Best Personal Loan for Low Credit Score in India in 2025

Struggling to get a personal loan because of a low credit score? Don’t worry, bhai! A low CIBIL score (below 650) doesn’t mean you’re out of options. In India, plenty of banks and NBFCs (Non-Banking Financial Companies) offer personal loans tailored for folks with less-than-perfect credit. In this guide, we’ll break down the best personal loan options for low credit scores in 2025, how to apply, and tips to boost your chances of approval. Let’s dive in!

Why Low Credit Score Matters for Personal Loans

Your credit score is like your financial report card. It tells lenders how reliable you are with repaying loans. A low score (say, 500-650) signals higher risk, so banks might hesitate or charge higher interest rates. But don’t lose hope! Many lenders in India understand that life happens—missed EMIs, job loss, or medical emergencies can dent your score. They’ve got your back with special loan schemes.

Top Lenders Offering Personal Loans for Low Credit Scores

Here’s a list of trusted lenders in India who don’t slam the door on low credit score applicants. These are based on 2025 trends and customer reviews:

1. Bajaj Finance
   • Interest Rate: 13-16% p.a.
   • Loan Amount: Up to ₹25 lakh
   • Why Choose: Flexible eligibility, quick online approval, and minimal documentation. They often look beyond CIBIL if you have a steady income.
   • Pro Tip: Apply through their app for faster processing.
2. MoneyTap
   • Interest Rate: 13-18% p.a.
   • Loan Amount: ₹1,000 to ₹5 lakh
   • Why Choose: Offers a revolving credit line, so you only pay interest on what you use. Perfect for salaried folks with low scores.
   • Pro Tip: Link your Aadhaar and PAN for quick verification.
3. PaySense
   • Interest Rate: 14-20% p.a.
   • Loan Amount: Up to ₹5 lakh
   • Why Choose: Fully digital process, no strict CIBIL requirement, and approvals within 24 hours.
   • Pro Tip: Show proof of regular income to improve approval chances.
4. HDFC Bank (Pre-approved Loans)
   • Interest Rate: 11-15% p.a. (higher for low scores)
   • Loan Amount: Up to ₹40 lakh
   • Why Choose: If you’re an existing HDFC customer, they might offer pre-approved loans despite a low score.
   • Pro Tip: Check their website for pre-qualified offers.
5. IndusInd Bank
   • Interest Rate: 12-18% p.a.
   • Loan Amount: Up to ₹15 lakh
   • Why Choose: Flexible repayment tenures (up to 5 years) and relaxed CIBIL criteria for salaried applicants.
   • Pro Tip: Apply with a co-applicant to strengthen your case.

Note: Interest rates and loan amounts vary based on your profile, income, and lender policies. Always compare offers before signing up.

Eligibility Criteria for Low Credit Score Loans

While each lender has its own rules, here’s what you generally need:

• Age: 21-60 years
• Income: Minimum ₹15,000/month (salaried) or ₹3 lakh/year (self-employed)
• Documents: Aadhaar, PAN, bank statements, salary slips, or ITR
• CIBIL Score: Some lenders accept scores as low as 550, but higher is better

Having a stable job or adding a co-applicant (like a spouse or parent) can boost your approval chances.

Tips to Get Approved with a Low Credit Score

1. Show Consistent Income: Lenders love stability. Show 6-12 months of steady income through bank statements or salary slips.
2. Clear Existing Debts: Pay off smaller EMIs or credit card dues to improve your debt-to-income ratio.
3. Opt for a Smaller Loan: Don’t ask for ₹10 lakh right away. Start with ₹50,000-₹1 lakh to build trust.
4. Choose NBFCs Over Banks: NBFCs like Bajaj or PaySense are more flexible than traditional banks like SBI.
5. Improve Your CIBIL Score: Pay EMIs on time, avoid multiple loan applications, and check your CIBIL report for errors.

Things to Watch Out For

• High Interest Rates: Low credit score loans often come with 15-20% interest rates. Compare offers to avoid overpaying.
• Scams: Beware of fake lenders asking for upfront fees. Stick to RBI-registered lenders.
• Repayment Tenure: Longer tenures mean lower EMIs but more interest overall. Balance it out.

Alternatives to Personal Loans

If loans aren’t working out, consider these:

• Secured Loans: Gold loans or loans against FD have lower interest rates and easier approval.
• Peer-to-Peer Lending: Platforms like Faircent connect you with individual lenders.
• Borrow from Family: It’s interest-free and no CIBIL check needed!

Final Thoughts

A low credit score isn’t the end of the road. With lenders like Bajaj Finance, MoneyTap, and PaySense, you can get a personal loan tailored to your needs in 2025. Just make sure to compare interest rates, read the fine print, and work on improving your CIBIL score for better deals in the future. Need funds for a medical emergency, wedding, or debt consolidation? Start with a small loan, repay on time, and watch your financial journey get back on track!

Disclaimer: Always check the lender’s terms and conditions before applying. Rates and eligibility may change based on RBI guidelines.