Yes, a personal loan will appear in your credit history and can affect your credit score based on the below factors

On-time EMI payments

If you make your EMI payments for your personal loan on time and in full, your credit score will improve as you will be considered a responsible and creditworthy customer. This is very useful as a good credit score can get you better credit offers in the future.

Defaulting on EMI payment

If you do not pay your EMIs on time or default on payments, this can reduce your credit score as you will viewed as a risky customer to lend to. Late payments and missed payments will reflect in your credit report as well.


If you cannot afford to pay off your personal loan in full and ask your bank to settle your loan, it can negatively impact your credit score. Settlements are done when an individual is unable to repay the loan amount with the interest and explains to the lender his current situation and reason to being unable to pay the full amount. The lender then reduces the amount that should be paid (generally just the loan principal amount without interest) and the customer settles the loan. This will reduce a person’s credit score.

Written-off account

A written off account is when you repeatedly default on EMI payments for your personal loan for a prolonged period of time. This can reduce one’s credit score.

So, it is best to repay your personal loan amount completely and on time to make sure that your credit score improves and so that your credit history stays positive. This can get you low interest loans and high limit credit cards in the future as you will be viewed as a creditworthy customer.

To apply for a personal loan, click here.