when necessary.

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Maintain a Healthy Credit Mix 

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A blend of secured (home or car loan) and unsecured (personal loans or credit cards) credit can positively impact your score. A balanced credit profile shows responsible financial behaviour.

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Keep Old Accounts Active 

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Your old credit accounts contribute positively to your credit history. Closing them can shorten your credit age, which might reduce your score.

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Settle Past Dues Properly 

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If you have settled previous loans or credit card bills, ensure they reflect correctly in your credit report. Inaccurate records can impact your score.

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The Bottom Line

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Getting a personal loan with low CIBIL score is possible if you explore the right options. Secured loans, NBFCs, P2P platforms, and fintech lenders like Jar offer flexible borrowing solutions even with a poor credit history. 

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However, improving your CIBIL score should be a priority to access better financial opportunities in the future. 

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Frequently Asked Questions

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1. Who is eligible for a personal loan with bad credit?

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Individuals with a credit score below 700 can apply for bad credit personal loans. Those without a credit history, such as first-time borrowers, are also eligible to apply.

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2. How do I apply for a loan with a bad CIBIL?

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You can reach out to your current lender, an NBFC, peer-to-peer lending platforms, or digital fintech services to apply for a loan with a bad CIBIL. The approval process depends on the lender and loan type.

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3. Is it possible to get a loan with a 600 credit score?

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Yes, you can get a loan with a credit score of 600 but the interest rates and terms might not be as favourable as those offered to individuals with higher scores.