Here’s a detailed article on Personal Loan for Credit (Bad Credit or Credit Score Issues) —
💳 Personal Loan for Bad Credit: Can You Still Get One?
Having a bad credit score can make it tough to get loans from banks and financial institutions. But it doesn’t mean you’re out of options. With the rise of fintech platforms and NBFCs, many lenders are now offering personal loans for bad credit—though with certain conditions and higher interest rates.
In this guide, we’ll cover everything you need to know about getting a personal loan with bad credit, including eligibility, where to apply, pros & cons, and smart tips to get approved.
📌 What is a Bad Credit Score?
A credit score is a three-digit number (usually between 300 and 900) that reflects your creditworthiness.
750+ – Excellent
650–749 – Good
600–649 – Fair
Below 600 – Poor
If your score is below 650, most traditional banks may reject your personal loan application or offer loans at very high interest rates.
✅ Can You Get a Personal Loan with Bad Credit?
Yes, you can. But getting a personal loan with bad credit depends on:
Your current income
Employment stability
Loan amount requested
Presence of any co-applicant or guarantor
The type of lender (bank, NBFC, or fintech)
NBFCs and online platforms are generally more flexible than traditional banks when it comes to approving loans for people with low CIBIL scores.
📝 Who Offers Personal Loans for Bad Credit?
Here are the three main types of lenders:
- NBFCs (Non-Banking Financial Companies)
Examples: Bajaj Finserv, Tata Capital, IndiaLends
Easier approval for lower scores
Higher interest rates
- Fintech Loan Apps
Examples: KreditBee, PaySense, CASHe, Navi
Instant loans based on income and PAN
Disbursal within minutes
- Peer-to-Peer (P2P) Lending Platforms
Examples: LenDenClub, Faircent
Direct loans from investors to borrowers
Slightly lenient terms
📄 Documents Required
Despite a bad credit score, you can still qualify for a loan if you provide:
Aadhaar card
PAN card
Salary slips or bank statement (last 3–6 months)
Employment proof or business proof
Photograph/Selfie
Some platforms offer loans with minimal documentation, especially if you apply through mobile apps.
📉 How a Bad Credit Score Affects Your Loan
Criteria Good Credit (750+) Bad Credit (<650)
Interest Rate 10% – 15% 18% – 36% or more
Loan Amount ₹50,000 – ₹25 Lakhs ₹5,000 – ₹5 Lakhs
Approval Chances High Medium to Low
Processing Time Fast Slower
Collateral Requirement No Maybe (some cases)
🔝 Top Personal Loan Apps for Bad Credit in India (2025)
App Name Loan Amount Credit Score Required Disbursal Time
KreditBee ₹1,000 – ₹3 Lakhs 600+ or even no CIBIL 5 – 30 mins
PaySense ₹5,000 – ₹5 Lakhs 650+ preferred 1 – 24 hrs
CASHe ₹7,000 – ₹4 Lakhs 600+ Same day
Money View ₹10K – ₹5 Lakhs 600+ 24 – 48 hrs
LenDenClub ₹25K – ₹10 Lakhs Flexible 1 – 2 days
💰 Interest Rates & Charges
Personal loans for bad credit come with higher interest rates and processing fees:
Interest Rate: 18% – 36% per annum
Processing Fee: 2% – 5%
Prepayment Charges: 2% – 4% (if any)
Late Fees: ₹500 – ₹1,000 or 2% per month
Note: Always read the loan agreement carefully before signing.
🧠 Smart Tips to Get Loan Approval with Bad Credit
- Apply for a smaller amount (e.g. ₹10,000 – ₹50,000) to improve approval chances.
- Show stable income (salary slips, regular deposits in bank).
- Consider applying with a co-applicant or guarantor.
- Use a loan app that accepts low credit scores or no CIBIL.
- Pay off existing debts to improve your credit profile.
- Avoid applying to multiple lenders at once (hurts your score).
🔄 Improve Your Credit Score While Repaying the Loan
Once you get the loan, repay EMIs on time to rebuild your credit score. Even a small loan paid on time can:
Increase your CIBIL score
Make you eligible for larger loans in the future
Help you negotiate lower interest rates
⚠️ Things to Avoid
Loan Sharks or Unregistered Apps: They may charge hidden fees or misuse your data.
Over-borrowing: Only borrow what you can repay.
Ignoring terms: Understand the penalty clauses and interest before agreeing.
📚 Conclusion
Getting a personal loan for bad credit is possible—but it comes with challenges. With the right lender and careful planning, you can not only get the funds you need but also rebuild your credit score for future financial freedom.
Whether you’re facing a financial emergency or trying to consolidate debt, these loans can be a smart option—if used responsibly. Always compare multiple lenders, check their credibility, and read user reviews before proceeding.