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Personal Loan

5 tips to get a personal loan with a low CIBIL score

Key Takeaways

  • Securing a personal loan with a low CIBIL score is challenging, but not impossible. Factors like employment status, income, and a clean credit report can improve your chances.
  • It’s essential to calculate your needs and ensure all necessary documents are in place before applying.
  • Using tools like the IDFC FIRST Bank personal loan EMI calculator can help you understand the repayment process better.
01 Jul 2025 by Team FinFIRST

Personal loans can be one of the easiest loans to acquire. They are unsecured loans, which means you do not need to offer collateral. They can be used for a multitude of purposes. There is minimal documentation involved and a relatively shorter processing time as well. However, one of the most important considerations when you apply for a personal loan is your CIBIL score.

CIBIL score for personal loans
 

CIBIL score is a credit score provided by CIBIL, one of India’s leading credit information bureaus. The score reflects your credit history based on your financial behaviour. It includes loans and repayments, credit card payments, and more. The score ranges between 300 and 900, with a higher score indicating a healthy credit history.

A lower credit score can hurt your chances of being approved for a credit card, home loan, and other lending products. Usually, a credit score of 750 or more is considered excellent. People with a score over 750 can expect better approvals for financial products like loans. A score over 700 is decent, while getting a personal loan for a CIBIL score of 550 or lower can be difficult.

The table below outlines what is considered a good or bad credit score:
 

Credit score

Is it good or bad?

Chances of approval

Less than 600

Poor

Extremely low

600-649

Bad

Low

650-699

Satisfactory

Possible

700-749

Good

High

Over 750

Very good

Extremely high

 

Challenges of low CIBIL scores
 

If you have a low CIBIL score, you may often face challenges while taking a loan. These challenges may include:

  • Higher interest rates: Lenders may offer loans at significantly higher interest rates to offset the perceived risk of lending to low-score borrowers like you.
  • Limited loan options: Many financial institutions or banks may reject applications outright or offer smaller loan amounts.
  • Strict eligibility checks: A low CIBIL score triggers closer scrutiny of your income, employment stability, and other financial obligations.

Can you still qualify for a personal loan with a low CIBIL score?
 

Obtaining a personal loan with a low CIBIL score can be challenging, but it's not impossible. By implementing the following strategies, you can enhance your chances of approval and secure the funds you need.

1. Apply with a co-applicant
 

Involving a co-applicant or guarantor with a strong credit history can significantly improve your loan approval prospects. Lenders may view the combined creditworthiness more favourably, reducing perceived risk.

2. Offer collateral
 

Secured loans, which require collateral such as property or fixed deposits, provide lenders with assurance against default. This security can make lenders more willing to approve your loan despite a low credit score.

3. Demonstrate stable income
 

Providing proof of a steady and sufficient income reassures lenders of your repayment capability. Submit documents like salary slips, bank statements, or income tax returns to substantiate your financial stability.

4. Opt for smaller loan amounts
 

Applying for a smaller loan amount reduces the lender's risk, increasing the likelihood of approval. Once you've established a reliable repayment record, you can consider applying for larger amounts in the future.

5. Maintain a low debt-to-income ratio
 

A lower debt-to-income ratio indicates better financial health and enhances your loan eligibility. Aim to reduce existing debts and avoid taking on new ones before applying for a loan.

Personal loan for applicants with a low CIBIL score: Checklist to plan like a pro
 

While a low CIBIL score impacts the chances of getting approved for a personal loan, it is not impossible. There are other factors that affect your chances of getting a loan – your employment status, income, and credit report. Thus, if you want a personal loan for a CIBIL score of 550 or above, you need to be mindful of a few parameters:

1. Calculate your needs
 

You can use the IDFC FIRST Bank personal loan EMI calculator to get a better picture of how long you will be required to pay EMIs at different interest rates. Based on these calculations, you can draft your monthly budget and ensure its alignment with your overall goals.  

2. Ensure all your documents are in place
 

Personal loans require minimum documentation, so you only need to gather all the right documents and ensure they are as per requirements. The list includes your proof of identity and residence, salary account bank statement for the past three months, and salary slips for the past three months.

3. Research before you apply
 

Select a lender whose terms and conditions appear favourable. Applying to multiple places does not reflect well on your credit report. Once you secure a loan, ensure you use it responsibly. If you are using it to consolidate and pay off your previous loans, ensure that you are doing so in the right manner.

Why is it better to apply for a personal loan with a good credit score?
 

While you might qualify for certain personal loans with a low credit score, do note that it is quite likely that you’ll get offered unfavourable terms such as low loan amounts and high interest rates. Having a steady financial record and decent credit score always puts you in a good position with banks when it comes to getting the best loan deals.

For instance, with IDFC FIRST Bank, a good credit score of 730 or more can qualify you for FIRSTmoney loans. FIRSTmoney is a smart personal loan through which you can get up to ₹10 lakhs, competitive interest rates starting at just 9.99%, and flexible repayment tenures ranging from 9 months to 60 months. FIRSTmoney even offers zero foreclosure benefits, which means that with repayment terms being so favourable, you can choose to pay off your dues anytime before your tenure ends without even worrying about any prepayment charges.

Applying for a FIRSTmoney loan is a breeze and completely online! All you need is your Aadhaar card number and display your PAN card during the video KYC process. Once your loan offer is approved, you can then opt for multiple on-demand loans without submitting a new loan application each time.

Start improving your credit score today!
 

A low credit score doesn’t mean you are stuck with it for life. You can improve your credit score in the following ways.

  • Make timely repayments: Always pay your EMIs, credit card bills, and other dues before the due date.
  • Limit credit utilisation: Keep your credit card usage under 30% of your total limit to show disciplined borrowing.
  • Check your credit report regularly: Identify and rectify any errors or outdated information affecting your score.
  • Avoid multiple loan applications: Applying to many lenders within a short period negatively impacts your credit profile.
  • Maintain a healthy credit mix: A balanced portfolio of secured (home loans) and unsecured loans (personal loans) boosts credit health.

Apply confidently - A step closer to your goals
 

While a low CIBIL score can make securing a personal loan more challenging, it’s certainly not the end of the road. With the right strategy—such as applying with a co-applicant, choosing smaller loan amounts, or exploring lenders like IDFC FIRST Bank who consider more than just your credit score—you can still access the funds you need. Focus on building healthy financial habits, researching lenders carefully, and using credit responsibly to gradually improve your score. A thoughtful approach today can lead to stronger financial freedom tomorrow.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.

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