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How to Get a Personal Loan with a Low CIBIL Score?

Published on Jan 24, 2020Updated on May 20, 2024

How to Get a Personal Loan with a Low CIBIL Score?


A CIBIL score influences numerous aspects of your financial journey, from securing loans to negotiating favourable interest rates and even impacting employment opportunities. As such, comprehending the intricacies of your CIBIL score is paramount for making informed financial decisions and achieving long-term financial stability.

In this comprehensive guide, we delve deep into the nuances of the CIBIL Score, exploring its significance, the factors influencing it, and strategies for improving and maintaining a healthy score. Whether you're a seasoned borrower familiar with the intricacies of credit or a newcomer venturing into the world of finance, this guide aims to demystify the CIBIL Score and empower you to take control of your financial future. 

What is CIBIL score?

Your CIBIL score reflects your financial habits, indicating how well you handle debt given your income and liabilities. It's a number between 300 and 900 based on your repayment history, credit exposure, type and duration, and current credit lines. A lower score (300-500) suggests poor financial management and can result in loan application rejection. A higher score (750-900) presents you as a reliable borrower to lending institutions, increasing your chances of loan approval as they trust you to repay within the fixed tenure.

How is CIBIL Score Calculated?

A CIBIL score is calculated thus:

  • 30% weightage is for payment history. You must be paying your bills and EMI loan obligations in time.
  • 25% weightage is for credit exposure. Your credit utilization ratio must be less than 30%.
  • 25% weightage is for credit type and duration. You must not have numerous credit lines and must have maintained a mixed portfolio.
  • 20% weightage is for factors like credit report inquiries and number of credit lines taken simultaneously.

Your CIBIL report will contain your score, credit summary, financial status according to employment, personal and contact information, and credit history of inquiries. If you wish to generate your CIBIL score, you can log onto the official website and download your report after making a payment.

What are the Different CIBIL Score Ranges ?

The table below outlines the significance of various CIBIL score ranges and their corresponding likelihood of loan approval:



Approval Probability


Needs attention







Possible Approval






Very High

Ways to Get Personal Loan with Bad CIBIL Score

Even though it is a challenge, you can still get a personal loan with a poor credit rating by taking the measures listed below:

1. Show Evidence of Income to Support Loan Repayments

You may have a low credit rating but with a hike in salary or possibly having an additional income source can make the lender more favourable to your loan application. Moreover, if you can show evidence that you have a secure job with a steady income flow, the likelihood of your loan getting approved increases too. Do note that you may be subjected to a higher rate of interest.

2. Consider Applying for a Low Personal Loan Amount

Your lender may perceive you as a high-risk candidate if you ask for a high personal loan amount with a low CIBIL score. From the lender’s point of view, your probability of defaulting on the loan repayment is higher.

If the amount of the personal loan is lower, the lender may be more inclined to grant the loan request. Also, the repayment of a lower amount will be far easier.

3. Apply for a Joint Loan or Get a Guarantor

If you have a low CIBIL score, then getting a co-applicant or guarantor with a good credit rating can help you get the personal loan faster. With permission from your co-applicant or guarantor, ensure that the KYC formalities are completed along with the necessary signatures on the relevant forms.

When the lender sees a co-applicant or guarantor with a good CIBIL score on your loan application, it definitely helps towards getting a better deal.

4. Resolve Errors in Your Credit Report

You may be having a hard time getting a personal loan on a low CIBIL score. However, it is possible that there may be misreporting or errors on your credit report. In most cases, this happens because your record hasn’t been updated with the latest information.

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While it is not really your fault, mistakes such as these can cause unwanted issues. To get ahead of the issue, regularly check your CIBIL score. If you find any errors, ensure that you report them to the relevant authorities and resolve them quickly. Ultimately, it will also work favorably by raising your credit score making you a worthier candidate for a personal loan.

5. Request Your Lender to Consider Your Case with an NA or NH in Your Credit Report

An inactive credit period in the last 36 months or absence of a credit period during the same period of time is marked by an NA or NH on your credit report. This translates into you not having a credit score at all in your CIBIL report.

