Can You Get a Personal Loan with Low CIBIL Score?
How to get a personal loan with low CIBIL score (below 700) in India — NBFC options, secured loans, co-applicants and realistic interest rates.
How personal loans are priced in India
Banks and NBFCs price unsecured personal loans on a risk-based grid that combines your CIBIL score, monthly net take-home pay, current EMI obligations (the FOI or Fixed Obligation to Income ratio), employer category and the bank's marginal cost of funds (MCLR / repo-linked benchmark). The advertised 'starting from 10.49%' rate is reserved for CIBIL 800+ borrowers working at AAA-rated employers — most approved applicants pay 13%–18%. The single biggest lever a borrower controls is the loan tenure: a ₹5L loan at 14% over 3 years costs ₹1.15L in interest, but the same loan over 5 years costs ₹1.98L — a 72% jump for the convenience of a smaller EMI.
Always compare the all-inclusive APR, not the flat interest rate. Indian lenders quote reducing-balance rates, but processing fees (1%–3%), GST on interest, prepayment penalty (typically zero for floating-rate personal loans under RBI's 2023 directive but 2%–4% on fixed-rate loans), and insurance bundling can add 200–400 basis points to the effective cost. Run the Equated Monthly Instalment through our EMI calculator with the processing fee folded into the principal — that is the number you actually pay.
01.The reality at different CIBIL bands
750+ → best rates from any bank. 700–749 → standard rates. 650–699 → conditional approval at 16–22% APR. 600–649 → NBFCs only at 22–28%. Below 600 → secured loan or guarantor needed.
Why this matters: For Indian borrowers, the practical impact shows up on the Equated Monthly Instalment and the total interest paid across the tenure — two numbers that should anchor every comparison. The point above (the reality at different cibil bands) is one of the highest-leverage decisions in this category — getting it right tends to compound across the relationship with the lender.
02.1. NBFCs more flexible than banks
Bajaj Finserv, Tata Capital, Kreditbee, MoneyView, Fibe and IIFL Finance regularly approve CIBIL 685–700 applicants at 18–24% APR with ₹15K–₹25K net salary.
Why this matters: For Indian borrowers, the practical impact shows up on the Equated Monthly Instalment and the total interest paid across the tenure — two numbers that should anchor every comparison. The point above (1. nbfcs more flexible than banks) is one of the highest-leverage decisions in this category — getting it right tends to compound across the relationship with the lender.
03.2. Loan against FD or gold
If you have a fixed deposit (₹50K+) or gold, banks offer loan against it at 9–12% APR with zero CIBIL check. Best alternative for low-score borrowers.
Why this matters: For Indian borrowers, the practical impact shows up on the Equated Monthly Instalment and the total interest paid across the tenure — two numbers that should anchor every comparison. The point above (2. loan against fd or gold) is one of the highest-leverage decisions in this category — getting it right tends to compound across the relationship with the lender.
04.3. Loan against PPF / LIC policy / mutual funds
Up to 70% of the surrender value, lower interest than personal loan, minimal documentation, no CIBIL impact.
Why this matters: For Indian borrowers, the practical impact shows up on the Equated Monthly Instalment and the total interest paid across the tenure — two numbers that should anchor every comparison. The point above (3. loan against ppf / lic policy / mutual funds) is one of the highest-leverage decisions in this category — getting it right tends to compound across the relationship with the lender.
05.4. Add a co-applicant or guarantor
A spouse/parent with CIBIL 750+ as co-applicant unlocks bank rates even when your own score is in the 650–699 range.
Why this matters: For Indian borrowers, the practical impact shows up on the Equated Monthly Instalment and the total interest paid across the tenure — two numbers that should anchor every comparison. The point above (4. add a co-applicant or guarantor) is one of the highest-leverage decisions in this category — getting it right tends to compound across the relationship with the lender.
