Get a personal loan despite low CREDIT SCORES; check out these five tricks


There are many people whose loan applications are rejected by lenders because of low credit scores or CIBIL scores. A loan rejection can break many dreams. People with low credit scores also want to improve their lifestyle, but because their creditworthiness or borrowing capacity is less, they often feel depressed. A credit score of less than 624 is considered a bad credit score, while those above 700 are considered good and those above 750 are considered excellent.

You may be surprised to learn that although a bank has rejected your loan application due to a low credit score, there are many ways you can take advantage of a personal loan. Some of them are listed here:

Apply with NBFCs: Non-bank financial companies often approve personal loans to people with low credit scores, but it comes with a rider. They offer it at a higher interest rate compared to the nationalized banks. Because NBFCs have greater flexibility when it comes to credit scores, they are willing to take a risk and offer loans to needy people.

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Peer-to-peer websites: These are lending websites often known as P2P websites. These are offering a loan of up to Rs 5 lakh for a period of one year to five years. These websites connect borrowers and lenders to facilitate loan approval.

Take a co-applicant: If your earning or credit score doesn’t qualify for a loan, it may be helpful to add an earning family member as a co-applicant. Since it will reduce the credit risk of the lender, you may have a higher chance of getting the loan.

Smaller amount: Lenders are often hesitant to provide a high-value personal loan to those with a low credit score. So if you opt for a smaller amount, it can be approved with small checks. Suppose if you borrow a loan of one lakhs and repay it on time, it also improves your credit score and thus enables you to get a bigger loan.

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Secured loan: Secured loans are loans that are provided on the basis of collateral. It means that you have to mortgage something valuable in exchange for the loan amount. You can take out a mortgage on gold, real estate, financial securities, etc. You can also go for a gold loan with a lower interest rate.

However, keep in mind that a loan’s borrowing capacity is also affected by your repayment history. It would be difficult for you to get a loan if you default on EMIs/repayments more often.





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