Get a Personal Loan Without Credit Score – 5 Fool-Proof Ways

how to get personal loan without credit score

Let’s assume a best case scenario: You’re looking to opt for a personal loan after knowing its benefits, such as a collateral-free method and no end-use restriction. While reviewing the eligibility criteria, you notice that only people with a high credit score can apply for personal loans.

After checking your credit score, you’re restricting yourself from applying for one as you have a low credit score due to past loans and credit cards.

What if we say it is possible to apply for a personal loan with a low credit score?

Here, let’s discuss what a credit score is, why it is important, and some ways to apply for loans with a low credit score.

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What is a Credit Score?

A credit score is a three-digit numeric summary ranging from 300 to 900. Lenders, banks, and financial institutions mainly approve personal loans based on your credit score.

The higher the credit score (above 700), the more chances of getting approved for a personal loan with lower interest rates. Conversely, if the score range is low (300-600), you might be offered loans with high interest rates.

That’s because the credit score shows your creditworthiness. This score is based on many factors such as loan repayment history, debt-to-income ratio, credit mix, the type of loan you opted for, and credit cards you used.

In short, the credit score gives the lenders a clear idea of your repayment abilities and whether or not you can afford the loan.

How Does Your Credit Score Impact The Approval of a Personal Loan?

Would you lend money to everyone who is looking to borrow? Of course not; you’ll assess things such as the borrower’s income, if the person would use the credit for a particular purpose, and other financial behaviors.

This is because you’re concerned about the repayment of the money. In the same way, when lenders need to approve loans, they check for crucial details like income proof and credit score.

  • Income shows if the borrower can afford the loan amount.
  • A credit score shows how the borrower handled the previous loans responsibly.

Lenders decide if you’re a high or low-risk borrower and if you’ll pay the repayment promptly based on your credit score. Maintaining a good credit score is crucial in helping lenders approve the loan hassle-free.

Also, Read: Credit Score vs CIBIL Score: Are they Even Different?

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Can You Get a Personal Loan With a Low Credit Score?

Yes, you can.

Before applying for one, ensure that you know both the advantages and disadvantages of opting for a low credit score.

Pros of Getting a Loan With a Low Credit Score

A high credit score is not required – The main benefit is you can apply for personal loans even with a low credit score. This will help if you’re seeking emergency loans without a high score.
But, work on maintaining a good credit score to avoid getting rejected for personal loans in the future.

Digital process – Doubting if you should visit banks multiple times to get approved with a low credit score? Applying for a personal loan without a decent credit score is possible online on marketplaces such as Credmudra.
Submit necessary documents such as your PAN and/or Aadhaar card, fill in the details, and after verification, you’ll receive the amount in your bank account in 24-48 hours.

Instant disbursal – As these loans are mostly offered by NBFCs and fintech companies through an online process, you don’t have a lengthy waiting period to access the amount.
Many lenders complete the verification process quickly and disburse the loan amount within 48 hours.

Also, Read: How to Get a Business Loan on Low Credit Score?

Cons of Applying for a Loan Without a Decent Credit sScore

  • High-interest rates – A low credit score indicates that you’re a high-risk borrower so lenders might approve the loan with only high interest rates. With such high-interest rates, it can become difficult to repay the loan.
  • High chances of getting scammed – With increasing online lenders, you must be careful about getting scammed and engaging in fraudulent activities.

When applying with a low credit score, people who are desperate to get approved might ignore checking the authenticity of the lender. Taking advantage of this, fake lenders can misuse your account number, Aadhar card details, and PAN number data for their benefit.

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Calculate Your Personal Loan EMI

5 Ways to Get a Personal Loan Without a Decent Credit Score

1. Collateral-Based Loans

When applying for a personal loan, normally, there is no need to pledge any asset as collateral to the lender. The lender relies on your income proof and credit score to assess your repayment abilities and sanction the loan.

But with collateral-based loans, use any of your assets as collateral even when you have a low credit score. It’s because the lenders can sell the asset even if you’re unable to repay the loan.

As the risk gets lower on the lender side, they don’t demand high credit scores with collateral loans.

2. Small Cash Loans

Looking to borrow only a small amount of cash to handle the immediate daily expenses? Then, opt for small cash loans which have a higher possibility of getting approved.

