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You may be eligible for a bad credit personal loan with a score below 580.<\/p>\n<\/li>\n
Personal loan lenders specializing in bad credit loans will likely scrutinize your income and employment history more closely.<\/p>\n<\/li>\n
A bad credit loan can be useful tool to put you on a path to fair or good credit in the future.<\/p>\n<\/li>\n<\/ul>\n
Getting a personal loan with bad credit requires a steady income and employment history, and may entail a few extra steps. The basic application process is the same, but you\u2019ll need to pay extra attention to the terms you\u2019re offered to be sure they make sense.<\/p>\n
In addition to higher rates and fees, you may be limited to shorter terms and lower loan amounts. You may need to do a little more shopping to find legit bad credit lenders and weed out the predatory ones.<\/p>\n
Knowing the common approval requirements and how to use a personal loan calculator will also help you to compare offers from different bad credit lenders when you\u2019re ready to finalize your loan.<\/p>\n
Most personal loan lenders consider a bad credit score to be anything below 580, while others only lend to borrowers with scores above 670. Whether consolidating high-interest debt or funding an emergency cost, you\u2019ll want to know the extra steps involved in getting a personal loan with bad credit before you start applying.<\/p>\n
Bad credit loans are expensive, but they can be a fast way to get cash with a predictable payment and definite payoff. Before you dive into the lender pool, define the \u201cwhy\u201d behind your bad credit borrowing needs.<\/p>\n
Do you need the funds immediately<\/strong>? Some lenders can deliver funds on the same day you apply, though this may be trickier with bad credit. If you need an emergency loan for a major home or car repair, the funds could get you back on the road or pay for the contractor for that home repair.<\/p>\n<\/li>\n Are you tired of maxed-out credit cards? <\/strong>Bad credit debt consolidation loans can give your sanity some relief from tracking all those credit card due dates if you use the funds to pay them all off. Depending on your rate and repayment term, you may also save money on interest charges.<\/p>\n<\/li>\n Are your credit scores low because of credit cards?<\/strong> Your credit utilization ratio measures how much available credit you\u2019re using, and when it\u2019s high, your scores can drop. But installment loans (like personal loans) don\u2019t directly impact your credit utilization ratio. Using a bad credit loan to bring those credit card balances to zero could give your credit score a big boost if you use the cards sparingly \u2014 if at all \u2014 in the future.<\/p>\n<\/li>\n Do you have someone who could cosign the loan? <\/strong>You may qualify for a higher loan amount or better interest rate by adding a cosigner. Just remember, their credit could be damaged if you have trouble making payments on the loan.<\/p>\n<\/li>\n<\/ul><\/div>\n Your credit score is one of the most important factors that a lender considers when reviewing your application. Although average personal loan rates typically range from 6% to 36%, a bad credit score makes it more likely you\u2019ll be offered a rate above 30%.<\/p>\n If you haven\u2019t checked your credit scores lately, see if your credit card company or bank offers it as a free service. If they\u2019re lower than expected, visit AnnualCreditReport.com to request your free credit reports and dispute any errors.<\/p>\n Bad credit lenders also pay extra attention to how much you earn, how long you\u2019ve been employed and how much debt you already have. Because a lender will want to confirm you have the cash flow to make loan payments, it may ask for additional financial documents for approval, including pay stubs, W-2s, and tax returns to verify your income.<\/p>\n Lenders require proof of income<\/strong><\/p>\n To be approved with bad credit, you\u2019ll likely need to verify that you earn a consistent income from a salaried or full-time hourly job. Variable income from self-employment, commissions or tips may not be acceptable to a bad credit lender.<\/p>\n The terms for bad credit loans vary widely among lenders. Apply with at least three lenders and compare their rates and fees to get the best idea of what\u2019s available. If you\u2019re in a rush to get funding, you can compare bad credit lenders on a marketplace lending site like Bankrate.<\/p>\n If you have a relationship with a community bank or credit union, see if it offers rate discounts or fee reductions for existing customers \u2014 you may have an easier time qualifying with a lender you already have a financial relationship with.<\/p>\n When you\u2019re comparing options, check each lender\u2019s website or ask for information about:<\/p>\n Minimum credit scores:<\/strong> The minimum may be as low as 500 or as high as 670, depending on the lender.