Personal Loan with Bad Credit – Everything You Need to Know

Rupesh April 09, 2025

Personal Loan with Bad Credit in 2025 – Best Options & Tips for Approval

Finding a personal loan with bad credit can feel impossible, but it’s not! Whether your score is below 650 or even under 600, several lenders offer loans to individuals with low credit scores—especially in 2025 when fintech options are expanding fast.

What is Considered a Bad Credit Score?

In India, a CIBIL score below 650 is generally considered bad or poor credit. However, some lenders still offer loans even with scores as low as 550, depending on your income and repayment capacity.

Can You Get a Personal Loan with a Bad Credit Score?

Yes, you can. While traditional banks may reject applications, many NBFCs and online lenders offer bad credit personal loans at slightly higher interest rates or require a co-applicant.

Top Lenders Offering Personal Loans for Bad Credit in 2025

MoneyTap: Offers credit line-based personal loans with flexible repayment.
CASHe: Short-term personal loans with minimum documentation.
EarlySalary: Ideal for salaried individuals with moderate credit scores.
PaySense: Offers EMI-based personal loans with fast approval.
Home Credit: Great for low credit score borrowers with steady income.

Tips to Improve Your Loan Approval Chances

Apply for smaller loan amounts
Include a co-applicant with a good credit score
Choose NBFCs or fintech lenders instead of traditional banks
Maintain a stable income and job history
Consider secured loans (with collateral)

What Are the Risks of Taking a Loan with Bad Credit?

Some risks include higher interest rates, limited repayment flexibility, and chances of falling into a debt trap. Always compare terms and read the fine print before signing.

Alternatives to Personal Loans with Bad Credit

Gold Loans
Peer-to-peer lending
Credit card EMI conversion
Borrowing from family or employer

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Conclusion

Getting a personal loan with bad credit is possible in 2025 if you choose the right lender and approach. Always borrow responsibly, improve your credit habits, and compare multiple offers before deciding. Bad credit isn't the end – it’s a chance to rebuild stronger!