You can get personal loan even if you have a bad CIBIL score: Adopt these 5 effective methods

In today’s era, loan has become an essential tool to meet financial needs. But sometimes due to small carelessness or delay in credit card bill payment, the CIBIL score gets spoiled. Generally a score above 750 is considered ideal, but if your score is less than this, there is no need to be disappointed. According to the latest financial guidelines dated March 29, 2026, you can still get a personal loan by adopting some smart methods.

1. Co-applicant or joint loan option

If your personal credit score is poor, the most effective way is to apply along with a family member (spouse or parent) who has a CIBIL score between 750-800.

Advantage: The bank’s risk is reduced as the second person stands as a guarantee for the loan.

Condition: Co-applicant must have a stable income and a clean past repayment record.

2. Turn to NBFCs and Small Finance Banks

Large government or private banks (like SBI or HDFC) follow strict rules, but non-banking financial companies (NBFCs) and small finance banks are a little more flexible.

Options: Institutions like Bajaj Finserv, Tata Capital or Muthoot Finance also consider low CIBIL scores.

Note: Here you may have to pay 2% to 5% higher interest rate than usual, because the bank is taking more risk.

3. Choose ‘secured’ loans instead of ‘unsecured’

Personal loans are usually unsecured, which is difficult to get with a bad CIBIL. Instead, use your property as collateral:

Gold Loan: It is easiest to take a loan against gold because the role of CIBIL score is negligible in it.

Loan against FD: If you have a fixed deposit in the bank, you can take a loan up to 90% of its amount.

Property or LIC Policy: By mortgaging these, you can get a secured loan at a low interest rate.

4. Show proof and stability of income

The bank not only looks at the CIBIL score but also looks at your repayment capacity.

If your salary has increased in the last few years or you have been working in a reputed company for a long time, present your salary slip and bank statement convincingly.

Convince the bank that your current financial position is sound and that the previous poor score was only a temporary incident.

5. Apply for Small Loan Amount

Asking for a loan of Rs 10-20 lakh at once with a bad CIBIL score can lead to rejection.

Initially apply for small loans ranging from Rs 50,000 to Rs 1 lakh.

Repaying small loans on time will not only fulfill your immediate needs, but will also gradually improve your CIBIL score, which will make it easier for bigger loans in the future.