Urgent Loans for CIBIL Defaulters in 2025: What You Need to Know

Ever found yourself in urgent need of money, only to be held back by your poor credit history? Maybe you missed some EMIs, or your credit card dues piled up during tough times. And now, lenders refuse to give you even the smallest of loans, making an already tough situation even worse.

Table of Content

• What is a CIBIL Defaulter?
• How to Get an Urgent Loan as a CIBIL Defaulter
• How to Apply for an Urgent Loan for CIBIL Defaulters Online?
• How to Improve CIBIL Score After Default?

If this sounds familiar, here’s some good news: You can still get an urgent loan, even with a low CIBIL score. However, there are some terms and conditions to it. To help you, here is all you need to know about getting an urgent loan for CBIL defaulters:

What is a CIBIL Defaulter?

While there is no definitive definition of a “CIBIL defaulter”, a person is generally considered one when they have a CIBIL score of less than 600. Lenders consider these individuals a high risk, making it difficult for them to obtain a loan.

The CIBIL or Credit Information Bureau (India) Limited is a credit information company that stores credit information about individuals and businesses. They assign a CBIL score, which ranges from 300-900, that represents an individual’s health to repay the loan. The higher the score, the higher the chances of your loan getting approved.

How to Get an Urgent Loan as a CIBIL Defaulter

Here are some options through which a lender may approve an urgent loan for CIBIL defaulters:

Apply with a Co-Signer

Applying for a loan with a co-signer or guarantor with a high credit score can increase your chances of loan approval. This is because the lender considers the co-signer’s creditworthiness as a safety net. However, make sure the co-signer fully understands the risks and responsibilities before signing.

Use a Collateral

Some lenders approve personal loans for CIBIL defaulters with physical assets, such as houses, cars, or other valuables, as collateral. However, remember that the collateral can be seized if you default on any loan repayment.

Take a Loan at Higher Interest Rates

Lenders consider a CIBIL defaulter a risky borrower. However, some lenders may agree to give you a loan at a higher interest rate to offset the possibility of default.

Improve your Credit Score

If you have existing debt, prioritise making timely repayments. By making consistent on-time payments, you can gradually improve your credit score, increasing your chances of getting loan approvals in the future.

Explore Other Alternatives

If none of the other options work for you, you can consider a more traditional route, such as peer-to-peer lending, where you borrow money from acquaintances or friends through informal arrangements. However, keep in mind that this approach can be risky, as there is no formal agreement involved.

Suggested Read: 7 Proven Steps to Apply for a Personal Loan with Bad Credit

How to Apply for an Urgent Loan for CIBIL Defaulters Online?

Here is a step-by-step process to get a loan for a CIBIL defaulter online:

Research Different Lenders

The first step is to find a lender that is willing to offer personal or home loans to CIBIL defaulters. Traditional banks are generally reluctant to lend to CIBIL defaulters, but many NBFCs, private lenders, and digital lenders do offer loans to individuals with low credit scores.

Know the Eligibility Criteria

Ensure that you understand the eligibility criteria that must be met to secure the loan. This is because lenders could have special terms and conditions for CIBIL defaulters to secure a loan.

Gather all the Documents

Once you find a lender and understand the eligibility criteria, it’s time to gather all your documents. This could include ID proofs and financial statements, among others.

Apply Online

Fill out the online loan application form by visiting the lender’s official website. Ensure that all the information filled in the form is accurate and up-to-date so that there are no problems with loan processing.

Wait for the Approval from the Lender

Once you have submitted the loan application, it's time to wait for approval from the lender. If your documents are accurate and your application meets the lender’s eligibility criteria, you will get the loan approval immediately. However, in case it's not approved, the lender will share their reason for the same.

How to Improve CIBIL Score After Default?

Here are some ways to improve your credit score and increase your chances of getting a loan:

• Monitor Your Report Frequently: Frequently monitor your credit report to spot any errors and fix them early on through the CIBIL credit dispute.
• Clear All Outstanding Depts: Start clearing all your outstanding dues. Consider setting automatic payments to make your loan more manageable.
• Avoid Acquiring Multiple Loans: When you apply for a loan, the lenders perform a hard inquiry on your credit report, which can temporarily lower your credit score. To avoid this, do thorough research before applying for a loan.
• Keep the Loan Utilisation Score Low: Keep your credit utilisation below 30% of your total limit. Doing this will make you look financially stable and responsible in the eyes of lenders.
• Seek Professional Debt Counselling: Lastly, consider seeking a professional debt counsellor who can offer you strategic plans to manage and improve your credit score.

Suggested Read: How Much CIBIL Score Is Required for a Home Loan Approval

In conclusion, a low credit score can reduce your chances of getting a loan approval. However, with the right strategies, CIBIL defaulters can avail loans and improve their creditworthiness. Remember that every step you take towards improving your credit score today will pave the way for a more secure financial future.

Looking to avail of a personal loan or home loan? Consider Muthoot Finance. With easy eligibility, minimal documentation, and flexible repayment options, we ensure a smooth and hassle-free borrowing experience tailored to your financial needs. For more information, visit your nearest Muthoot Finance branch.