Which banks give personal loans with bad credit in India?

Credit Score (CIBIL Credit Score – Read detailed review) is the most important criteria which financials institutions review while giving personal loans to applicants. Normally, we have seen personal loan applications approved with a CIBIL score is 750 or more.  However, low or bad credit rating effectively ruins your chances of getting a personal loan from a financial institution.

The credit score is not the only parameter, read our article which talks about other factors impacting your loan application.

Options for bad credit personal loans?

As you know from our in-depth review of Personal loans both banks and NBFC’s{Non-Banking Financial Companies} can offer personal loans. Banks being completely under RBI guidelines adhere to strict guidelines(including credit score check) while approving loans whereas NBFC’s have more flexibility. We have seen that NBFC’s like Fullerton India, Bajaj Financial Service etc are more likely to approve loans of applicants with bad credit score. It’s worth noting that the NBFC’s charge higher rate of interest from applicants of bad credit score.

I have bad credit, how to I prepare for a personal loan in future?

If you are not in a hurry there is one way to improve your credit score. Apply for a secured platinum credit card offered by ICICI bank. The concept is that you get a credit card against your fixed deposit in ICICI bank and then you make regular-complete payment of your credit cards (for 6-7 months) and this will improve your credit score.

Also, if you had a genuine reason for low credit score – like a medical emergency, losing job etc then you should explain the lender the reason which led to low credit score. We have seen that lenders typically listen to the reason especially if the reason for the low credit score is over two years old and you have all your ITR’s.


Credit scores are being more & more important. Hence it’s important that once you get your personal loan, you make the EMI payments on-time.