How to Get an Instant Loan with a Low CIBIL Score

Instant personal loans are quick-access credit products that require no collateral, making them a convenient solution for urgent financial needs. Since they are unsecured, lenders rely heavily on the borrower’s creditworthiness to assess risk. This is where your CIBIL score becomes crucial. A low score suggests a history of missed payments or defaults, which can reduce your chances of approval. That being said, funding is still possible. Some banks and NBFCs extend personal loans to individuals with poor credit scores, although usually at higher interest rates or with stricter eligibility criteria.

• NBFCs and fintech lenders offer instant loan options for low CIBIL scores

• Add a co-applicant or guarantor with good credit to improve approval chances

• Apply for a smaller loan amount to reduce lender risk and boost approval

• Negotiate with your bank, as they know your financial history

• Secured loans like gold or property-backed loans offer better approval odds and rates

• Loans are possible with scores as low as 500, but terms may be stricter

• A CIBIL score of 750 is considered ideal for quicker approvals and favourable terms

Although it may appear challenging, you can secure an instant loan with a low CIBIL score if you follow the right strategy. Approach NBFCs and online lenders. They specialise in offering credit to individuals with poor credit histories.

To improve your chances of approval, consider enhancing your application by including a co-applicant or guarantor. Highlight additional sources of income to demonstrate your ability to repay. You can also consider secured loan options by pledging collateral such as gold or property.

The CIBIL score is a three-digit number ranging from 300 to 900, reflecting an applicant’s creditworthiness. For instant personal loans, most lenders prefer a score of 750 or higher. This indicates a strong credit history and reliable repayment behaviour. A score above 750 is considered excellent for loan approval. 

Scores between 700 and 749 may still qualify but often come with stricter terms. Scores below 700 generally lead to higher interest rates or greater difficulty in obtaining approval.

Follow a planned approach before applying for an instant loan with a low CIBIL score. The strategies below may help:

• Get a Loan from a Non-Banking Financial Company (NBFC)

NBFCs and fintech lenders usually accept lower credit scores than regular banks. They also assess factors like income and repayment capacity. This makes it easier to get approval with a low CIBIL score.

• Get a Guarantor On-board

A guarantor can assist in securing a loan despite a low credit score. The guarantor promises to repay the loan if you default. This gives the lender extra assurance and improves your chances of approval.

• Apply for a Smaller Loan for Instant Approval

Applying for a lower loan amount can improve the likelihood of approval when the credit score is low. For example, when a loan of ₹1 Lakh is rejected, applying for ₹50,000 may lead to approval. Lenders tend to approve smaller amounts based on repayment capacity.

• Negotiate with Your Existing Bank

Approach the current bank to apply for a personal loan. Banks may evaluate the application based on the existing relationship and account history, even with a low credit score. This familiarity can influence approval positively.

• Secure a Loan with a Co-applicant

Adding a co-applicant with a strong credit score can increase the chances of approval. The co-applicant’s creditworthiness gives the lender added reassurance. It also improves your overall loan eligibility.

• Opt for a Secured Loan

These loans are an additional option for obtaining an instant loan with a low credit score. Choose a secured loan option by pledging collateral such as property or financial assets. This lowers the lender’s risk and makes approval more likely. 

Secured loans also often come with better interest rates, even with a low credit score. 

Work with a reputable lender that supports credit rebuilding. A structured loan product can offer easier access to credit despite a low score. Timely repayments on such a loan can gradually help improve your overall credit history.