06.5. Secured credit card → improve CIBIL first
An SBI Unnati or Kotak 811 secured card against a ₹10K–₹25K FD can lift your score 40–80 points in 6 months — then apply for a personal loan at standard rates.
Why this matters: For Indian borrowers, the practical impact shows up on the Equated Monthly Instalment and the total interest paid across the tenure — two numbers that should anchor every comparison. The point above (5. secured credit card → improve cibil first) is one of the highest-leverage decisions in this category — getting it right tends to compound across the relationship with the lender.
07.What to avoid
App-based lenders charging 0.5%–1% per day, 'instant loan' apps without RBI/NBFC license, processing fees deducted upfront before disbursal — these are usually predatory or outright scams.
Why this matters: For Indian borrowers, the practical impact shows up on the Equated Monthly Instalment and the total interest paid across the tenure — two numbers that should anchor every comparison. The point above (what to avoid) is one of the highest-leverage decisions in this category — getting it right tends to compound across the relationship with the lender.
08.True cost reality check
A ₹3L loan at 24% APR over 3 years has EMI of ₹11,768 and total interest of ₹1.24L — almost half the loan amount. Borrow only what you can repay in 18–24 months at high rates.
Why this matters: For Indian borrowers, the practical impact shows up on the Equated Monthly Instalment and the total interest paid across the tenure — two numbers that should anchor every comparison. The point above (true cost reality check) is one of the highest-leverage decisions in this category — getting it right tends to compound across the relationship with the lender.
Personal loan red flags to avoid
- 1Lenders that demand any 'advance fee', 'processing fee in cash' or 'security deposit' before disbursal — RBI-regulated entities deduct fees from disbursal, never collect upfront.
- 2Loan agreements with a reset clause that allows the lender to raise the spread over benchmark mid-tenure — read the Key Fact Statement (KFS) the RBI mandates.
- 3Insurance products bundled as 'mandatory' — credit life insurance is optional under IRDAI rules; refuse it and the rate cannot legally change.
- 4Top-up offers from your existing lender at a higher rate than a fresh loan from a competitor — always benchmark against at least three lenders before accepting a top-up.
- 5Pre-EMI offers that ask you to start repayment before disbursal — this is almost always a sign of a non-regulated lender.
How this article was researched
Every product fact above is sourced from the issuer's official Most Important Terms & Conditions document or the relevant Reserve Bank of India / National Housing Bank / IRDAI master direction, and verified within the last 90 days. Rankings follow the documented criteria published on each comparison guide — no partner has been able to influence the order. We update the article whenever a regulator notification, repo-rate decision or issuer fee change materially affects the recommendations, and we add a dated change-log entry below.
This article is educational content and not personalised financial advice. Your eligibility, applicable rate and final terms are decided by the lender after reviewing your KYC, income and credit bureau report. Read our disclaimer and privacy policy before applying through any link on this site.
Key terms in this guide
- APR (Annual Percentage Rate)
- The true annual cost of borrowing, including interest plus processing fees and mandatory charges. Always higher than the headline interest rate.
- CIBIL Score
- A 300–900 credit score from TransUnion CIBIL, the most widely used credit bureau in India. 750+ is excellent.
- EBLR (External Benchmark Linked Rate)
- RBI-mandated benchmark for retail floating loans since Oct 2019, almost always the repo rate plus a fixed spread.
- EMI
- Equated Monthly Instalment — the fixed monthly payment covering interest and principal over the loan tenure.
- FOI Ratio
- Fixed Obligation to Income — the proportion of your monthly income going to existing EMIs. Lenders cap new loans at 50%–55% FOI.
- KFS (Key Fact Statement)
- RBI-mandated single-page summary of every retail loan: rate, fees, APR, EMI, prepayment terms — in a standard format.
- LTV (Loan to Value)
- Loan amount as a percentage of property value. RBI caps LTV at 75%–90% for home loans by ticket size.
- MITC
- Most Important Terms & Conditions — the legally binding fine print every credit-card issuer publishes on its website.