How to Get Loans with a Low Credit Score
Getting a loan in India can be challenging when your credit score is below average. A low credit score loan often feels out of reach, especially if your CIBIL score is below 600. Traditional banks may hesitate to approve your application, but the good news is that options still exist. With the right strategy and knowledge of alternative lenders, you can secure funding even with a poor credit history.
In this blog, we’ll break down how to approach low credit score loans, what lenders look for, and how you can improve your chances of approval. We’ll also explore how platforms like GoodScore can help you stay on top of your credit report, suggest smart credit payment add tips, and guide you to the right lender match.
If you’ve ever wondered how to get a loan when your credit score isn’t ideal, this guide is for you. Let’s explore the best ways to get a low credit score loan in India.
Top Options for Loans with Bad Credit in India
Many people assume that bad credit shuts the door on all borrowing opportunities. While it limits some conventional avenues, there are still reliable loan options with a low CIBIL score that are worth exploring.
1. Explore Pre-approved Loans in India
Some banks and NBFCs offer pre-approved loans in India, especially to existing customers, even if they have a less-than-perfect credit score.
Why pre-approved loans work:
- Based on the banking relationship, not just the CIBIL score.
- Faster disbursal and minimal paperwork.
- May be available via SMS or mobile apps.
Tip: Check your eligibility through your net banking app or consult your relationship manager.
2. Consider NBFCs and Fintech Lenders
Traditional banks may have rigid policies, but NBFCs (Non-Banking Financial Companies) and digital lenders are more flexible when it comes to loans with bad credit in India.
Key benefits:
- Focus on income and repayment capacity, not just credit score.
- Quicker loan approval and disbursal.
- Some offer credit builder loans to help rebuild your score.
Examples: GoodScore, KreditBee, EarlySalary, CASHe, and MoneyTap.
3. Apply for Secured Loans
Secured loans offer one of the best chances to get approved when your credit is weak.
Common secured loan types:
- Gold loans: Use your gold as collateral.
- Loan against FD or property: Lenders feel safer and may ignore a poor credit history.
These loans offer better terms, even with a low credit score.
4. Add a Co-Applicant or Guarantor
A trusted co-applicant or guarantor with a high credit score can significantly improve loan approval chances.
How it helps:
- Their strong credit profile offsets your weak one.
- Increases lender confidence.
- Can result in better interest rates.
Ensure the guarantor understands the repayment responsibilities before signing.
5. Show Stable Income and Employment
Even if your credit score is low, a stable income and employment history can make you a more trustworthy borrower.
Documents that help:
- Salary slips for the last 3–6 months
- ITR returns for self-employed individuals
- Bank statements showing regular pay loan EMI or bill payment add
Present yourself as financially reliable despite your past credit history.
Simple Tips to Improve Loan Approval with a Low CIBIL Score
Getting a low credit score loan is not just about applying randomly. These smart steps can help position you better in front of lenders.
1. Check Your Credit Report for Errors
Sometimes your credit report on GoodScore may have incorrect entries affecting your score. Fixing them can give you a quick boost.
What to look for:
- Closed loans showing as open
- Incorrect payment delays
- Accounts not belonging to you
Use GoodScore’s free credit health check to monitor and dispute inaccuracies.
2. Avoid Multiple Loan Applications
Submitting too many applications in a short time triggers multiple hard inquiries, further lowering your score.
Better approach:
- Research and shortlist suitable lenders first.
- Use GoodScore or lender websites to check pre-approval eligibility without impacting your score.
3. Start with Small Loan Amounts
Lenders are more likely to approve smaller loans for people with low credit scores. Repaying them responsibly builds your score over time.
Conclusion
While it may seem difficult at first, getting a low credit score loan is not impossible. From secured options to pre-approved loans and fintech lenders, there are ways to access funds even with a poor credit history. The key lies in preparing well—understanding your report, limiting unnecessary credit inquiries, and showcasing your repayment capacity.
Want to increase your loan eligibility? Start by downloading your credit report on GoodScore app and take control of your credit health today.
FAQs
1. Can I get pre-approved for a loan with a low credit score in India?
A: Yes, some banks and NBFCs offer pre-approved loans to existing customers based on their transaction history, even with a low credit score. Check your bank’s app or website for offers.
2. How do I get a loan if my credit score is below 600 in India?
A: You can opt for secured loans, approach NBFCs or digital lenders, or add a co-applicant. Demonstrating stable income and checking your credit report for errors can also improve your chances.
3. What are the chances of getting a loan with a low CIBIL score in India?
A: While chances with banks are low, fintech platforms, NBFCs, and secured loan options are more flexible. Improving loan approval chances involves good income, stable employment, and fewer loan inquiries.
4. Which banks in India offer loans to people with low credit scores?
A: Public sector banks like Canara Bank or Indian Bank may offer secured loans. However, NBFCs like Bajaj Finserv or fintech platforms such as CASHe and KreditBee are more accommodating to borrowers with low credit scores.
5. Can I still qualify for a home loan with a poor credit score in India?
Yes, but it may require a higher down payment, a guarantor, or opting for a loan against property. It’s also advisable to fix credit report errors and improve your score gradually with credit payment adds.
