I made this character with thin arms and legs, but when I place his arms the mesh gets deformed way hard. Is it because I’ts a low poly model or… How can I make this work out?
You meant “when you pose his arms”? You have an armature in your scene I see. So you’ve rigged your model? As in parented your mesh to the armature and selected “with automatic weights”?
Well then, this is not plug-and-play, you now have to fix weight painting for your vertices 
Look at the tutorials section, there’s a fresh rigging tutorial from SebastianL.
simpler explaination:
1: Not enough verts at the joint/one bone owns most of them. Skewing occurs.
2: Half and half, but not enough verts on one side. Works well bending one way but not the other.
(low poly games used to do this)
3: More rings around a joint. Works better for twists and bends in all directions. (try not to over-twist if you don’t want pinching)
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