Personal Loan

How to Get a Personal Loan When You Have a Bad CIBIL Score?


Personal loans can be a lifesaver, literally. They are the best options for a health emergency or a crisis. It is also an excellent choice when you are paying off high-interest debt or simply when you don’t want to risk your assets. 

But what do you do if you are rejected for a personal loan because of a bad CIBIL score? Worry not, as you can read further to learn how to get a personal loan. But more importantly, what are CIBIL scores?

Credit Scores Vs CIBIL Scores

A credit score is a 3-digit number that lenders consider when approving you for loans. A credit score is a calculation of your ability to pay back debts. Credit scores allow lenders to understand the risk involved in giving you loans. Your credit history is used to calculate your credit scores. 

Credit Rating Agencies issue credit scores. These agencies are authorised and regulated by SEBI, the Securities and Exchange Board of India. SEBI has authorised several credit rating agencies, such as:

  • TransUnion CIBIL Limited 
  • Equifax
  • Experian
  • CRIF High Mark

Your CIBIL score is the credit score issued by TransUnion CIBIL.

What Determines Your CIBIL Score?

CIBIL score is calculated based on the information provided to TransUnion CIBIL.   They use information such as your payment history, the number of loans or credit cards in your name, and the percentage of credit you are using at a given time to calculate your CIBIL score. 

What Is a Bad CIBIL Score?

CIBIL score ranges from 300-900. They are rated as follows:

  • Excellent Score

Typically, scores above 750 are considered good scores by lenders. A score of 750 and above will give you easier access to loans and credit cards.  

  • Good Score

Scores ranging from 650-750 are considered good. While it is not ideal, scores in this range can grant you fairly easy access to loans.

  • Average Score

Scores ranging from 550-650 are considered average. Even with a score of 550, you are still eligible for personal loans. However, you will be charged a higher interest rate and eligible only for a lower amount.

  • Poor Score

Any score below 550 is considered a bad CIBIL score and is generally rejected for personal loans. 

You can check your score using the Credit Report to determine whether you have a bad CIBIL score.

Building a CIBIL Score

There is a possibility that you don’t have a CIBIL score. This can happen if the credit bureau doesn’t have enough information about your credit habits or if you have never taken a credit card or a loan. Here are some ways to build a credit history to get a CIBIL score:

  • Apply for a loan or a credit card with your savings account 

You can use the bank with which you already have an account since they know your credential and history. There is a higher chance of them approving your loans.

  • Apply for a secured loan 

Making regular payments with such loans will help build a good credit history and give the credit bureaus enough information. 

  • Get a credit card against a fixed deposit

Most banks offer a credit card when you open a fixed deposit (FD). The bank has a lower risk due to the FD acting as collateral. This limits the amount you can spend using the card depending on the amount in your FD, but it is a great way to build a credit score

How to Get a Personal Loan, Even with a Bad CIBIL Score?

The lower your CIBIL scores, the harder it will be to get approval for personal loans. Even when approved, you have to pay a higher interest. Getting loans with a bad CIBIL score is, however, not impossible. Here are a few ways to increase your chance of getting a loan with a bad CIBIL score:

  1. Check for errors in the credit report

The first step is to check if you truly have a bad CIBIL score. Look for errors in your credit report. If you find any errors, report them to the credit rating bureau to increase your CIBIL score. Ensure you have the relevant information on your report when applying for a personal loan. 

  1. Try a lower amount

As your CIBIL score represents your creditworthiness, a bad CIBIL score indicates to lenders that lending money to you is high risk. Thus, the easiest way to get loan approval is to reduce the risk to banks and lenders. You can do this by applying for a lower amount. 

You can use an online personal eligibility loan calculator to know if you are eligible for the needed amount. 

  1. Apply as a co-applicant

If your co-applicant has a high CIBIL score, your chances of getting a loan increase drastically. This is because lenders look into the details of both applicants. You may also be eligible for a high-value loan since the responsibility is shared with your co-applicant.

  1. Apply with a guarantor

Another way to reduce risk to the lenders is for them to have confirmation that they will get their money back. You can do this by getting a guarantor with a good credit score. 

  1. Present proof of income to support repayment

Submit documents showing your income sources. This will act as proof that you are capable of maintaining your repayment schedule. This will assure the lenders that there is a lower risk of non-repayment. Share the details of any income increase with proof to increase the approval probability.

  1. Try using another lender

Other financial institutions might approve a personal loan for a bad CIBIL score if banks don’t. Try private finances to get your loan. There might be a change in interest rate. But it increases your chance of approval.

  1. Explain the zero credit score

If your credit report shows an NA, NH, or zero credit score, you have been inactive for 36 months or more. You can explain this period of inactivity to the lenders. They will approve loans if these reasons are valid. But the approved loans will be of a higher interest rate. 


A good credit score or CIBIL score is an important factor for the approval of loans. Your bad CIBIL score suggests a high risk of lending to banks and other lenders. Thus, it is always in your best interest to improve your bad CIBIL score. However, if you don’t have time to raise your bad CIBIL score, it is still possible to get a personal loan. Make sure to go through each method carefully and use what is best for your situation.

For quick and easy, hassle-free personal loans, try Piramal Finance. Get personal loans with zero prepayment and foreclosure charges and a group of expert advisors to help you through the entire process.