Loan Options with Low CIBIL Score in 2025

Introduction

If you’re struggling with a low CIBIL score in 2025, getting a loan might feel impossible—but it isn’t. While your credit history can affect approval chances, there are still legitimate ways to access funds and improve your financial standing. This guide explores loan options available to low-credit borrowers in India, how these impact your credit, and smart steps to boost your CIBIL score.

🔒 Disclaimer: This article is for informational purposes only. Always consult a certified financial advisor or your lender before making financial decisions.

What Is a CIBIL Score and Why It Matters

CIBIL (Credit Information Bureau (India) Limited) score is a 3-digit number (range: 300–900) that reflects your creditworthiness. Most lenders consider a score above 750 as “good.” A low score (below 650) may limit your options but doesn’t eliminate them.

🔗 Check your CIBIL score for free on CIBIL.com

Best Loan Options for Low CIBIL Score in India (2025)

1. Gold Loan

How It Works: Pledge gold as collateral to borrow money.
Eligibility: Acceptable gold purity, minimal paperwork.
✅ Pros: Instant approval, low credit dependency.
❌ Cons: Risk of asset loss if unpaid.

🔗 SBI Gold Loan Official Page

2. Loan Against Fixed Deposit (FD)

How It Works: Borrow up to 90% of your FD value.
✅ Pros: Lower interest rates, no credit check.
❌ Cons: FD remains locked as collateral.

🔗 HDFC Bank FD Loan Details

3. NBFC Personal Loans

How It Works: Non-Banking Financial Companies offer relaxed terms.
Examples: Bajaj Finserv, Tata Capital, MoneyTap.
✅ Pros: Fast processing, minimal paperwork.
❌ Cons: Higher interest rates (can exceed 24% annually).

🔗 Bajaj Finserv Personal Loan

4. Secured Credit Cards

How It Works: Linked to a fixed deposit; great for rebuilding credit.
Examples: ICICI Bank, Axis Bank.
✅ Pros: Boosts CIBIL score if used properly.
❌ Cons: Requires initial deposit.

🔗 ICICI Bank Secured Credit Card

5. Co-Applicant or Guarantor Loans

Apply jointly with someone who has a good credit score.
✅ Pros: Better approval chances, lower rates.
❌ Cons: Guarantor is financially responsible if you default.

6. Peer-to-Peer (P2P) Lending

Platforms like Faircent connect borrowers directly with lenders.
✅ Pros: Personalized lending terms.
❌ Cons: Higher risk, varied interest rates.

🔗 Faircent – P2P Lending

When You Should NOT Take a Loan

✖ To repay another loan
✖ If lender isn’t RBI-registered
✖ If interest rates are 30%+
✖ If you’re promised “Guaranteed Approval” or “Zero Credit Check”

Always verify lender registration on the RBI Official Site.

Tips to Improve Your CIBIL Score

📌 Pay all EMIs and bills on time
📌 Keep credit utilization below 30%
📌 Avoid frequent loan applications
📌 Dispute errors in credit reports
📌 Use secured credit cards responsibly

📈 Regularly monitor your score at CIBIL.com.

Alternatives If You Don’t Qualify

💡 Buy Now, Pay Later (BNPL) services
💡 Salary Advance Loans (via HR or apps like EarlySalary)
💡 Credit Union Loans (co-op societies)

Final Thoughts

Getting a loan with a low CIBIL score is tough—but not impossible. Choose safe, regulated lenders. Avoid scams and focus on rebuilding your credit for long-term financial health.

✅ Author Bio

Sandeep is the founder of PulseWire and a finance content researcher focused on empowering Indian readers with data-backed financial knowledge. While not a certified financial planner, Sandeep ensures all articles follow evidence-based guidance from official sources like RBI, CIBIL, and leading Indian banks.