Guide on How to Get Loan with Bad CIBIL Score

If you happen to be one of those people who want a loan but got turned down by banks for reasons like a bad CIBIL score, low creditworthiness and other similar reasons? Well, this article is for you, as we are going to explain 5 easy and proven ways on how to get a loan with bad CIBIL score. So, read till the end so that you can plan your financial strategy accordingly.

What is a CIBIL Score?

Before we begin with the methods, let us understand what a CIBIL score actually is:

• It is a number between 300 to 900.
• Credit agencies assign a CIBIL score to you based on your past loans, credit card usage and most importantly, your repayment history.
• Basically, it reflects your financial behaviour. If you have paid your debts on time, you will have a good CIBIL score, and if you miss your repayments, then you will have a bad CIBIL score.

The following table shows CIBIL scores and their importance:

You can check your CIBIL score for free on the official CIBIL site.

Can You Get a Loan with a Bad CIBIL Score?

And the answer is Yes. But expect rejections from banks if your score is too low (below 600). Now, do not lose hope. Nowadays, some lenders not just look at your CIBIL score, they look at other factors too, like:

• Income
• Job Stability
• Type of Loan
• Loan Amount

We will explain this with an example in this guide later.

5 Proven Ways to Get Loan With Bad CIBIL Score

Now, since we know that getting a loan with a bad CIBIL score is possible, the methods of getting the loan are mentioned below:

1. Explore NBFC Offers

• Non-Banking Financial Companies (NBFCs) are private lenders.
• They are more flexible than banks, as their eligibility criteria are usually relaxed.
• They provide loans to people who have low credit scores.
• Since the risk is higher, they have higher interest rates.

The reason why NBFCs are lenient when it comes to sanctioning loans to people with low CIBIL score is because they use other methods to check creditworthiness, like your job stability, monthly income, expenditure pattern and your past financial footprints. The following are some of the popular NBFCs that can provide you with loans with bad CIBIL score:

We recommend that you visit InvestKraft and compare all lenders as per your application. All you need to do is fill out a simple form, and you can get your loan approved in a short time with the best terms.

2. Team Up with a Co-Applicant

• If your CIBIL is low, apply with someone who has a good credit score.
• It could be your spouse, parent, or sibling. This person becomes your co-applicant.
• The lender checks both the scores and the incomes of the applicant (you) and your co-applicant.
• If the co-applicant has a better credit history, the loan is more likely to get approved.
• Please note that the co-applicant is equally responsible for paying the loan.

Let us understand this with an example:

Let us say your CIBIL score is 580. Your wife has a score of 760. When you apply together, the lender may consider your wife's good score and approve the loan. Now, you are both responsible for the loan. If you miss repayments, it will affect both your scores.

3. Highlight Job Stability

• A steady job with a regular income gives confidence to lenders. Even if your CIBIL is bad, your stable job can work in your favour.
• Banks and NBFCs consider a job stable when you have worked in the same organisation for more than 2 years.
• You need to submit proof of regular income like salary slips, Form 16, and bank statements.
• If you work with a reputable company, mention it clearly and boldly, as it increases lenders’ confidence.

For example, a person working at Infosys or Wipro with a steady income and 3 years of experience can still get a loan with a low CIBIL score as compared to a person with no fixed income.

4. Opt For Secured Loans

• Secured loans are loans where you give something valuable as security. It could be gold, a fixed deposit, or your property.
• Lenders do not worry much about your credit score when they have something to recover the money.
• That is why secured loans are easier to get. Also, the interest rates are comparatively lower than unsecured loans.

The following are some of the secured loans you can apply for:

For example, if you have a gold chain worth INR 1 lakh, you can get a gold loan of about INR 75,000 - INR 80,000 quickly, even with a low credit score.

5. Add a Guarantor

• A guarantor is someone who promises to repay the loan if you cannot. This person is different from a co-applicant.
• They are not part of the loan application but act as a backup for the lender.
• Please note that the guarantor’s credit score will be affected if you miss payments. So choose someone who trusts you.

Important Tips to Increase Your Loan Approval Chances

The following are some of the important tips you should consider to improve your CIBIL score and loan approval chances:

• Pay EMIs on time: Even if your score is low, regular payments show you are trying to improve, and it will also increase your CIBIL score.
• Avoid applying for too many loans: Each rejection affects your score further. So, give some time between applications.
• Check your CIBIL report for mistakes: Sometimes, the score is low due to incorrect information. Also, please note that checking your CIBIL score (soft-check) does not affect your CIBIL score.

Real Life Example: How InvestKraft Helped Riya

Riya is a marketing executive from Pune. A few years ago, she missed some of her loan EMIs due to a medical emergency in her family. This dropped her CIBIL score to below 600. Recently, she needed a loan of INR 1,00,000 to handle some urgent personal expenses.

She applied at a few banks, but her application was rejected because of her poor credit history. However, Riya has a stable job and earns a salary of INR 35,000 per month. She has been working with the same company for the past 3 years.

On a friend’s suggestion, Riya downloaded the InvestKraft App. She submitted her basic documents and income proof on the platform. InvestKraft matched her profile with lenders who consider job stability and income more than just the CIBIL score.

Within 2 days, her loan was approved through an NBFC listed on InvestKraft. The money was credited to her account without any hassle.

So, even if your credit score is not strong, you still have a chance, especially if you have a steady income and use the right platform.

Conclusion

By now, you must be clear on how to get loan with bad CIBIL score. Explore NBFCs, apply with a co-applicant, show job stability, go for a secured loan, or add a guarantor. Always stay honest with lenders. Show them that you have the capacity to repay, and you will be sincere in your repayments. Over time, work on improving your credit score too by paying your EMIs or credit card bills on time. For the best terms, faster processing and personalised services, visit InvestKraft and get your loan in a short time. Apart from this, you have all banking, financial services and insurance services on InvestKraft.

Frequently Asked Questions

Can I get a loan with bad CIBIL?

Yes, NBFCs, secured loans, and co-applicants can help you get a loan even with a low CIBIL score.

How fast can I fix my CIBIL?

If you clear your dues and repay your EMIs and credit card bills on time, then within 6-12 months, your CIBIL will improve.

Can I get a loan with a CIBIL score below 600?

Yes, many NBFCs and platforms like InvestKraft offer loans even if your score is below 600.

Will applying for loans reduce my CIBIL score?

Yes, multiple loan applications can lower your score due to repeated hard inquiries.

What loan is easiest to get with a bad credit score?

Secured loans like gold loans or loans against FD are easier to get with poor credit.

Can I improve my CIBIL score while repaying a loan?

Yes, timely EMI payments help rebuild and improve your credit score over time.

Author: Diwakar Kumar Singh

Diwakar Kumar Singh is an accomplished content creator with over 6 years of experience in crafting both long-form and short-form content. A gold medalist in MBA (Marketing) from IMT and a qualified petroleum engineer, Diwakar brings a results-driven mindset to his work. His passion for writing enables him to produce compelling and engaging content that resonates with diverse audiences.

 

LinkedIn: https://www.linkedin.com/in/dksinghone992

 

Diwakar Kumar Singh is an accomplished content creator with over 6 years of experience in crafting both long-form and short-form content.