Personal Loan

How Can I Get Personal Loan With Less Than 500 CIBIL Score?


If you need a private loan, you must contact a bank with your needs. The lender, in contrast, will need to assess your client’s solvency. Your capacity to settle the personal loan promptly is referred to as creditworthiness. The bank will also review your past credit history, which includes your track record of managing previous and current debts.

What exactly is the Credit Score?

The credit score is the widely accepted sign of your fiscal status. It’s a numerical analysis of your financial status. It provides lenders with specific factors for judging how you handled previous loans and if you would be able to repay your debt if approved in the future.

Credit scores vary from 300 to 850. A credit score of 700 or more is rated excellent. A credit score of 400-500 is deemed poor. If your credit rating is between 600 and 700, you may apply for a personal loan.

Factors affecting your Credit Score

The following are the most likely causes of a poor credit score:

  • When you have several personal loans, it may take a lot of work to repay them all on time. This may harm your credit rating.
  • If you’ve skipped a loan payment, this might be seen as a failure to arrange your money properly. This will reduce your credit score and make future loan requests tougher.
  • The credit usage ratio has a vital impact on your credit score. Your credit score suffers if your buying habits regularly exceed the credit card’s maximum limit. You will be seen as a careless spender who lacks money-handling skills.
  • Failure to fulfil your credit card payments on time will have a bad effect on your credit score, the same as failure to make EMIs on other loans.
  • You are misled if you feel you can keep a decent credit score by skipping credit cards entirely. You possess no credit history because you don’t have a credit card. Hence your credit score is zero.
  • If your personal loan request is rejected more than one time, you may be urged to apply to get the same loan with newer lenders. If you make this a habit, it will hurt your credit score. This is because repeat denial is negative for your credit rating, and every time your potential lender seeks your credit data, your credit score will suffer as a result.

This begs the issue of why a lender would reject your personal loan when you have a poor credit score. This is a vital matter. Banks don’t want bad loans on their balance sheets. If they give loans to clients with bad credit, there is a danger they may default. This is harmful to banks as they stand to lose money as a result.

If your credit rating is deemed great, you will be awarded a loan right away. However, when your credit score is below ideal, you will be denied a personal loan. Is it, however, the end of everything for you? What if you truly need money for a medical crisis, a family wedding, or another sudden extra cost? Don’t be alarmed. You may get a personal loan even if you have a bad credit score.

How can you get a Loan even if you have a Bad Credit History?

Some practical methods can help you get a loan even if you have a poor credit score. Despite having a poor credit score, there should be a few aspects in your fiscal profile that are stronger. You only need to take advantage of it. Some clever but legal methods to do so are listed below:

  • Profitable Potential

If you have a good income today or a good income prospect in the coming years, it indicates that you can repay your debts. This might help your loan form get granted even if you have a poor credit score.

  • Look for a Co-Applicant

Get your wife or other family members on board if they have a decent credit score. You may apply for a joint loan, which raises your chances of approval.

  • Accept a Higher Interest Rate

Some banks do give loans to you with bad credit. In these contexts, the loan sum is fairly small, and the interest rate is greater. If you want money quickly, you should make this choice. You might also try peer-to-peer borrowing, which is famous in western nations and is gaining traction in India.

  • Obtain a Loan using an Asset

Even if your credit score is poor, some lenders may grant you a loan by taking assets. Shares, land, fixed deposits, gold, and a variety of other assets are examples of collateral.

  • Start working to Improve your Credit Score

This will take some time, but it is the most useful method to avoid future loan denials. You may pay off your current debt, change your spending habits, make EMI payments on time, and pay your electric bills promptly. These are just a few of the simple steps you may take to boost your credit. In the end, your credit score will rise, and you’ll be more suited for loans.

What papers are needed to get a Personal Loan with a Low Credit Score?

  • Passport
  • Aadhar Card
  • Address Proof
  • Driver’s license
  • 6-month bank statement
  • Six-month salary slip
  • If you are a professional or work for yourself, you must provide proof of your Firm Registration Data/Service tax registration, 3 years of loss and profit statements, 3 years of balance sheets, and 3 years of ITR.


Personal loans are hard to attain with bad credit but still attainable. While most major banks are picky about credit scores, some lenders may be ready to modify credit conditions to provide you with a loan. You may attempt several methods, such as negotiating contexts with your present lender, borrowing against a deposit, or taking out a loan against gold, among others. 

Make certain that you truly need the funds. And after you have received the credit, you must be careful about returning it on time.

If you want to learn more about personal loans, visit Piramal Finance and explore their products and services.