Speak to your prospective lender and explain why there is a period of credit inactivity. It is possible that the loan will be approved with a higher interest rate.

A lender would consider your credit history before giving you a personal loan. This is why a low CIBIL score could make it difficult to secure one. That said, personal loans for people with low CIBIL scores are available, and you can get one by following the steps below.

A personal loan can be a tremendous help when you need funds in a pinch. But before such a loan is sanctioned, you will have to go through various checks the lender performs. You can use the personal loan eligibility checker to get an estimate of the personal loan amount you are eligible for.

Among the first checkpoints that your application will have to cross is your credit or CIBIL score. But what is a good CIBIL score? And is a personal loan for people with low CIBIL score not available at all?

While it may not be as easy to get a personal loan with a low CIBIL score, you may succeed in getting one with some effort.

But first, let’s get an understanding of what a CIBIL score is and how it impacts your eligibility for a personal loan.

CIBIL Score and its Importance

Your CIBIL score is an indication of your creditworthiness. The Credit Information Bureau (India) Ltd., also referred to as CIBIL is one of the credit agencies authorized by the Reserve Bank of India (RBI) to calculate this score for an individual.

A valid CIBIL score falls in the range of 300 to 900, with 900 indicating most creditworthiness. The higher your score, higher is the chance that your personal loan application gets approved.

Your CIBIL score depends on your repayment record on your existing debts. Timely payments on all your outstanding debts like your credit cards, loan EMIs, etc. ensures that you have a high score. However, defaulting on loan repayment results in a score reduction. Personal loans for CIBIL defaulters are more likely to be rejected than for someone with a healthy credit history.

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A high CIBIL score of 750 or more makes you an ideal candidate for any type of loan. Conversely, a personal loan for a CIBIL score of 550 or less may lead to rejection or a higher interest rate as you may be considered a ‘high-risk’ borrower, depending on the lender’s policy.

The lender will also consider your capacity to repay the loan which is determined by not just your credit score, but also other factors like bank balance, and job security.

Personal Loan for CIBIL Score of 550

Getting a personal loan for CIBIL score of 550 is quite challenging, but not impossible. The rate of loan application rejection is higher, but if you have a stable income source and working with a reputed employer that offers job security, the lender might consider advancing you a loan at a higher interest rate. Please note that different lenders have different policies regarding this. At SMFG India Credit, the minimum CIBIL score for a personal loan is 750.

If you have defaulted on a loan in the past and cannot provide a justifiable reason for that, or the loan amount is higher, the lender can reject your personal loan application. If you have a score of 550 and need a personal loan, it is advisable to try to improve your CIBIL score to 750 first, before trying to apply with multiple institutions. Alternatively, you can ask a close family member with a good CIBIL score and stable income to be the primary applicant.

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Can I Get a Personal Loan without a CIBIL Score?

Getting a personal loan without a CIBIL score is not possible. As personal loans are unsecured forms of a loan, it is difficult for a lender to determine the risks associated with lending to a borrower with no credit score.

You either have the option to start creating your credit history, which is again a long due process, or you can consider the following options. Please note that even these options will be challenging since most lenders insist on a good credit score before accepting a loan application.

  1. Collateral Loan: You can opt for a loan by pledging your assets like saving certificates, gold, shares, and other valuables. It will also help you to start your credit journey and generate a credit report.
  2. Peer-to-Peer Lending: If you’re looking for a smaller amount, the P2P lending is ideal for you, but it usually comes with a high rate of interest.
  3. Using your Parent’s or Spouse’s Credit Score: If your parents or spouse have a good credit score, then you can raise a personal loan by adding your name to the personal loan application as a joint loan holder.
  4. Get a Credit Card: If you are salaried and have a bank account, you can approach your banker for a credit card. However, if you are not eligible for one, you can consider getting an overdraft facility using a fixed deposit as collateral. Alternatively, you can apply for a joint credit card with a family member who is eligible for one. Timely payments of credit card dues and responsible usage will help in building towards a good credit score.