<\/p>\n<\/li>\n Loan amount ranges:<\/strong> While loan amounts vary by lender, most offer between $1,000 and $50,000. With bad credit, a lender may limit the loan amount you are eligible for.<\/p>\n<\/li>\n Repayment terms:<\/strong> Personal loan terms are usually from one to seven years, but bad credit borrowers may be restricted to shorter terms.<\/p>\n<\/li>\n Fees:<\/strong> A personal loan for bad credit will likely have an origination fee. These are deducted from your loan proceeds and may be as high as 12% of the loan amount.<\/p>\n<\/li>\n Collateral:<\/strong> If you opt for a secured personal loan, you must provide an asset as collateral \u2014 usually a car or your home. This may reduce your interest rate, but the lender can seize your collateral if you fall behind on the loan.<\/p>\n<\/li>\n<\/ul>\n Expect a higher monthly payment<\/strong><\/p>\n The monthly payment on a bad credit personal loan may be much higher than expected, especially if you\u2019re used to making minimum payments on your credit cards. Use a personal loan calculator to determine whether the monthly payment fits your budget.<\/p>\n Prequalifying for a personal loan allows you to gauge your eligibility odds and estimated rates with no commitment. This process should only involve a soft credit pull, which doesn\u2019t affect your credit score.<\/p>\n It\u2019s a free tool offered by most lenders and can give you an idea of the rates you can expect based on your credit history. A prequalified offer is not a firm guarantee \u2014 your rate may change after the lender reviews your full application. Get prequalified with at least three lenders \u2014 or receive offers by applying on a marketplace site like Bankrate \u2014 to narrow your search.<\/p>\n If you can\u2019t get prequalified for the amount you need, check to see if the lender allows you to add a cosigner or co-borrower to improve your eligibility.<\/p>\n When you make your final lender choice, you\u2019ll officially apply for a personal loan. This is when the lender performs a hard credit check. A hard pull will temporarily knock your credit score down a few points, but the impact is usually offset by making timely loan payments (and leaving those zero-balance credit cards alone if you consolidated).<\/p>\n But too many hard checks in a short time can cause longer-term damage to your credit score. That\u2019s why choosing lenders that offer prequalification or using a marketplace lending site like Bankrate is so important when you\u2019re getting a bad credit personal loan.<\/p>\n If you\u2019re approved and agree to the loan terms, the lender may fund your loan as soon as the same business day, though some lenders may take up to a week. Funds are generally deposited directly into your bank account. If you choose a debt consolidation loan, some lenders will use the loan funds to repay your creditors on your behalf.<\/p>\n Most lenders offer an autopay option that withdraws your monthly payment from your bank account on the due date. Not only can this help you avoid missing a due date, but you may receive a rate discount for enrolling.<\/p>\n During repayment, review your budget and financial goals to avoid future bad credit loans. If you make your loan payments on time and in full each month, your credit score should slowly creep up. Once you\u2019re out of bad-credit territory, you may qualify for a lower APR through a personal loan refinance \u2014 the difference between bad credit and fair credit could shave 7 to 10 percentage points off your rate.<\/p>\n Watch your budget, avoid running up large credit card balances or pick up a side hustle to add money to your emergency savings so you can avoid debt in the future.<\/p>\n While a bad credit loan may help you consolidate debts and improve your credit score, you may also want to seek credit counseling to help you build better money habits and avoid future financial trouble.<\/p>\n Getting approved for a personal loan with bad credit can be difficult, but there are ways to increase your odds. Some take longer than others, but all are worth considering.<\/p>\n Apply with a cosigner or co-borrower<\/p>\n<\/li>\n Opt for a smaller loan amount<\/p>\n<\/li>\n Consider secured options that require collateral<\/p>\n<\/li>\n Pay down your debt before applying<\/p>\n<\/li>\n Take steps to improve your credit score<\/p>\n<\/li>\n Shop around until you find the right lender<\/p>\n<\/li>\n Consider enrolling in Experian Boost to build credit from on-time utility payments<\/p>\n<\/li>\n<\/ul>\n Bad credit loans expensive but accessible<\/strong><\/p>\n If you\u2019re in the market for a bad credit loan, you\u2019re not alone. Data from TransUnion\u2019s Q2 2025 Credit Industry Insights Report breaks down the terms borrowers receive on bad credit loans.<\/p>\n The average repayment term offered to borrowers with bad credit is 13.9 months.