A low credit score can make borrowing challenging, but it doesn’t make it impossible. At Today Finserv Consulting India, we specialize in helping individuals with poor credit secure financing. Here’s everything you need to know about getting a personal loan with a bad credit score.
1. What is Considered a Bad Credit Score?
In India, credit scores range from 300 to 900, and lenders categorize them as:
| Credit Score Range | Rating | Loan Approval Chances |
|---|---|---|
| 750+ | Excellent | Highest approval, best rates |
| 700-749 | Good | High approval, competitive rates |
| 650-699 | Fair | Moderate approval, higher interest |
| Below 650 | Poor | Difficult, but possible |
Key Insight:
Most traditional banks reject applications below 650, but some NBFCs and fintech lenders may approve loans for scores as low as 550.
2. Loan Options for Bad Credit Scores
A. Secured Personal Loans (Easier Approval)
✔ Gold Loan – No credit check, quick disbursal
✔ Loan Against Fixed Deposit – Interest slightly higher than FD rate
✔ Loan Against Property – Lower rates, but requires collateral
B. Unsecured Personal Loans (Tougher but Possible)
✔ NBFC Personal Loans – Higher interest (18-30%)
✔ Peer-to-Peer (P2P) Lending – Flexible eligibility
✔ Salary Advance Loans – Employer-based, minimal checks
C. Co-Signed Loans
- A co-applicant with good credit (700+) can boost approval chances
- Their income and creditworthiness support your application
3. How to Improve Approval Odds with Bad Credit
Quick Fixes (Before Applying)
✔ Add a Co-Applicant – Stronger credit profile helps
✔ Opt for Smaller Loan Amounts – Higher approval likelihood
✔ Show Stable Income – Consistent salary/business revenue
Long-Term Credit Repair (6-12 Months)
✔ Pay Bills on Time – Biggest impact on credit score
✔ Reduce Credit Utilization – Keep below 30% of limit
✔ Dispute Credit Report Errors – Correct inaccuracies
4. Risks of Bad Credit Personal Loans
⚠ Higher Interest Rates (Up to 30% vs. 10-12% for good credit)
⚠ Shorter Tenure – Larger EMIs, higher default risk
⚠ Predatory Lenders – Watch for hidden charges
⚠ Debt Trap Risk – Falling behind worsens credit
Pro Tip: Always check for RBI-registered lenders to avoid scams.
5. FAQs About Personal Loans with Bad Credit
1. What is the minimum CIBIL score for a personal loan?
Most banks require 650+, but some NBFCs lend at 550-600.
2. Can I get a ₹5 lakh loan with a 600 credit score?
Possible with:
✔ Collateral (gold, FD)
✔ High-income co-applicant
✔ NBFCs specializing in low-credit loans
3. How fast can I improve a 550 credit score?
- 100+ points in 6 months with disciplined repayments
- 50 points in 3 months by correcting credit report errors
4. Are “no credit check” loans safe?
Risky! They often charge excessive fees (30%+ interest). Stick to RBI-approved lenders.
5. Does a loan rejection further hurt my credit score?
Yes, each rejection can drop your score by 5-10 points. Apply selectively.
6. How Today Finserv Can Help
We assist borrowers with poor credit by:
✔ Finding lender matches (banks/NBFCs with flexible criteria)
✔ Negotiating better rates (saving 3-5% interest)
✔ Credit repair guidance (improve scores strategically)
✔ Loan restructuring (reduce EMIs, avoid default)
