Short answer: With a poor credit score, the cheapest money usually comes from something you already own: a gold loan, a loan against a fixed deposit, mutual funds or shares, or an employer salary advance. Adding a co-applicant with good credit can also open regular personal loans. Unsecured loans for low scores do exist, but they cost much more, so borrow only from RBI-regulated lenders, read the Key Facts Statement and avoid taking one app loan to repay another.
Last updated: 13 October 2026.
Why a poor score makes money harder (and costlier) to get
A low score tells lenders you have missed payments, settled a loan, used too much credit or applied too often. They respond by refusing, lending less, asking for security or charging a higher rate. The table shows how much that rate difference matters on a ₹1,00,000 loan repaid over 24 months:
| Type of borrowing | Illustrative annual rate | EMI | Total interest |
|---|---|---|---|
| Secured (e.g. gold loan) | 12% | ₹4,707 | about ₹13,000 |
| Unsecured, low-score lender | 36% | ₹5,905 | about ₹41,700 |
Same amount, same tenure, but more than three times the interest. That is why the first question is always: can I secure this loan with something I own? Our guide to secured loans explains the trade-off.
Option 1: Borrow against an asset you already own
Because the lender holds security, your credit score matters far less.
| Asset | How it works | Watch out for |
|---|---|---|
| Gold jewellery or coins | Lender values the gold and lends a share of it; RBI caps the loan-to-value | Auction if you default; check valuation and charges. Use the gold loan calculator. |
| Fixed deposit | Overdraft or loan from the same bank, usually a little above the FD rate | Limited to a percentage of the FD |
| Mutual funds or shares | Units are pledged, not sold; you keep any returns | Margin call if markets fall. See loan against mutual funds. |
| Life insurance policy | Loan against the surrender value of traditional policies | Unpaid loan reduces the claim or maturity amount |
Example: Meena (illustrative) has ₹1,50,000 of gold jewellery and needs ₹80,000 for six months. A gold loan at around 12% a year costs her roughly ₹4,800 in interest if she repays on schedule, far less than an unsecured low-score loan. The risk is real, though: if she cannot repay, the jewellery can be auctioned.
Option 2: Use your job, not your score
- Employer salary advance: Many employers advance one month’s salary, often interest-free, recovered from the next few payslips. Ask HR before anyone else.
- Earned wage access: Some employers partner with platforms that let you draw salary already earned. Fees are usually small and fixed, but check them. See what earned wage access is and advance salary loans.
- EPF partial withdrawal: EPF allows partial withdrawals for specific needs such as illness, marriage, education or housing, subject to rules on service period and amount. It is your own money, so there is no credit check, but it reduces your retirement savings. See the EPFO hub.
Option 3: Add a co-applicant or guarantor
A spouse, parent or sibling with steady income and a good score can apply jointly. The lender then looks at combined income and both credit histories. Be honest with them: a co-applicant is equally liable, and any missed EMI will damage their credit report too.
Option 4: Smaller unsecured loans from regulated lenders
Some banks and NBFCs do lend to people with lower scores, usually for smaller amounts and shorter tenures, at higher rates. Before you accept any offer:
- Confirm the lender is a bank or an NBFC registered with RBI. Use our RBI-registered NBFC search, or check RBI’s Sachet portal.
- Read the Key Facts Statement. RBI’s KFS rules require lenders to show the annual percentage rate (APR) including all fees, and they cannot charge fees not listed in the KFS. Compare APR, not the headline rate; see APR vs interest rate.
- Borrow the smallest amount that solves the problem.
- Make sure the EMI fits: total EMIs ideally under 40–50% of take-home pay.
Apps that state they consider lower scores are compared in which loan app for a low CIBIL score. If you have a past default, read loans for CIBIL defaulters first.
Compare offers from RBI-regulated lenders that consider lower credit scores, and see the APR before you apply.
Option 5: Family, friends and your own budget
Borrowing from family can be the cheapest option, but it can also strain relationships. Put it in writing: amount, monthly repayment and date. Pay it back as seriously as you would a bank.
It is also worth checking whether you need to borrow at all. Selling an unused item, asking a hospital or school for an instalment plan, or postponing a non-urgent purchase can close the gap without any interest.
Options to avoid
- Unregistered loan apps that ask for access to your contacts and photos, or lend through a company you cannot find on RBI’s list.
- Very short-tenure payday-style loans rolled over again and again. A ₹10,000 loan for 30 days with a ₹1,500 fee looks small, but rolled over for a year the fees add up to more than the loan. See how to escape the payday loan trap.
- Upfront-fee “loan agents” who promise approval for a fee. Regulated lenders do not guarantee approval.
- Unsecured borrowing to repay unsecured borrowing. It only moves the problem a month ahead.
If you face harassment from any lender, complain to the lender’s grievance officer and, if unresolved, to the RBI Ombudsman.
A quick decision order
- Can I avoid borrowing (instalment plan, sale of an unused item, delay)?
- Can my employer advance salary, or can I use EPF for this specific need?
- Do I own gold, an FD, mutual funds or shares I can borrow against?
- Is there a family member willing to be a co-applicant, knowing the risk?
- Only then: a small unsecured loan from an RBI-regulated lender, with the APR checked in the KFS.
Fix the score while you borrow
Whatever option you choose, pay it on time. A secured loan repaid on schedule is reported to the bureaus and adds good history. Check your free annual credit report (RBI requires each bureau to give you one free full report a year) and dispute any errors. Accurate negative entries stay, but they matter less as good months pile up. More in our loans for low credit score hub.
Frequently asked questions
What is the easiest loan to get with a poor credit score?
Loans backed by an asset, such as a gold loan or a loan against a fixed deposit, are usually the easiest because the security reduces the lender’s risk. Approval still depends on the lender’s policy and the value of the asset.
Can I get a personal loan with a CIBIL score below 600?
Some regulated lenders consider such applications, usually for small amounts at higher rates, or with a co-applicant. Approval is never guaranteed, and you should compare the APR in the Key Facts Statement.
Does a gold loan improve my credit score?
A gold loan is reported to credit bureaus like any other loan. Repaying it on time adds positive history; missing payments hurts your score and can lead to the gold being auctioned.
Is it safe to borrow from a loan app with a low score?
Only if the app lends through an RBI-registered bank or NBFC, shows a Key Facts Statement and does not ask for unnecessary phone permissions. Check the lender’s name on RBI’s list before sharing documents.
Should I withdraw EPF instead of taking a loan?
EPF partial withdrawals are allowed for specific purposes and carry no interest, but they reduce your retirement savings and future compounding. It can make sense for a genuine emergency if the alternative is high-cost debt.
Sources
- RBI: Key Facts Statement for loans and advances
- RBI Sachet portal
- RBI: Free annual credit report to individuals
Disclosure: FundsTiger (Gatimaan Finance Advisors Pvt. Ltd.) is a loan marketplace and lending service provider for RBI-regulated lenders. Aparampaar Finance Pvt. Ltd. (Omozing), one of those lenders, is a related party of FundsTiger. This article is general information, not financial advice. Read your loan agreement and KFS before you decide.