Best Personal Loans for Low CIBIL Score

Your CIBIL score is a key factor in determining your personal loan eligibility and interest rate. Borrowers with low CIBIL credit scores may have their personal loan applications rejected by a bank, or are otherwise charged very high rates of interest to account for the risk of lending. To help you find a personal loan and minimise your total cost of borrowing, we've highlighted the best personal loans in India for low CIBIL scores below.

Our Top Picks for Personal Loans for Low CIBIL Score

Many banks have a minimum CIBIL score requirement of 750, which leaves a lot of potential borrowers unable to avail a personal loan from major lenders. With this gap in the market, fintech companies and non-bank financing companies have begun to offer personal loans to borrowers with low CIBIL scores.

Similarly, some banks have opened personal loan eligibility to borrowers with low CIBIL scores by offering secured personal loans, where collateral is exchanged for personal loan funding. Below, we've listed the best personal loans for borrowers with a low CIBIL score, including each loan's minimum interest rate.

Best Personal Loans for Low CIBIL Score

Best personal loan interest rates for people with low CIBIL score.

Best Personal Loans for Low CIBIL Score

Best personal loan interest rates for people with low CIBIL score.

Best Small Personal Loan Without Cibil Score

Consider this if you seek a small personal loan

Max. Loan Amount Rs. 1 lakh
Processing Fee 3.00%, minimum Rs.500
Loan Tenure 3 to 12 months

If you are seeking a small personal loan up to Rs. 1 lakh and a short loan tenure of 3 to 12 months, Cr.edy is a top lender to consider. Interest rates, processing fees and other charges, and eligibility criteria at Cr.edy are especially generous compared to other personal loan lenders.

Credy personal loans interest rates range between 12.00% and 18.00%, which is close to the market average of 11.67% and 18.95%. Borrowers with low CIBIL scores should expect a higher interest rate closer to 18.00%, but even this is low compared to many other lenders who charge up to 30.00% p.a.

To minimise your total cost of borrowing, it's important to calculate processing fees and other charges. Credy processing fees are 3.00% of the total loan amount — a minimum of Rs. 500 — which is standard in the personal loan market. Additionally, the lender charges only 2.00% of the outstanding loan amount in early repayment fees, which is much lower than other banks who can charge up to 7.00%.

However, late EMI payments will come with a high penalty fee of 8.00% of the EMI amount. If you foresee any difficulties in paying down your personal loan, you should consider a lender that has lower penalty fees around 2.00%.

Duration (Months)Processing FeeEffective Interest RateEMITotal Cost
13.00%12.00%₹ 34,002₹ 37,002
23.00%12.00%₹ 34,002₹ 71,004
33.00%12.00%₹ 34,002₹ 105,006
Based on an Rs. 1 lakh personal loan over a 3 month tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

Best Large Personal Loan Without Cibil Score

Consider this if you want a large personal loan

Min. Loan Amount Rs. 50,000
Max. Loan Amount Rs. 10 lakhs
Processing Fee 2.00%
Loan Tenure 5 years

LoanTap is another fintech platform that provides personal loans to borrowers with low CIBIL scores. The lender's interest rates range between 14.00% and 24.00%, which is relatively higher than the market average. However, LoanTap provides large personal loans up to Rs. 10 lakhs with low processing fees and other charges, making it a worthwhile lender to consider for your personal financing needs.

It's important to note that LoanTap has a high monthly income requirement of Rs. 30,000. This is because borrowers without a CIBIL score are expected to have sufficient funding to prove creditworthiness to their personal loan lender.

In terms of other charges, LoanTap's processing fee is only 2.00% of the total loan amount, which is quite low compared to many banks who charge around 3.00%. Further, there are no prepayment charges on LoanTap personal loans, unless prepayments are made before 6 months. This is a great feature for borrowers who want to pay off their EMIs in a short period of time.

