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Personal Loan With a 550 Credit Score: Can I Get One?

If you’re struggling to get a personal loan, consider applying with a cosigner or getting a secured loan.

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By Tim Maxwell

Written by

Tim Maxwell

Writer

Tim Maxwell is a financial writer with over two decades of experience. Tim’s work has appeared in USA Today, Washington Post, Bankrate, LendingTree, Fox Business, Credible and more. He also publishes Incomist, a personal finance site that focuses on paying off debt by earning extra income in creative ways.

Edited by Meredith Mangan

Written by

Meredith Mangan

Senior Editor

Meredith Mangan is Credible's Senior Editor for Personal Loans. Since 2011, she’s helped steer content creation in the areas of mortgages and loans, insurance, credit cards, and investing for major finance verticals, including Investopedia, Money Crashers, and The Balance.

Updated February 14, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances.

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You’ll typically need good to excellent credit to qualify for the best personal loans. That means your FICO score should be 670 or higher if you want the most lending options, the lowest rates, and favorable loan terms.

But you’re not without options if you have a low credit score. Some lenders offer personal loans for bad credit. And some let you apply with a cosigner, which can make you eligible for loans you otherwise wouldn’t be, or lower your rate.

Compare personal loans for bad credit

If you have a credit score below 580, your credit is considered poor, which can make it difficult to qualify for a personal loan with most lenders. However, we partner with a handful of lenders that offer personal loans for bad credit, as well as lenders who accept cosigners.

Advertiser Disclosure
3.93.9

Credible rating

Fixed (APR)

7.80% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

620

Check Rates

on Credible’s website

View Details

4.54.5

Credible rating

Fixed (APR)

8.49% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

3.93.9

Credible rating

Fixed (APR)

9.95% - 35.99%

Loan Amounts

$2000 to $35000

Min. Credit Score

550

Check Rates

on Credible’s website

View Details

4.34.3

Credible rating

Fixed (APR)

11.69% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

560

Check Rates

on Credible’s website

View Details

3.93.9

Credible rating

Fixed (APR)

18.00% - 35.99%

Loan Amounts

$1500 to $20000

Min. Credit Score

540

Check Rates

on Credible’s website

View Details

All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms

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Important

A cosigner is someone who is responsible for repaying the loan if you fail to do so. If you make late payments or miss payments, it can damage their credit. If you stop making payments altogether, they’re on the hook for the amount owed.

Best personal loans for bad credit

Best Fast Personal Loans for All Credit Types

Upstart

3.9

Credible Rating

Check Rates

on Credible’s website

Est. APR

7.80 - 35.99%

Loan Amount

$1000 to $50000

Min. Credit Score

620

Pros and cons

More details

Best for Fair Credit

Upgrade

4.5

Credible Rating

Check Rates

on Credible’s website

Est. APR

8.49 - 35.99%

Loan Amount

$1000 to $50000

Min. Credit Score

600

Pros and cons

More details

Best for All Credit Types

Avant

3.9

Credible Rating

Check Rates

on Credible’s website

Est. APR

9.95 - 35.99%

Loan Amount

$2000 to $35000

Min. Credit Score

550

Pros and cons

More details

Best for Large Personal Loans

BHG Money

4

Credible Rating

Check Rates

on Credible’s website

Est. APR

-

Loan Amount

$20000 to $200000

Min. Credit Score

660

Pros and cons

More details

Best Debt Consolidation Loans for Bad Credit

Universal Credit

4.3

Credible Rating

Check Rates

on Credible’s website

Est. APR

11.69 - 35.99%

Loan Amount

$1000 to $50000

Min. Credit Score

560

Pros and cons

More details

Best Bad Credit Personal Loans

OneMain Financial

3.9

Credible Rating

Check Rates

on Credible’s website

Est. APR

18.00 - 35.99%

Loan Amount

$1500 to $20000

Min. Credit Score

540

Pros and cons

More details

What is a personal loan?

A personal loan is an installment loan that allows you to borrow money for various purposes. Unlike funds from a mortgage or auto loan, which must be used to pay for your house or car, respectively, a personal loan can be used to finance a home renovation project, consolidate high-interest debts, or for almost any other reason.

Personal loans are typically unsecured, meaning you don’t have to secure the loan with collateral. But if you find a lender that offers secured loans, you may be able to get a lower rate. Repayment terms on personal loans typically range from two years to seven years, or more. Average personal loan rates start below 10%, but can run up to around 36% if you have bad credit. You also may be charged an origination fee upfront, which reduces the amount you receive.

