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Introduction
Do you need money urgently but have a bad credit score? Don’t worry! You can still get a loan. Moreover, many people in India face this problem daily. Besides, there are now many new ways to borrow money.
Banks may say no to you. However, other lenders will help you. Furthermore, these lenders check if you have a job and earn regularly. This guide will show you simple steps to get a loan fast. Additionally, you will learn how to improve your chances. Therefore, let’s start learning about loans and credit scores.
What Is a Bad Credit Score
A credit score is like a report card for money matters. Moreover, it is a number between 300 and 900. This number shows if you are good at repaying loans.
In India, we call it a CIBIL score. A score below 650 is considered bad. Therefore, banks feel scared to lend you money. However, a score above 750 is very good. Meanwhile, scores between 650 and 750 are fair.
Your score becomes bad when you miss EMI payments. Additionally, not paying credit card bills on time hurts your score. Besides that, taking too many loans together also damages it.
Nevertheless, even with a bad score, you can get help. As mentioned earlier, many new lenders are ready to help people like you.
Why Credit Score Matters
Your credit score decides if you will get a loan or not. Moreover, it also decides how much interest you will pay. Furthermore, lenders want to know if you will return their money. Therefore, they check your past behavior.
A good score means you get loans easily. Additionally, you pay less interest. Meanwhile, a bad score makes everything harder and more expensive. Besides, banks offer bigger amounts to people with good scores.
Nevertheless, understanding this helps you make better choices. As mentioned earlier, you can still get money with bad credit.
Loan Options with Bad Credit in India
You have several ways to get money even with bad credit. Moreover, many new companies help people in your situation.
Personal Loans from Apps
Many new companies give personal loans through mobile apps. Moreover, they check if you have a steady job. Additionally, they see if money comes into your bank regularly. The interest rate will be higher than that of normal loans. Nevertheless, you get money fast.
Peer-to-Peer Lending
This means borrowing from other people instead of banks. Moreover, websites connect you with lenders. Therefore, they may help even if your score is bad.
Gold Loans
If you have gold jewelry, you can get a loan against it. Moreover, this is the easiest way for those with bad credit. Furthermore, lenders only check your gold’s purity and weight. Besides, you can get up to 75% of your gold’s value. Meanwhile, interest rates are much lower than personal loans.
| Loan Type | How Fast | Interest Rate | Security Needed |
| App Loan | 1-2 days | 15%-30% | No |
| P2P Lending | 3-7 days | 12%-28% | No |
| Gold Loan | Same day | 8%-18% | Yes – Gold |
| Property Loan | 7-15 days | 9%-15% | Yes – House or property |
Instant Loans for Bad Credit
Instant loans are very popular now. Moreover, you can get money in just hours. Furthermore, many apps give fast loans to people with bad credit.
Many apps on your phone give instant loans. Moreover, these apps are very easy to use. Besides, everything happens on your phone. Similarly, you apply and get approved in minutes. Therefore, money reaches your bank very fast.
However, be careful about interest rates. Moreover, some apps charge very high interest. As mentioned earlier, read everything carefully before accepting.
The loan amounts start from ₹1,000 to ₹5 lakh. Furthermore, repayment time is usually 3 to 24 months. Nevertheless, borrow only what you can repay easily.
Secured Loans for Low Credit
Secured loans are easier to get with bad credit. Moreover, you give something valuable as security. Furthermore, this makes lenders feel safe.
Loan Against Property
If you own a house or land, you can get a loan against it. Moreover, these loans give large amounts. Furthermore, interest rates are lower. Additionally, you can get 15-20 years to repay. Meanwhile, monthly payments become small and easy.
Loan Against Fixed Deposit
If you have a fixed deposit, you can borrow against it. Moreover, you can get up to 90% of your FD amount. Furthermore, there is no credit check. Besides, you get instant approval.
Vehicle Loans
You can get loans by keeping your car or bike as security. Moreover, lenders give up to 70% of your vehicle’s value. Besides, you can still use your vehicle daily. Therefore, make sure you can afford monthly payments.
NBFCs and Digital Lenders
NBFC means Non-Banking Financial Company. Moreover, they give loans but are not banks. Furthermore, they help people with bad credit more easily.
NBFCs have easier rules than banks. Moreover, they look at your current situation more than past mistakes. Additionally, the approval process is much faster. Besides, many NBFCs have apps for easy application.
Popular NBFCs include Bajaj Finance and Tata Capital. Furthermore, Muthoot Finance is good for gold loans. Digital lenders like MoneyTap, EarlySalary, and KreditBee focus on fast approvals. Nevertheless, always check if the company is trustworthy.
Tips to Get Loan Approval
Getting approved needs some planning. Moreover, these tips will help you a lot.
Show Regular Income
Lenders want proof you can repay. Therefore, show your salary slips or bank statements. Besides, a good income makes lenders trust you more. As mentioned earlier, current income matters more than past mistakes.
