By Thelowinterest 17 Feb, 2026
Many borrowers worry about whether they can get a personal loan after settling a credit card. Credit card settlement may reduce your repayment burden, but it can also impact your credit score and loan eligibility. In 2026, lenders are using advanced credit assessment systems, making it possible to get a personal loan after credit card settlement, but approval depends on several factors.
This guide explains eligibility, approval chances, tips to improve the success rate, and how you can still secure a personal loan.
Credit card settlement means you negotiated with the bank to pay less than the total outstanding amount. While it helps close your debt, it is marked as “Settled” in your credit report instead of “Closed”, which negatively affects your creditworthiness.
Impact includes:
Drop in credit score
Reduced loan approval chances
Higher interest rates
Strict verification by lenders
However, getting a personal loan is still possible with the right steps.
Yes, but with conditions. Approval depends on:
Current credit score
Income stability
Time passed after the settlement
Repayment capacity
Lender’s risk policy
Some NBFCs and digital lenders provide loans even with lower credit scores, but interest rates may be higher
700+ – High approval chances, lower interest
650–699 – Moderate approval, slightly higher rates
600–649 – Possible with select lenders
Below 600 – Difficult, but secured or co-applicant options may work
Experts recommend waiting 6 to 12 months after settlement before applying. During this time, focus on improving your credit profile to increase approval chances.
Pay all EMIs and bills on time to rebuild your credit history.
Lenders prefer applicants with steady salary or business income.
Apply for a smaller loan to improve approval chances.
Too many loan inquiries reduce your credit score further.
Adding a co-applicant or collateral increases approval probability.
PAN Card
Aadhaar / Address Proof
Income Proof (Salary slips / ITR)
Bank Statement (6 months)
Passport-size photo
Due to settlement history, interest may be slightly higher:
Interest Rate: 14% – 28%
Loan Tenure: 12 – 60 months
Processing Fee: 1% – 3%
Improving your credit score can help reduce rates over time.
Applying immediately after settlement
Ignoring credit score improvement
Borrowing more than repayment capacity
Missing EMI payments again
Not checking the loan terms carefully
Pay all dues on time for 6+ months
Keep credit utilisation below 30%
Maintain a stable bank balance
Avoid new credit card defaults
Monitor your credit report regularly
Getting a personal loan after credit card settlement in 2026 is possible, but approval depends on your credit recovery and financial discipline. Focus on improving your credit score, maintaining stable income, and applying strategically. With the right approach, you can rebuild your credit profile and secure a personal loan successfully. thelowinterest
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