A drawback to the LoanTap personal loan is that it is only available to borrowers who live in certain cities in India, including: Bangalore, Hyderabad, Chennai, Coimbatore, Mumbai, Pune Ahmedabad, Vadodara, Raipur, Bhopal, Indore, Jaipur, Delhi-NCR and Chandigarh. If you live in one of these major cities, you can avail a LoanTap Personal loan between 24 to 36 hours.

Duration (Years)Processing FeeEffective Interest RateEMITotal Cost
12.00%14.00%₹ 23,268₹ 2,79,219
22.00%14.00%₹ 23,268₹ 5,58,438
32.00%14.00%₹ 23,268₹ 8,37,657
42.00%14.00%₹ 23,268₹ 11,16,876
52.00%14.00%₹ 23,268₹ 13,96,095
Based on an Rs. 10 lakhs personal loan over a 5 year tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

Best Secured Personal Loan Without Cibil Score

Some borrowers may not have a credit history or CIBIL score to prove trustworthiness to personal loan lenders. For cases like this, it is usually easier to seek out a loan against securities, where you put down your house or other investment as collateral for a personal loan funding.

SBI is one of the best personal loan lenders in India, but most of their personal loan schemes are tailored to borrowers with a good CIBIL score and credit history. Borrowers without a CIBIL score can still avail an SBI personal loan, but it must be a secured personal loan.

SBI Loan Against Property

Consider this if you are a property or house owner in need of a personal loan

Processing Fee 1.00%
Loan Tenure 15 years

The SBI Loan Against Property (LAP) can be used for education, marriage, healthcare and any other non-business-related expenditure. By putting down your home or property as collateral, you can avail a personal loan amount up to the agreed upon percentage of your property value.

The SBI Loan Against Property charges low interest rates and processing fees, making it a top choice for borrowers without a CIBIL score. SBI rates are charged anywhere between 8.80% and 9.65%, though the final rate will be determined based on your property value, income, and age. For other charges, you can expect a 1.00% processing fee, which is one of the lowest of any lender in our study.

The SBI LAP has very flexible eligibility criteria, allowing many different types of borrowers to avail personal loan funding. You must be at least 18 years old and no older than 70 years of age by the time of loan maturity. Therefore, both young and older borrowers are eligible for a SBI Loan Against Property with a loan tenure up to 15 years.

SBI Personal Loans Against Securities

Consider this if you need a personal loan without a CIBIL score

Min. Loan Amount Varies per scheme.
Max. Loan Amount Varies per scheme.
Processing Fee Up to 1.00%

Some borrowers with a good financial standing may have old, derogatory marks on their credit report that keeps their CIBIL score low. In this case, Loans Against Securities are the best choice to secure personal loan funding without the need to have a high CIBIL score.

For borrowers who are seeking a secured personal loan with the lowest interest rates, the SBI Loans Against Securities scheme offers a range of collateral options including: Shares, Mutual Funds, Sovereign Gold Bond, Time Deposit, and Dual Advantage Fund.

Below, you can find brief descriptions of each SBI Loan Against Securities, as well as the effective interest rates of each personal loan option.

SBI Loans Against Securities TypesShort DescriptionEffective Interest Rates

Loans Against Shares

Avail up to Rs. 20 lakhs. 50% margin amount.9.75%

Loans Against Mutual Fund Units

Avail up to Rs. 20 lakhs against your equity with a 50% margin. Avail up to Rs. 500 lakhs against a fixed maturity plan with a 15% margin.9.75%

Loans Against Sovereign Gold Bond

Avail up to Rs. 20 lakhs against your SGB. 35% margin.9.25%

Loans Against Time Deposit

Avail up to Rs 5 crore against a fixed deposit. 90% margin.8.25% to 10.15%

Loans Against SBI Dual Advantage Fund

Avail up to Rs. 20 lakhs. 50% margin.9.75%

How to Choose a Personal Loan

There are many factors to consider when choosing a personal loan. In order to minimise your total cost of borrowing, charges like your personal loan interest rate and processing fee should be as low as possible. Additionally, consider factors like loan amount, loan tenure, and loan schemes in order to avail the best home loan option for your financing needs.

