Low Credit Score? Here’s How to Get a Loan Anyway

Your credit score isn’t perfect — in fact, it might be below 650 or even 600. But does that mean your dreams of getting a loan are crushed? Absolutely not. Many lenders and financial tools today cater to individuals with low credit scores. Whether you’re looking for a personal loan, business funding, or emergency cash, there are smart ways to secure financing — even with less-than-stellar credit.

Here’s how you can get a loan even if your credit score is low.

💳 What is Considered a Low Credit Score?

When applying for any type of loan — be it personal, home, car, or business — one of the first things lenders check is your credit score. This three-digit number is a reflection of your creditworthiness and financial discipline. It helps lenders assess how likely you are to repay borrowed money on time.

In India, credit scores are provided by credit bureaus like CIBIL, Experian, CRIF High Mark, and Equifax, with CIBIL being the most widely used. These scores typically range between 300 and 900. The higher your score, the better your chances of securing a loan with favorable terms.

Here’s a breakdown of credit score ranges and what they usually signify:

👉 Why Is a Low Credit Score Problematic?

A credit score below 650 often raises red flags for lenders. It may indicate issues such as:

• Late or missed EMI payments

• High credit card usage

• Loan defaults or settlements

• Limited credit history or no history at all

• Multiple loan applications in a short time (indicating financial stress)

Due to these concerns, lenders may either reject your loan application outright or offer the loan at a much higher interest rate to cover the perceived risk.

✨ But Here’s the Good News

Having a low credit score does not disqualify you completely. With the rise of fintech platforms, alternative lenders, and more inclusive underwriting practices, you still have access to financial solutions. Some lenders now focus more on your income, stability, or asset-backed security rather than just your score.

🔍 Step-by-Step: How to Get a Loan with a Low Credit Score

Know Your Credit Report Inside-Out

Request a copy of your credit report from CIBIL, Experian, or CRIF High Mark. Check for:

• Errors in personal or financial data

• Old loans marked unpaid

• Duplicate entries

• Unauthorized accounts

Fixing these errors can give your score a quick boost.

Look for Lenders That Offer Low CIBIL Loans

Many NBFCs and fintech lenders specialize in providing loans to individuals with low credit scores. These lenders often:

• Focus more on income and cash flow than credit score alone

• Offer flexible EMI options

• Require minimal documentation

💡 Tip: Search for terms like “low CIBIL personal loan,” “bad credit business loan,” or “no credit check loan providers.”

Consider a Co-Applicant or Guarantor

A co-applicant with a good credit history can boost your chances. The lender takes into account the combined repayment capacity, which reduces risk.

This is especially helpful for:

• Home loans

• Business loans

• High-ticket personal loans

Opt for Secured Loans

If unsecured loans seem out of reach, consider securing your loan with an asset:

• Loan Against Property (LAP)

• Gold Loan

• Loan Against Fixed Deposit

• Used Car Loan

These loans generally have lower interest rates and higher approval chances, even for low credit holders.

Start Small, Prove Reliability

Start with a small personal loan or consumer durable loan. Repay it consistently. This helps:

• Build trust with lenders

• Improve your credit history

• Qualify for larger loans later

Some lenders offer credit-builder loans specifically designed for this purpose.

Show Proof of Stable Income

Even with a low score, a stable monthly income (salary or business revenue) can help. Lenders are more likely to approve your loan if:

• You’ve had a steady job for over 1 year

• Your monthly income comfortably covers the EMI

• You can submit ITRs, salary slips, or bank statements

Use Peer-to-Peer Lending Platforms

Platforms like Faircent, LenDenClub, and others allow individual investors to fund borrowers. Their approval process is often more flexible and credit-score lenient.

Negotiate with Existing Banks

If you already have a savings account or relationship with a bank, use it. Ask about:

• Pre-approved loan offers

• Overdraft limits

• Credit card EMI conversion offers

Loyalty can work in your favor.

🛑 Things to Avoid When You Have a Low Credit Score

When your credit score is already low, it’s crucial to avoid mistakes that could damage it further. Every financial decision counts — either working toward improving your credit health or pushing it further down. Here are key actions you must avoid if you’re trying to recover or manage a low credit score:

❌ Applying to Too Many Lenders at Once

When you urgently need funds, it’s tempting to submit loan applications to multiple banks or NBFCs at the same time — hoping at least one will approve. But here’s the catch:

• Each time you apply for credit, the lender conducts a “hard inquiry” into your credit report.

• Multiple hard inquiries within a short period signal desperation or financial stress.

• This can cause your credit score to drop even further — often by a few points each time.

Smart Tip: Instead of randomly applying, do your research and pre-check your eligibility on lender websites that offer soft inquiries (which don’t impact your score). Then apply selectively.

❌ Taking Payday Loans or Instant Apps

Quick cash through payday loans or instant loan apps might seem like a lifesaver, especially when banks say no. But the reality is:

• These loans often come with extremely high interest rates, sometimes over 30-50% annually.

• Many include hidden fees, short repayment cycles, and harsh penalties for late payment.

• They can lead to a debt trap, where you’re forced to borrow again just to repay earlier loans.

Additionally, many unregulated apps do not report your timely repayments to credit bureaus, which means they don’t help improve your score either.

❌ Missing Even One EMI

If your credit score is already on the lower side, every missed EMI counts — and not in your favor.

• Late or missed payments are reported to credit bureaus and can stay on your credit report for years.

• Just one missed installment can cause your score to drop by 50–100 points, especially if your history is already weak.

• It shows lenders that you lack repayment discipline, reducing future approval chances.

Pro Tip: Set auto-debit instructions or calendar reminders to ensure on-time payments.

❌ Ignoring Your Credit Score

Many people with poor credit simply ignore their credit reports, assuming they’re already “bad enough.” But that’s a huge mistake.

• Your credit report may contain errors, outdated accounts, or fraudulent entries dragging down your score.

• Not knowing your score means you’re making financial decisions blindly.

• Without monitoring, you can’t track whether your actions are helping or hurting your score.

Solution: Check your credit report once every 3–6 months from trusted bureaus like CIBIL, Experian, or CRIF. Most offer one free report per year.

🔁 Can You Improve Your Credit Score After Getting the Loan?

Yes! Here’s how:

• Pay EMIs on time — always

• Keep your credit utilization below 30%

• Avoid new loan applications unless necessary

• Monitor and correct any report discrepancies

• Don’t close old accounts unless absolutely needed

A good repayment history can boost your score in 6–12 months, opening doors to better credit products.

In the sections ahead, we’ll cover how you can still get a loan even with a low credit score, and how you can gradually repair your credit for a stronger financial future.

✅ Apply for a Loan with Networth Advisory – Even with a Low Credit Score

Don’t let a low credit score hold you back from your financial goals. At Networth Advisory, we specialize in helping individuals and business owners secure the right loan solutions — even with less-than-perfect credit. Our expert team works closely with multiple lending partners to offer customized options, easy documentation, and quick approvals.

Whether you need funds for personal use, business growth, or debt consolidation, we’re here to guide you every step of the way.

Apply with Networth Advisory today — because your credit score shouldn’t limit your potential.