Using the above options, you can get a personal loan without CIBIL and meet the urgent requirement of funds, but it adds to complexities and a tiresome process.

The most ideal way is to first create a credit profile or improve your CIBIL score, before applying for a new personal loan.

Eligibility for a Personal Loan with a Low CIBIL Score

Your CIBIL score is a significant part of personal loan eligibility. That said, other factors also play a key role in your loan application being approved.

  • Use a personal loan eligibility checker to get an assessment of the loan amount you can avail, and the EMIs that you can expect to pay.
  • Check your CIBIL score. This can be easily done online. A medium to good score increases the chances of a personal loan being sanctioned. With a low score, you may still be eligible to get a loan but at a significantly higher interest rate.

Your best bet of getting a personal loan for a low CIBIL score is to try with the NBFCs, because they have more flexible eligibility criteria when compared to banks. If you have defaulted on a loan in the past for genuine reasons, be sure to explain that to the lender. As long as the reason is justifiable – for example a medical emergency– lenders may consider offering you the personal loan at a lower interest rate.

How To Get An Urgent Loan With Low CIBIL In India?

Getting a personal loan with a low CIBIL score in India can be quite challenging. It may result in loan rejection or higher interest rates, as it indicates a higher credit risk. At SMFG India Credit, the minimum CIBIL score for a personal loan is 750. It is advisable to improve your CIBIL score to 750 first, before seeking a loan from any financial institute. In emergency situations, you can ask a close family member who has a stable income and good CIBIL score to be the primary applicant.

Importance of CIBIL Score for Personal Loans

Your credit history is pivotal in determining your CIBIL score, which is calculated using CIBIL's algorithm. Key factors include how you've managed credit obligations like loans and credit card payments in the past. The significance of the CIBIL score lies in its ability to guide lenders in offering credit only to individuals with a favourable credit history. Lending to those with a good credit score minimizes the risk of default, as it suggests responsible credit management.

This approach enables lenders to mitigate credit risk, contrasting with the higher risk associated with extending credit to individuals with poor credit histories, who may struggle to repay loans promptly. 

Thus, the CIBIL score acts as a crucial tool in ensuring responsible lending practices and maintaining financial stability for both borrowers and lenders.

What are the Factors that Affect your CIBIL score?

Several factors contribute to your credit score, the most significant being your credit repayment history. 

Consistent and timely payments of installments positively impact your score, showcasing your reliability in meeting financial obligations. 

Additionally, maintaining a low credit utilization ratio, ideally below 30%, is crucial for a healthy credit score. 

Regularly reviewing your credit report is essential to identify and rectify any errors that may adversely affect your score, such as incorrect default listings or inaccurately reported loans. 

Furthermore, the age of your credit accounts plays a significant role in determining your creditworthiness. Lenders often prefer individuals with longer credit histories, as it reflects stability and responsible credit management. 

Therefore, it's advisable to establish credit accounts early and maintain them responsibly to ensure a favourable credit score, which enhances your chances of accessing credit facilities at favourable terms in the future.

Minimum CIBIL Score Required to get Personal Loan

A CIBIL score ranging from 720 to 750 is considered creditworthy, meeting the minimum requirement for a personal loan. With this score, lenders are more likely to swiftly approve your loan application, offering the desired loan amount with favourable interest rates. This range indicates responsible credit behaviour and financial management, assuring lenders of your ability to repay the loan on time. As a result, borrowers with CIBIL scores within this range have increased access to loan facilities and may benefit from competitive loan terms and conditions. 

It's essential to maintain or improve your credit score within this range to enhance your eligibility for various credit products and secure favourable borrowing opportunities in the future.

