What is a Low Credit Score?
A credit score is a figure that reflects your creditworthiness. It typically falls between 300 and 850.
Excellent: 750–850
Good: 700–749
Fair: 650–699
Poor/Low: 300–649If your score is under 650, it’s typically low.
✅ Can You Get a Personal Loan with a Low Credit Score?
Yes, you can, but:
Interest rates will be greater
Loan amounts will be lower
Collateral or a co-signer may be required by lenders
You might need to demonstrate income or stability???? Step-by-Step Guide: How to Get a Personal Loan with a Low Credit Score
- Check Your Credit Report Obtain your free credit report from CIBIL, Experian, or Equifax.
Check for mistakes or outdated information that may damage your score.
Correct any mistakes prior to applying.- Know Your Finances Compute your income and monthly expenses. Decide how much EMI (Equated Monthly Installment) you can manage. This will assist you in determining the loan amount and tenure.
- Shop Around
Some of the following are available for bad credit:
NBFCs (Non-Banking Financial Companies)
Private lenders
Fintech apps (such as KreditBee, MoneyTap, EarlySalary)
Peer-to-peer lending platforms
Credit unions (in certain countries)Check:
Interest rates
Processing fees
Repayment terms
Eligibility requirements- Apply with a Guarantor or Co-signer
If a person with good credit co-signs your loan:
You're more likely to be approved
You may receive a lower interest rate
But the co-signer is also liable if you default on payments- Provide Collateral (Secured Loan)
If unsecured loan is not feasible, provide:
Gold
Fixed depositsProperty documents
Cars
This provides lenders with security and raises chances of approval.
- Demonstrate Steady Income
Lenders are more interested in repayment potential than in credit score.
Display salary vouchers, bank accounts, or IT returns
A steady occupation or enterprise enhances credibility- Begin Small
Apply for a low loan amount initially. After making payments on time:
Your credit score increasesYou’ll qualify for better terms next time
???? Interest Rates for Low Credit Score Loans
Loan Type Approx. Interest Rate
NBFC Personal Loan 18% – 36%
Payday Loan 30% – 50%+
Secured Loan (Gold/FD) 9% – 14%
Peer-to-Peer Lending 15% – 30%
Rates vary by lender and individual profile
⚠️ Red Flags: What to Avoid
Loan sharks or unlicensed lenders
Hidden charges and feesLoans with no paperwork or too-good-to-be-true offers
Giving original documents upfront before verification
????️ How to Increase Loan Approval Chances
Pay off small debts to lower your debt-to-income ratio
Don't apply to multiple lenders at the same time (damages your credit score)
Keep EMIs below 30–40% of your monthly incomeUse a pre-qualified loan offer, if available
???? How to Improve Your Credit Score Over Time
Pay EMIs and credit card bills on time
Don’t max out credit cards (keep usage below 30%)
Avoid too many new credit applications
Build a credit history using small secured cards or credit-builder loansKeep checking your credit report
???? Documents Required
PAN card
Aadhaar card or other identification proof
Address proof
Proof of income (salary slips, ITR)
Bank statements
Passport photo???? Top Apps and Lenders for Low Credit Score (India)
Lender/App Loan Range Credit Score Required Notes
KreditBee ₹1,000 – ₹2L 600+ Fast, suitable for short term
MoneyTap
₹3,000 – ₹5L
650+
Line of credit option
CASHe
₹7,000 – ₹4L
No strict CIBIL
AI-based approvals
PaySense
₹5,000 – ₹5L
600+
Flexible tenure
mPokket (for students)
₹500 – ₹30,000
Low/no score
Only for students and new earners
???? Example: EMI Calculation
Suppose:
Loan Amount: ₹1,00,000
Interest Rate: 24% per annum
Tenure: 2 yearsYour EMI will be around ₹5,300 per month.
Try different scenarios using online EMI calculators.
???? Summary
Step
Action
Check Credit Report
Fix errors if any
Choose Right Lender\tOpt for NBFCs, apps, or P2P platforms
Improve Eligibility\tInclude co-signer, display income, provide collateral
Apply Strategically\tLow amount, moderate tenure
Repay Timely\tIncreases credit score for future loans