Small cash or mini-cash loans are short-term loans that help people handle unexpected expenses with instant cash. Banks, NBFCs, and online lenders offer this loan even when you have a low credit score.

In this case, lenders approve the loan by checking other important criteria like the borrower’s income and job.

3. Stable Income Proof

You may have had financial struggles in the past and missed some timely EMIs while managing other expenses.

If your paycheck is high now with a stable job or you have additional sources of income, show this income proof to get your loan approved. This proves to the lender that you can repay the loan promptly.

4. Get a Guarantor

Have a family member or friend who can apply for a personal loan as a guarantor? Then, you have a high chance of getting approved. The only thing is the guarantor must have a high credit score.

When you apply for a loan with a co-applicant or guarantor, both are equally responsible for paying off the loan. So, if you fail to repay, the lender can retrieve the amount from the guarantor.

5. Explain NA or NH to the Lender

The ‘No history’ report shows that you have no borrowing history and are new to the credit system. While this is not considered negative, some lenders don’t approve loans with such a history.

So, explain your inactivity to the lender, and you have possibilities of getting approved with a high-interest rate.

Also, Read: How to Get Loan Without a CIBIL Score?

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5 Effective Tips to Increase Your Credit Score

While you can opt for a personal loan with a lower credit score when you need a loan urgently, ensure to improve your credit score.

Some ways to increase your credit score are:

  • Pay off your dues promptly. Set reminders and repay the loans on time, as it affects your credit score negatively if you fail
  • Don’t apply for multiple loans within a short period. This might give bad signals to the lenders as a financially struggling person
  • Apply for different types of loans, such as secured, unsecured, and short-term
  • Check your credit report for errors and inconsistencies. Report and rectify these errors to increase the credit score instantly
  • Maintain old credit cards with no outstanding dues

How to Choose the Right Lender to Apply for a Personal Loan?

The trickiest part about applying for a personal loan with a low credit score is identifying the right lender. Skip this part; you have an increased chance of getting scammed.

So, verify the lender’s authenticity by checking the reviews and ratings on their website. Carry out this step individually for all the lenders offering loans without the credit score.

The best solution? Use Credmudra to get matched to the right lender. Credmudra is a matchmaker that can help you connect with lenders with a high chance of getting your loan approved.

Instead of manually checking the authenticity of lenders, Credmudra does it for you.

Steps to Apply for a Personal Loan without a High Credit Score using Credmudra:

  • First, enter the mobile number to receive the OTP
  • After OTP verification, carry out the next steps
  • Submit all the details such as name, address, employment status, salary, and required loan amount
  • We’ll then match you with the lender who will approve your loan based on your requirements
  • After assessing your creditworthiness, you’ll be offered the loan amount with flexible repayment tenures

Also, Read: 8 Best Ways to Improve Your CIBIL Score Quickly

Opt for a Personal Loan Without Worrying About the Approval

Applying for a personal loan online is the easy part. You need to check the authenticity of the lender and eligibility criteria.

However, opting for a personal loan online with a low credit score is challenging. You must avoid getting scammed and choose lenders who would sanction you the loan.

With Credmudra, you don’t need to search for the lenders. Submit the details, and we’ll match you with credible lenders who approve the loan with lower credit scores.

Sign up on Credmudra to get started.

We’ll match you with a reliable lender within minutes.

Also, Read: How To Get Credit Card Without CIBIL Score: 4 Ways


1. Can you Apply for a Personal Loan with a Low Credit Score?

You can apply for personal loans even with a slightly lower credit score. Lenders will consider your income and job to approve the loan.

2. Is the Credit Score Important for Getting Approved?

Yes, credit score is an important factor that lenders look for in a borrower. Work on your credit score and increase it by paying the current loans on time.

3. What are the Factors that Determine a Good Credit Score?

A high credit score depends on many factors, such as loan repayment history, credit mix, type of credit, and debt-to-income ratio.

4. Can I Access the Loans Instantly, even with a Low Credit Score?

The process from application to getting the amount in your account can take 24-48 hours.

5. What is the Interest Rate for Loans with Lower Credit Scores?

Expect high-interest rates ranging from 25-35% when you apply with a low credit score.

Also, Read: NBFC Loans Without CIBIL Score: Your Complete Guide

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