What is the Impact of Credit Score on a Personal Loan

Credit scores play a pivotal role in the approval process for personal loans, serving as a crucial indicator of an individual's creditworthiness. Lenders rely on credit scores to assess the likelihood of borrowers repaying their loans on time and in full. A high credit score signifies responsible financial behaviour, including timely bill payments, low credit utilization, and a stable credit history, instilling confidence in lenders regarding the borrower's ability to manage debt. Consequently, borrowers with excellent credit scores are more likely to qualify for personal loans and are often offered more favourable loan terms, such as lower interest rates and higher loan amounts. Conversely, individuals with lower credit scores may encounter challenges in securing loan approval or may be subjected to less favourable terms, including higher interest rates and stricter repayment conditions. 

Thus, maintaining a strong credit score is essential for accessing affordable personal loan options and optimizing one's financial opportunities.

How to Save Your CIBIL Score from Going Down

  • To improve your credit score, focus on the timely payment of existing debts, including credit card bills and loan EMIs, to establish a positive payment history. 
  • Additionally, maintain a low credit utilization ratio by utilizing only a small portion of your available credit limit. 
  • Avoid excessive credit applications to prevent unnecessary inquiries that can lower your score. 
  • Regularly monitor your credit report for errors or discrepancies and address them promptly. 

By taking these steps, you can gradually improve your credit score and enhance your overall creditworthiness, making it easier to qualify for loans and access better terms and rates in the future.


While these measures can certainly help you get the personal loan even with a bad credit score, you still need adequate funds to repay it on time. If you default on the loan, your CIBIL score will plummet further down.

Alternatively, if you are having trouble getting a personal loan, you can also consider a loan against property.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us


Can I get a loan with a 500 CIBIL score?

Getting a loan on a CIBIL score of only 500 is extremely difficult especially with lending institutions like SMFG India Credit. This is because a poor score reflects inability to repay the loan amount in time, and hence, a high risk factor. Ensure that you work on increasing this score before applying.

What are the 5 easy steps to get a personal loan?

To get a personal loan, you can follow these steps:

  1. Check your eligibility criteria according to the online calculator.
  2. Collect all documents required according to your employment type.
  3. Apply online with accurate professional and financial information.
  4. Wait for the loan approval 
  5. Funds will be transferred to your account within 30 minutes* of loan approval.

Can I get a loan with a 550 CIBIL score?

550 is too low a CIBIL score for getting a personal loan. You must ensure that you have a CIBIL score of at least 750. At such a low score, you must begin paying your bills on time and reducing your credit utilization ratio to less than 30%. This way, your score will increase and you may get a loan.

How can I increase my CIBIL score by 5 points?

You can increase your CIBIL score by:

  1. Never missing another bill or EMI payment
  2. Ensuring that you use less than 30% of the credit limit
  3. Requesting for a higher credit limit
  4. Not taking on more debt than you can pay
  5. Be prudent while applying for more credit cards

Is 450 CIBIL score good?

No, a CIBIL score of 450 is considered extremely low. The chances of your loan application being rejected are very high at this score. Reputed lenders such as SMFG India Credit require a CIBIL score of at least 750 to consider your loan application.

Is 540 a good CIBIL score?

A CIBIL score of 540 is not considered good as it is below the minimum benchmark of 750. It indicates poor financial management skills, including lack of discipline in repaying bills and EMIs, and an inability to manage debt responsibly, potentially taking on more debt than one can afford to repay on time.

Can I get a personal loan with a 545 credit score?

It is very difficult to get a personal loan with a credit score of only 545 since the minimum threshold is 750. You can try to increase your score by making timely payments and lowering your credit utilization ratio to less than 30%.

How to get an instant loan with a low CIBIL score?

Acquiring a personal loan in India with a low CIBIL score can be a difficult task, as it may lead to loan rejection or higher interest rates due to the perceived higher credit risk. At SMFG India Credit, a personal loan requires a minimum CIBIL score of 750, thus it is recommended to improve one's score before applying for a loan from any financial institution. In urgent circumstances, it may be possible to have a close family member with a stable income and good CIBIL score act as the primary applicant.

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