Apply with a Co-Applicant
Ask someone with good credit to apply with you. Moreover, this makes approval easier. Furthermore, their good record balances your bad score. However, make sure this person trusts you. Similarly, they become equally responsible.
Ask for Smaller Amounts
Don’t ask for very big loans. Moreover, lenders feel safer giving smaller amounts. Furthermore, repaying a small loan helps build trust. Additionally, you improve your credit for the future.
Offer Security
If you have gold or property, mention it. Moreover, offering security makes approval almost certain. Furthermore, you get lower interest rates. Nevertheless, only pledge what you won’t lose.
Documents Required
Having papers ready makes getting loans easier. Moreover, collect these before applying.
Identity Proof: Aadhaar card, PAN card, passport, or voter ID.
Address Proof: Recent utility bills, Aadhaar card, or rental agreement.
Income Proof: Salary slips for 3-6 months, bank statements, or tax returns for business owners.
Bank Statements: 6-12 months showing your transactions and income.
Security Papers: Gold jewelry, property documents, or vehicle registration (if needed).
As mentioned earlier, keeping documents ready saves time. Therefore, prepare everything before applying.
Improve Credit Score After a Loan
Getting the loan is just the beginning. Moreover, use this chance to fix your credit score.
Always Pay on Time
Never miss your EMI payment. Moreover, paying on time improves your score the most. Furthermore, set up automatic payments. Additionally, even one missed payment hurts badly. Meanwhile, consistent payments rebuild your credit.
Use Credit Cards Carefully
Don’t spend more than 30% of your card limit. Moreover, pay your full bill every month. Besides, this shows you are responsible.
Don’t Take Many Loans
Each loan application affects your score. Moreover, wait at least 6 months between applications. Furthermore, focus on repaying current loans first.
Check Your Report Regularly
Check your credit report every few months. Moreover, fix any mistakes you find. Additionally, you get one free report yearly. Similarly, many apps show scores for free.
Nevertheless, only borrow when you really need money. As mentioned earlier, manage what you have responsibly.
Conclusion
Getting an instant loan with bad credit is completely possible in India. Moreover, you now know many ways to get money quickly. Furthermore, NBFCs, digital apps, and secured loans offer great alternatives.
As mentioned earlier, borrow responsibly. Additionally, only take what you need and can repay. Meanwhile, use this loan to improve your situation. Your bad credit score is not permanent. Furthermore, timely payments will improve it.
Always compare lenders before deciding. Besides, check interest rates carefully. Similarly, read all terms and conditions. Therefore, stay positive and take one step at a time toward better financial health. Also, WeRize is a Fintech company that provides personal and business loans to people with low credit scores. If you are looking for one, reach out to a WeRize Partner.
FAQs
1. Can I get a loan with a credit score below 600?
Yes, you can still get a loan with a score below 600. Moreover, several NBFCs and digital lenders specialize in such cases. Furthermore, secured loans like gold loans don’t require good credit scores. However, expect higher interest rates compared to borrowers with good credit.
2. How fast can I get an urgent loan with bad credit?
Digital lenders and fintech apps can approve loans within hours. Moreover, disbursement often happens the same day. Meanwhile, traditional lenders might take 2-7 days. Therefore, choose digital platforms for truly urgent needs.
3. What is the maximum loan amount I can get with bad credit?
This depends on your income and the lender. Moreover, unsecured loans typically range from ₹10,000 to ₹5,00,000. Meanwhile, secured loans against property or gold can be much higher. Therefore, your collateral value and income determine the maximum amount.
4. Will taking a loan with bad credit make my score worse?
Initially, the hard inquiry might slightly lower your score. However, making timely payments will improve your score over time. Moreover, successfully repaying this loan demonstrates creditworthiness. Therefore, responsible borrowing actually helps rebuild your credit.
5. Are online lenders safe for people with bad credit?
Yes, but you must verify the lender’s credentials. Moreover, check if they’re registered with the RBI or recognized authorities. Furthermore, read reviews and complaints before applying. Besides, avoid lenders asking for upfront fees before loan approval.
6. What interest rate should I expect with bad credit?
Interest rates typically range from 15% to 35% for unsecured loans. Moreover, secured loans offer lower rates between 8% to 20%. Meanwhile, rates vary based on lender, loan amount, and your specific profile. Therefore, compare multiple offers before deciding.
7. Can I get a loan without income proof if I have bad credit?
This is very difficult. Moreover, lenders need assurance of repayment ability. However, some digital lenders use alternative data to verify income. Meanwhile, showing bank statements with regular deposits might help. Nevertheless, having proper income proof significantly improves your chances.
8. How can I improve my credit score quickly?
Pay all existing EMIs on time without fail. Moreover, reduce your credit card balances below 30% of the limit. Furthermore, avoid applying for new credit for at least six months. Besides, check your credit report for errors and dispute them. As a result, you might see improvement in 3-6 months.