Read More: How to Find the Best Loan

Am I Eligible for a Personal Loan?

Before you apply for a personal loan, you first have to make sure that you are eligible. Your personal loan eligibility is determined by your credit history, job profile, and age, amongst other factors. Your bank or personal loan lender will consider all of these factors before deciding if, and how much, loan amount you are eligible for.

Many banks offer personal loans to salaried employees only. For self-employed eligibility, you will have to find specific personal loans tailored to your financial situation. Similarly, banks will offer personal loan schemes to low-income earners, pensioners, NRIs, and other types of applicants.

Read more: Personal Loan Basics

How to Apply for a Personal Loan

When you apply for a personal loan, you will have to fill out an application online or in person. You may find that your loan lender is willing to negotiate from the advertised interest rate, which highlights the importance of comparing several rates before choosing a lender.

Below, you will find examples of required documents needed to complete your personal loan application.

Examples Documents Required for Personal Loan Application

Required DocumentSalaried ApplicantNon-Salaried Applicant
Proof of IdentityPassport, Drivers License, PAN
Proof of AddressPassport, utility bill
Proof of IncomeBank statement, Salary accountAudited financials, bank statement

FAQ

Borrowers with a low CIBIL score can still avail a personal loan, but it will be at the cost of higher interest rates. Additionally, you can opt for a Loan Against Property or other type of Loan Against Securities that allows you to put down collateral in exchange for personal loan funding.

The minimum CIBIL score of a personal loan for most banks is 650. Though, many banks prefer you to have at least 750 to be eligible for a personal loan.

Borrowers with a CIBIL score of 550 should consider availing a personal loan from a fintech company like Cr.edly or LoanTap. Fintech platforms and non-bank financing companies offer more options to borrowers with low incomes and CIBIL scores than major banks do.

A CIBIL score of 650 is needed to be eligible for an SBI personal loan. But to minimise your total coast of borrowing with the best interest rates, you should have a CIBIL score of at least 750.

Your CIBIL score is calculated by different factors like your credit history and credit utilization. To find out your CIBIL score, you will have to get a credit history check from a verified company.

Methodology

In order to identify the best personal loan interest rates in India, we researched and analysed more than 80 loans from 35 lenders, which are listed in the table below.

Lenders Reviewed in ValueChampion's Study
Aditya Birla CapitalAxis BankBajaj FinservBank of Baroda
Bank of IndiaBank of MaharashtraCanara BankCentral Bank of India
CitibankCredyFederal BankFullerton India
HDB Financial ServicesHDFC BankHSBC BankICICI Bank
IDBI BankIDFC First BankInCredIndia Infoline
Indian BankIndian Overseas BankIndusInd BankKarur Vysya Bank
Kotak Mahindra BankLoanTap Financial TechnologiesRBL BankSBI
South Indian BankStandard CharteredTamilnad Mercantile BankTata Capital
UCO BankUnion Bank of IndiaVijaya BankYes Bank

After gathering cost data, including interest rates and fees, from these banks, we created an algorithm that compares the cost of borrowing of each loan. Our calculations include mandatory processing and administrative fees, interest costs and applicable promotions. We did not include fees for late or early payments, instead, we assumed that the borrower would make payments on time. Because banks offer loans of various tenures and advertise ranges of interest rates, we calculated borrowing costs based on all possible scenarios in order to develop our list above.

Natalia Sanchez-Kumar

Natalia Sanchez-Kumar is a Junior Research Analyst at ValueChampion, specialising in home loans in India. She is a History graduate of New York University and has worked in the area of social impact, Future of Work and socio-technological research in the US and India. She has co-authored policy proposals alongside the International Labour Organisation in Sri Lanka and the Maldives, as well as hosted a data privacy conference with Facebook in New Delhi.