The term “credit score” can be a new concept for a first time borrower. Initially, this can be confusing especially if you do not have a credit score yet. Credit score is nothing but a reflection of your financial behaviour and habits. It allows lenders to assess your financial behaviour before approving the loan. A first time borrower, student or a fresh employee may have searched for options like a personal loan with no credit score. As a first time borrower, you might know that to get a loan it is necessary to maintain a good credit score, which is true. But, if you haven’t started with your credit score journey yet, you are still eligible to apply for personal loans. However, you need to have a proper research and understand your options carefully.
In this blog, we will explain the best ways to get a personal loan without credit history, eligibility criteria and convenient loan options for bad credit score, so that it is easier for you to apply for a loan and avoid common mistakes as a first time borrower.
What Is “No Credit Score”?
If you are someone who has never applied for a loan or even used a credit card, your CIBIL score or any credit history may be zero. Hence, this is called “new to credit profile”.
Lenders usually check:
- Past repayment behavior
- Credit card usage
- Existing loans
- EMI payment history
If none of the above exists, then you are said to have no credit history.
This doesn’t mean that you are risky; it means that the lenders do not know anything about your financial behaviour.
Is A Personal Loan With No Credit Score Possible?
Yes, it is possible to get a personal loan even without a credit score; this is particularly true for first-time loan applicants who have not even made any credit card purchases or borrowed any loan in the past. Earlier, traditional banks heavily depended on credit scores as criteria to approve applicants. However, currently, many financial institutions do not rely too much on credit scores.
But, approval for a personal loan with no credit is mainly dependent on your stable income levels, bank statements, type of employment, income levels, debt to income ratios, and sometimes even your age and city category. For instance, for salaried employees, stable income on a monthly basis is considered to be more positive as compared to irregular income. Banks also assess your existing financial obligations and check whether you are able to manage your existing expenditure on an income basis. Banks may also look for stable industries and companies to which you belong and assess the positive potential in sanctioning your loan as compared to others.
Options For Personal Loan With No Credit History:
As a first time borrower, here are some of the safe and reliable loan options for bad credit or zero credit score.
1. Small-Ticket Digital Personal Loans
Many fintech platforms provide first-time borrowers with access to smaller amounts.
Loan Amount: ₹5,000 to ₹50,000
Tenure: 2 to 18 months
These loans assist you:
- Build credit history
- Improving future eligibility
- Demonstrate Repayment Discipline
If timely repayment is made, your credit score is generated.
2. Salary-Based Approval Loans
If you are salaried and have regular income on a monthly basis, then you may be granted a personal loan without credit history based on:
- Last 6 months bank statement
- Salary credits
- Employer details
For example:
| Monthly Salary | Possible Loan Amount | Tenure | EMI (Approx 18%) |
| ₹20,000 | ₹50,000 | 12 months | ₹4,600 |
| ₹30,000 | ₹1,00,000 | 24 months | ₹5,000 |
| ₹40,000 | ₹2,00,000 | 36 months | ₹7,200 |
This clearly states that income is an important factor in applying for a personal loan with no credit score. Hence, it is important to understand these factors as well.
3. Secured Personal Loans
If you have:
- Fixed Deposit (FD)
- Gold
- Insurance policy
Options are available to you; you could consider a secured loan. The collateral reduces the risk, and credit history may not be strictly scrutinized.
This is one of the safest loans for someone with a bad credit or no credit profile.
4. Add a Co-App
Having a co-applicant with good credit ratings improves the chances of approval.
Lenders evaluate:
- Combined income
- Co-applicant Credit Score
- Repayment Capacity
This is useful for first-time borrowers because they will need bigger amounts.
5. Pre-approved Employer Loans
Some companies have partnered with lenders for employee loans.
Approval based on:
- Job security
- HR verification
- Internal payroll information
This may be quicker and does not depend as heavily on credit score.
Things To Avoid When You Have No Credit Score:
There are few things to consider if you are someone with no credit score, avoid the following things to not fall into any unnecessary problems in the future while applying for the loan.
- Unregistered Lenders – Do not fall for random loan providers that come through unregistered websites or pretend to be a real lender. There are various RBI registered fintech companies or trusted NBFCs to trust during this process.
- Higher interest rates (above 30-40%) – Try to avoid loans with higher interest rates, always compare different lenders and understand the interest rates using an EMI calculator, and choose the best option suitable for you.
- Apps asking for too many permissions – It’s important to understand the difference between a real loan app and a fake loan app. A registered loan app will never ask too many permission to have an access.
- Advance processing fees – A fake loan app will demand for advance processing fees, which should be avoided.
Once you keep these things in mind, it will be easier for you to get through the process smoothly.
Interest Rates To Expect:
In the case of interest rate, it might be marginally higher for new-to-credit customers.
| Profile Type | Expected Interest Range |
| New to credit | 15% – 24% |
| Strong salaried profile | 12% – 18% |
| Secured loan | 10% – 15% |
The interest rates vary depending on the policies of the lender.
Ways to Improve Approval Chances:
In order to boost your chances of obtaining a personal loan without any credit history, follow these steps:
1. Maintain Clean Bank Statements
Avoid cheque bounces and try to maintain a balanced bank account
2. Show Stable Income
At least 6 months of continuous salary credits.
3. Start with Small Loan Amount
Apply for a smaller loan to create some history.
4. Avoid Multiple Applications
Too many applications generate multiple queries, lowering the approval rate.
5. Use Digital Platforms Carefully
However, some platforms offer ways to compare the eligibility criteria without negatively impacting credit scores. For instance, fintech platforms like Olyv help users check their digital loan options and understand their eligibility, reducing unproductive rejections.
Closing Thoughts On Personal Loan With No Credit Score:
Without a credit score, one can avail of a personal loan in India with the help of digital lending and income-based assessments. Whether you are a first-time borrower or are searching for safe loans with bad credit, this option depends on prudent planning.
So start small and work your way up by repaying on time. Do not go for high-risk lenders or higher amounts based on unrealistic promises. Check the interest rate, repayment terms, and credibility of the lender before applying.
Responsible borrowing today can help you unlock better financial opportunities tomorrow.
