A financial emergency can arise at any time, whether it’s for medical expenses, urgent home repairs, or an unexpected bill. If you need a Rs. 2 lakh loan but have a low credit score, you might worry about getting approval. Fortunately, there are ways to secure an Insta Personal Loan even with a less-than-perfect credit history.
In this article, we’ll explore how you can increase your chances of getting a Rs. 2 lakh loan, alternative borrowing options, and smart repayment strategies to improve your financial health.
Understanding the role of a credit score in loan approval
A credit score reflects your repayment history and financial discipline. Most lenders consider a score of 750 or above ideal for approving personal loans at competitive interest rates. However, if your score is lower, some lenders may still offer you a loan, but with higher interest rates or stricter terms.
Why a low credit score affects loan approval
- Higher risk for lenders – A low score indicates a history of delayed payments or high debt.
- Higher interest rates – Lenders may compensate for the risk by charging a higher interest rate.
- Lower loan amounts – Instead of the full Rs. 2 lakh, some lenders may approve a smaller loan.
While a low credit score may limit your options, it does not mean rejection is inevitable. There are several ways to secure an Insta Personal Loan despite a low score.
Ways to get a Rs. 2 Lakh loan with a low credit score
1. Apply with an NBFC or digital lender
Traditional banks have stricter eligibility criteria, but non-banking financial companies (NBFCs) and digital lenders are more flexible. Many of them offer instant personal loans even if your credit score isn’t ideal.
- They assess other factors like your income, employment stability, and repayment ability.
- The loan application process is 100% online, making it faster than traditional banks.
2. Show proof of a stable income
Lenders are more likely to approve your Rs. 2 lakh loan if you have a stable income.
- A salary slip, income tax return (ITR), or bank statement can strengthen your application.
- If you have a side business or freelance income, include those details to show repayment capacity.
3. Opt for a secured loan
If lenders hesitate due to your low credit score, you can opt for a secured personal loan by pledging an asset such as:
- Fixed deposits
- Gold
- Property
This reduces the risk for the lender and improves your chances of getting a loan at a reasonable interest rate.
4. Get a guarantor or co-applicant
Another way to get a Rs. 2 lakh loan is by adding a co-applicant or guarantor with a strong credit profile.
- A co-applicant (like a family member) shares responsibility for loan repayment.
- A guarantor provides assurance to the lender that they will repay the loan if you default.
5. Apply for a lower loan amount first
If a Rs. 2 lakh loan seems difficult to secure, consider applying for a smaller amount first. Repaying a smaller loan on time can improve your credit score, making it easier to get larger loans in the future.
6. Negotiate with the lender
If you have a long-standing relationship with a bank or financial institution, negotiate for better terms. Some lenders consider your repayment history with them, even if your overall credit score is low.
Documents required for an Insta Personal Loan
When applying for a Rs. 2 lakh loan, you’ll typically need:
- Identity proof: Aadhaar Card, PAN Card, Voter ID, or Passport.
- Address proof: Utility bill, rental agreement, or Aadhaar Card.
- Income proof: Salary slips, bank statements, or ITR returns.
- Employment proof: Offer letter, work ID, or business registration certificate.
How to increase your loan approval chances in the future
Even if you secure a Rs. 2 lakh loan now, improving your credit score is essential for better loan terms in the future. Here’s how you can do it:
1. Pay EMIs and bills on time
Timely repayment of loans, credit card bills, and other debts improves your credit history. Even a single missed payment can negatively impact your score.
2. Maintain a low credit utilisation ratio
If you use more than 30-40% of your available credit limit, lenders may see you as a high-risk borrower. Keep your credit card usage in check to maintain a good score.
3. Avoid multiple loan applications at once
Applying for multiple loans within a short period can make you seem credit-hungry and reduce your chances of approval. Instead, check your eligibility before applying.
4. Check your credit report for errors
Sometimes, incorrect information in your credit report can lower your score. Reviewing your report and disputing any errors can help boost your credit profile.
Final thoughts
Getting a Rs. 2 lakh loan with a low credit score might seem challenging, but it is possible with the right approach. By choosing alternative lenders, securing a guarantor, or opting for a secured loan, you can improve your chances of approval.
At the same time, working on your credit score ensures better borrowing opportunities in the future. Plan your repayments wisely, use an Insta Personal Loan only when necessary, and always stay on top of your financial commitments.
If you need quick funds, explore lenders that offer flexible eligibility criteria and apply for a loan today.