Compare Rates Now

How to get a personal loan with bad credit

If you’re ready to apply for a personal loan, follow these steps:

  1. Check your credit: Many lenders have minimum credit score requirements, so check your credit first to see where you stand and which lenders are options. You can use a site like AnnualCreditReport.com to review your credit reports for free. If you find errors, dispute them with the appropriate credit bureaus to potentially boost your score.
  2. Know what you need: Determine how much you need to borrow and what monthly payment you can afford. Then, look for lenders that offer the loan amount you need and require a minimum credit score below yours. If that doesn’t turn up much, look for lenders that allow cosigners — and find a cosigner who’s willing to vouch for you on a loan.
  3. Prequalify with lenders: Once you’ve narrowed down a list, prequalify with those lenders to get an estimate of the annual percentage rates (APRs) and loan amounts you might qualify for, as well as whether you’ll qualify for a personal loan at all. Prequalification won’t impact your credit, but formally applying for a personal loan could lower your credit score — usually by no more than 5 points for up to a year.
  4. Compare lenders: Along with credit requirements, consider APRs, repayment terms, and fees charged by the lender. After you’ve compared personal loans, choose the option you like best.
  5. Complete the application: Once you’ve picked a lender, you’ll need to fill out an application and submit required documentation, such as tax returns and pay stubs.
  6. Review the loan agreement: If approved, review the loan agreement and sign if the terms are acceptable — check the APR, fees, and repayment period, and when the first payment is due.
  7. Await your funds: Some lenders offer same-day funding after loan approval, but it’s more likely that your loan will be funded the next business day after or within a few business days of your loan approval.
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Tip

If you’re still struggling to qualify, consider a credit-builder loan, which is easier to qualify for and can improve your credit score so you can later apply (and ideally be approved) for a personal loan.

Learn More: APR vs. Interest Rate on a Personal Loan

How credit scores affect loan rates

Your credit score plays a major role in determining the APR you qualify for when you apply for a personal loan. In general, the lower your credit score, the higher the rate you’ll likely pay.

For example, here’s how your credit score could affect how much you’d pay on a $10,000 personal loan with a three-year term. Note that some borrowers with fair credit might pay almost $1,300 less in interest relative to borrowers with poor credit.

Credit Score
Average APR
Monthly Payment
Total Interest
Total Repayment Cost
640-679
25.31%
$399
$4,373
$14,373
600-639
28.77%
$418
$5,041
$15,041
600 or below
31.78%
$434
$5,636
$15,636

Average APRs are based on the personal loan interest rates borrowers received when they applied for a personal loan through Credible in September 2023.

You can estimate how much you’ll pay for a loan using a personal loan calculator.

Compare Rates Now

Pros and cons of bad-credit loans

As with any financial product, consider the benefits and downsides of personal loans for bad credit before you apply.

Pros

Cons

  • High APRs: Lenders typically reserve their best interest rates for borrowers with solid credit. If your score isn’t great, you may receive interest rates from lenders ranging up to 36%, depending on your credit and other factors.
  • High fees: Lenders offering personal loans for borrowers with bad credit reduce their risk by charging higher fees and interest rates, which ultimately results in higher APRs. Fees may include an origination fee to process the loan and an early repayment penalty.
  • May require collateral: While most personal loans are unsecured, your lender may want you to provide collateral to secure your loan. Be aware that the lender can seize your collateral if you fail to make your payments as agreed.
  • Potential credit harm: Just as making your payments on time can build your credit, late or missed payments can negatively affect your credit.

How to improve your credit score

Taking steps to improve your credit score can help you qualify for a personal loan and with better rates. Here’s how:

  • Consistently pay bills on time: Payment history is the most important factor in calculating your FICO credit score. Help ensure you’re never late by setting up automatic payments for recurring bills like car payments, credit cards, and personal loans. If a number of your bills are due around the same time each month, reach out to your creditors to change due dates for more breathing room.
  • Pay down debt: Your credit utilization ratio makes up 30% of your FICO score. Credit utilization is the percentage of your available revolving credit you’re currently using. Lenders consider borrowers with high credit utilization ratios high-risk. As such, paying down your debt can positively impact your credit and your ability to qualify for a personal loan.
  • Don’t close credit card accounts: Closing old credit card accounts with a zero balance may seem like a good idea, but it can drastically increase your credit utilization ratio, which can hurt your credit. Keeping accounts open once you’ve paid off balances can be a good way to keep your credit utilization ratio low and improve your score.
  • Avoid hard inquiries: A hard inquiry is when a lender pulls your credit for a loan or other financial product application. The inquiry will appear on your credit report and could cause your score to temporarily dip. A lender may see you as a risk if you seek to borrow money multiple times from different sources. Applications for new credit make up 10% of your credit score.

Alternatives to personal loans

Personal loans come with many advantages, but they’re not for everyone. Consider these alternatives, especially if you have bad credit:

  • Borrow from friends or family: No matter the terms, put your agreement in writing, including the loan amount, interest or collateral, repayment period, and due dates.
  • Use a credit card: If you have available credit on a card, consider using it instead of a personal loan. The interest rate on your card may not be as high as what you’d get with a bad-credit personal loan. Prequalify with a few personal loan lenders to see how the rate on your card compares.
  • Consider a debt management plan: If you’re drowning in debt, seek help from a nonprofit credit counseling agency. A certified credit counselor can help you create a debt management plan that could lower your interest rates and help you pay debt off sooner.
  • Use a fee-free cash advance app: If you need a small amount of cash, consider a cash advance app without fees. Just remember that while some apps don’t have mandatory fees, most charge a fast-funding fee, which can make these loans very expensive.

Dori Zinn has contributed to the reporting of this article

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Meet the expert:
Tim Maxwell

Tim Maxwell is a financial writer with over two decades of experience. Tim’s work has appeared in USA Today, Washington Post, Bankrate, LendingTree, Fox Business, Credible and more. He also publishes Incomist, a personal finance site that focuses on paying off debt by earning extra income in creative ways.