Struggling with a low or bad CIBIL score? Discover five personal loan options catering to individuals with poor credit scores, including PNB, Airtel, and Fibe offerings. Learn about interest rates, eligibility criteria, and tips to improve your chances of approval.

A low credit score is a difficult situation to overcome. When allocating you a loan, it's almost sure your credit score plays its part. A credit score is a scale aggregating past and present borrowings to measure your creditworthiness. A good credit score is practically a requirement when applying for loans, especially unsecured loans (without any collateral). A personal loan comes under an unsecured loan. But can you get a personal loan if your credit score is low?

But first of all, we need to understand what is considered a low credit score. 

For personal loans, 700+ is the standard CIBIL score required for smooth approval (provided other eligibility categories are cleared). So, we consider less than 650 to be a low or poor CIBIL score.

Can I get a personal loan for a CIBIL score of 550?

Securing an unsecured loan with a CIBIL score of 550 is nearly impossible. A score of less than 700 shows that the borrower needs to catch up on payments. That increases the risk lenders carry when lending you the money. So, at a score of 550, they may be hesitant to approve the amount. However, you can explore secured loan options and other schemes mentioned here. 

Start building and improving your credit score to ensure your future endeavours are safe from roadblocks. 

Can I get a personal loan with a bad CIBIL or credit score?

It depends on what is considered as wrong. If it is less than 650 (CIBIL), securing a loan without any collateral will be challenging. But not all hopes are lost. Your eligibility and terms depend on your salary, employment, age and other criteria that are decided by the lender. You may benefit from the following offerings. 

PNB Sahyog Rin - Personal Loan for Public

This loan is provided by Punjab National Bank and categorised based on the borrower's employment. Depending on your type of employment, you can get good terms on your loan.

Principal Amount: 

Category A: Defence/ Para Military Personals

If you have either of the following with a minimum of 2 years of service:

• Defence/ paramilitary personnel drawing salary through Punjab National Bank
• Serving or non-serving defence personnel under the Rakshak Plus Scheme of PNB

For this category, the credit score is of minimum importance. You can apply for this loan and enjoy an interest rate of 11.40% (floating) or 12.40% (fixed).

Category B: Central/ State Government employees

If come under any one of the following:

• Government employee with salary account with PNB
• Central Government gazetted officer

Here, if approved, the interest rate depends on your credit score. However, the silver lining for a poor credit score individual is that you can get a loan. Interest rates for different credit scores are given below:

Category C:

If you are an employee utilising the check-off facility, you can get the following interest rates depending on your credit score:

Principal Amount: Maximum of 24 times of gross monthly salary or Rs. 20 Lakhs (whichever is lower)

PNB Doctor’s Delight

Punjab National Bank arranges this loan for individuals leading the life of a Doctor. Like the defence/ paramilitary personnel, the credit score is less critical in sanctioning. 

You can expect a floating interest rate of 11.40% and a fixed rate of 12.40% for this loan.

You can have one more advantage of a 1% concession on the interest rate if you are:

• Maintaining the salary account with PNB
• Maintaining receipt collection account with PNB
• If you present a tangible collateral security covering the loan amount

Principal Amount: Rs. 2 Lakhs to 20 Lakhs or 24 times monthly gross income (whichever is lower)

Other eligibility criteria include:

Minimum gross annual income of Rs. 5 Lakh

Airtel Flexi Credit

Apart from telecommunications, Airtel also provides personal loans to its customers. Airtel has tied with several lenders to offer attractive and competitive offers in the market. Though they have not mentioned any minimum credit score, they have mentioned that individuals with bad scores can apply. One of the lenders offering the offer is Moneyview, which has set the minimum credit score to 650 for personal loans. 

So you can take a chance.

• Principal Amount: Rs. 10,000 to Rs. 9 Lakhs
• Interest: starting from 11.5%
• Tenure: 3 to 60 months

Fibe Personal Loan

Fibe becomes attractive to applicants with low CIBIL credit scores, as Fibe does not follow the conventional credit scoring route. While most lenders choose credit agencies to check your creditworthiness, Fibe utilises an alternative method. They use alternative credit scoring to cater their loan offers to all their customers and approve based on this score. Fibe claims they have approved up to 98% of their applications without hassle.

Since they use an alternative scoring scale based on alternative data, you may be approved with a personal loan. 

What alternative data are they using?

Alternative credit data is any data not directly connected to the customer’s credit behaviour. It acquired data from alternative credit from data sources such as:

• Utility bill payments
• Insurance
• Social media
• Bank History
• Buy Now Pay Later

The credit behaviour and ability to repay the loan are calculated using a machine learning approach, making the process more convenient.

Other details of the Fibe Personal Loan are as follows:

• Principal amount: Up to 5 Lakhs
• Interest rate: starting from 16%
• Tenure: 3-36 months

Union Bank Ashiyana Personal Loan

Union Bank considers a CIBIL score of 700 as the benchmark between good and poor credit scores. As long as your score does not go below 650, you should have a chance to get that loan approved.

You can apply for the Union Bank Ashiyana Personal Loan if you already have a home loan. This loan allows you to borrow up to Rs. 15 Lakhs for personal purposes.

Though the home is not considered a security for this loan, the bank won’t release the property until the home and personal loan are paid back. So, in a way, it does act as a collateral. So, that increases your chance of getting the personal loan approved.

Other eligibility criteria are maintaining a satisfactory repayment record and having no overdues in the home loan account.

Things to keep in mind:

• Always review your credit score and history before applying for a loan. 
• Check your eligibility before making a hard enquiry for a personal loan. As hard enquiries affect credit scores, rejection of a loan can put you in a worse spot.
• Rather than trying to raise your credit score, it is better not to let it fall in the first place. But it is easier said than done. 
• Take credit that you are sure you can manage. Keep the used credit below 30% of the total available credit.

A low CIBIL score can pose challenges when seeking a personal loan, but it's not the end of the road. With options like PNB Sahyog Rin, PNB Doctor’s Delight, Airtel Flexi Credit, Fibe Personal Loan, and Union Bank Ashiyana Personal Loan, you can find solutions tailored to your financial situation. Each loan offers different terms and conditions, allowing you to choose the best fit based on your employment, income, and credit history. Remember to check your eligibility before applying and take steps to improve your credit score over time, ensuring smoother approval processes in the future.

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