Different ways to apply for a loan for CIBIL defaulters?
Different ways to apply for a loan for CIBIL defaulters?
The first thing to understand is that there is no specific defaulters list that CIBIL issues. CIBIL follows a scoring system where your score is determined based on all your credit activities. So, whenever you fail to repay your debts on time, that data is also reported to CIBIL. And frequent irregularities in loan repayments will affect your credit score negatively.

ways for CIBIL Defaulters to get a loan

When you apply for a loan, banks and other lenders will ask for your credit score from CIBIL, and if the score is too low, your loan may not be approved. Nowadays, almost all banks ask for credit scores before lending, so if your score is too low you can have a real hard time getting a loan approved. 

However, there are a few ways for CIBIL Defaulters to get a loan. Take a look.

1) Having a High Salary

Your credit scores may be low, but you can still have a good job that pays you well. Your professional and salary play a major role in loan approval. If you have a stable job and a good salary, you can try applying for a loan. Some lenders may choose to approve your loan based on your affordability. So they will ignore the low credit score if your monthly income is stable and good enough. 

2) Submit a Joint Application

If your credit score is too low and you also don't have a highly stable salary, you can choose to apply with a co-applicant. Banks do accept joint applications of spouses, and if your spouse's CIBIL score is good, you may get the loan approved. In joint applications, the application can be considered legit if at least one of the applicants is employed and capable of loan repayment. So, if your spouse has a good credit rating, you can apply jointly and get a loan. 

3) Loans for Low CIBIL Score Holders

Banks and lenders do understand that a loan plays a key role in improving credit scores. So, a person with a low CIBIL score would want to take a loan and repay it on time to generate some positive scoring. Therefore, some banks and other lenders do have special products designed for low CIBIL score holders. You can apply for such a loan, and it will be easy for you to get approved despite your low credit ratings. However, you must understand that such loans have a higher interest rate to compensate for the bank's risks of lending to a CIBIL defaulter. 

4) Peer-to-Peer Or Private Financing

Private lending is always an option, but it is not a secure one. You may be charged higher interest rates, and there can be some complications with peer-to-peer or private financing. Such organizations would give you a loan at a higher interest rate, for a shorter period, against some security asset. But if you are in desperate need of funds, you can approach private financing organizations for a loan.

5) Improve Your Credit Score

The most trustable and safe method to get a loan for CIBIL defaulter is to improve your credit scores. It may take some time to get the CIBIL scores back up, but it will help you get loans safely at lower interest rates. 

Here are some general steps to improve your CIBIL scores:

  • Start by making on-time payments on all your debts. The more timely payments you make, the better it will reflect on your credit rating. 

  • Pay all your credit card bills on time. Make sure that all your credit card bills are being paid on time. If not in full, you must make sure that you at least pay off the minimum due amount before the due date. 

  • Take small loans based on your salary and pay them off on time. 

  • Avoid applying for a loan with multiple lenders at the same time. 

These are some of the most common steps that will help you improve your CIBIL scores. For more personalized tips you can contact a reliable financial advisor, and they can help you with custom suggestions to improve your credit ratings.

Related Articles: Legal Action Against Loan Defaulters


Improving the CIBIL score up to an acceptable level is very important if you want to enjoy hassle-free and profitable finance opportunities. It may take some time but with gradual progressive steps, you can get the ratings up again. And in the meantime, you can choose from one of the ways mentioned above. That's our take on different ways to get a loan for CIBIL defaulters. Choose wisely.