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A Step by Step Guide to Apply for a Personal Loan for Low CIBIL Score

A personal loan is an unsecured loan that can be availed to address emergency financial situations. However, to get this type of loan, one needs to have a good credit score. A good credit score is an ideal determinant of your credit behaviour and helps lenders assess your credit eligibility. Since personal loans are unsecured, lenders evaluate if the lending loan to you would be a risky move or not based on which the loan application is approved or rejected. While it is a general notion that lenders in India do not offer personal loan to individuals with low credit score, the truth is you can get the loan amount even with a low CIBIL score. Read on to know how you can apply for a personal loan 

What is a CIBIL Score?

CIBIL Score is a three-digit numeric summary of your credit behaviour. The score ranges from 300-900 with 300 being the lowest and 900 the highest. A high score reflects responsible credit behaviour and is one of the factors that have a major impact on the loan amount and the interest rate offered. The score is generated based on the loan and credit card data provided by banks and various other credit institutions. The score plays an important role in helping lenders understand your repayment capacity and creditworthy behaviour.

Tips to get a personal loan for low CIBIL Score individuals

Having a low CIBIL Score doesn’t generally mean that credit institutions in India would not offer you any loan. You can use the below techniques to be able to get a personal loan with low CIBIL Score.

Apply for the loan with a relative or spouse as co-borrower: If you do not have a good credit score, then you can apply for a loan with your spouse or relative as a co-borrower of the loan. The high score of the co-borrower along with your combined income works in your favour, thus making it easy for you to get the loan.

Ensure that your income can support EMI payments: Even if you have a low credit score and have a high income then a lender may consider is likely to approve your personal loan application. If you have received a raise in your salary, get a bonus or have an additional source of income then the lender will consider your application despite having a low score. However, you may be asked to pay a high-interest rate to get a loan with a low CIBIL score.

Apply with a guarantor: Having a guarantor gives the lender a sense of surety towards loan repayment as in case you make the default; the guarantor would be responsible towards repayment of the loan. It is essential to keep a person with a good credit score as the guarantor as his strong backing can help you get a high loan amount.

Collateral loan: If you are unable to secure a personal loan based on your credit eligibility then you can look to pledge your assets to be able to get the loan. The assets against which you can get a loan are mutual funds, insurance policies, jewellery, land, fixed deposits and others. Secured a secured loan is easy as in case of default the lender has the rights to sell off the assets to cover the loan amount.

Inquire about tie-ups between your employer and lenders: Many lenders offer special corporate loan programs that make it easy for employees of the company to get loans. If you work for a corporate and if your company has tied up with a lender then it becomes simple for you to get a high loan amount at a low-interest rate. 

Factors that affect your CIBIL Score

Unsecured borrowing: Holding too much of unsecured credit i.e. credit card or personal loan debt can lead to a decline in your CIBIL score.

Not paying loan instalments on time: Your credit rating will suffer if you fail to make your EMI payments on time.

Utilizing high credit card limit: If you are often utilizing more than 50% of your credit card limit, then your score is likely to get impacted.

Not paying the credit card bills in full: If you fail to clear the full credit card bill each month and the only option to pay the minimum balance amount then doing so can hurt your score.

Settling credit card debts: If you have settled credit card debts i.e. closed a credit card by arriving at a settlement with the bank, then your credit card can take a drastic dip and further, affect your loan application.


Applying for an instant loan without CIBIL is easy if you apply with the right lender. You can apply for a personal loan with Upwards as the app offers instant personal loans at low-interest rates to individuals having low CIBIL score or no credit history.

I am Pravesh Maurya as a blogger and expert Content marketer also providing Paid and free guest posting services at affordable price. I am owner of and
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