<\/p>\n<\/li>\n The average APR is 27.1 percent for scores between 601-660, which means you can expect rates closer to 30 percent if your score is below 600.<\/p>\n<\/li>\n The average loan balance is $5,900 for subprime borrowers.<\/p>\n<\/li>\n More than a third (35.4%) of all new personal loans go to subprime borrowers.<\/p>\n<\/li>\n<\/ul>\n A personal loan for bad credit may be a great tool to simplify your finances and improve your credit scores over time. That said, you should weigh the drawbacks of adding a fixed monthly payment to your budget before you make a final decision.<\/p>\n You may pay origination fees as high as 12 percent of your loan amount. These fees typically come out of your loan funds before you receive them, meaning you have less cash for debt consolidation, home improvement or emergency costs.<\/p>\n Never pay out-of-pocket fees for approval. All fees should be deducted from your loan proceeds. Run away from a company that pressures you to pay advance fees for any bad credit loan.<\/p>\n Lenders that offer personal loans for bad credit borrowers usually cap amounts at $50,000. The amount may be significantly lower if you have a very low credit score \u2014 anything below 580 \u2014 or a high DTI ratio.<\/p>\n A low credit score tells lenders that you may have had difficulty managing your credit in the past. As a result, you may only be offered a shorter repayment term \u2014 three to five years, versus the six or seven year terms offered to good- or excellent-credit borrowers.<\/p>\n The good news is that if your credit score improves over time, you can refinance your personal loan to a longer term and use the savings to pay your loan balance off faster.<\/p>\n There are a number of alternatives to choose from if a bad-credit personal loan isn\u2019t the right fit for you. These are three common options, but taking out a HELOC or borrowing money from friends and family could also meet your needs.<\/p>\n Credit cards: <\/strong>Although they have high (and variable) interest rates, credit cards can be a useful tool if you manage payments responsibly. Not only will on-time payments improve your credit score, but you\u2019ll have flexible access to funds as you need them. However, if you can\u2019t pay the balance off each month, they can tank your credit scores quickly.<\/p>\n<\/li>\n BNPL loans: <\/strong>A buy-now, pay-later (BNPL) loan lets you split a large purchase into a few smaller chunks. They are typically offered by online retailers for bigger purchases, and many don\u2019t require a credit check.<\/p>\n<\/li>\n Payday Alternative Loan (PAL)<\/strong>: Check to see if your local credit union offers Payday Alternative Loans \u2014 while you will have to undergo a credit check, eligibility requirements are must less stringent than on personal loans. PALs offer repayment terms of up to 12 months and amounts up to $2,000, and rates are capped at 28 percent \u2014 compare this to the 400 percent APR and two-week repayment cycle of a payday loan.<\/p>\n<\/li>\n<\/ul>\n Learn more: Alternatives to bad credit loans<\/p>\n Getting a personal loan with bad credit should be part of a financial plan focused on improving your credit in the future. However, if you\u2019re in an urgent cash crunch, they may provide much-needed money to pay for an unexpected expense.<\/p>\n Compare lenders to find the one that offers you the best deal. While you may not qualify for the most competitive rates, you can still explore options that fit your budget.<\/p>\n Can I get a $2,000 loan with bad credit?<\/strong><\/p>\n Yes, some of the best lenders for bad credit loans include Upgrade, Avant, Upstart, Best Egg, OneMain Financial and LendingPoint, all of which offer loans of $2,000 or below. A small personal loan will be easier to qualify for with bad credit than a large loan amount.<\/p>\n<\/li>\n Can I apply for a loan with a 500 credit score?<\/strong><\/p>\n You can apply for a loan with a 500 credit score, but your borrowing options are limited. Most lenders (even those that work with bad credit borrowers) require a minimum score closer to 580.<\/p>\n<\/li>\n What is the lowest credit score for getting a personal loan?<\/strong><\/p>\n The minimum credit score requirement varies by lender. Some require a score of at least 600, while others will lend to someone with a 300 credit score. However, most require a score of 580 or better. You can find personal loan options with bad credit, but be prepared to do more research and receive higher rates.<\/p>\n<\/li>\n What\u2019s the easiest loan to get with bad credit?<\/strong><\/p>\n Payday loans are among the easiest loans to get approved for with bad credit \u2014 but should only be considered as a last resort. This form of financing can be predatory, with rates over 400 percent and full repayment due in just two weeks. Although personal loans for borrowers with bad credit have a few more hoops to jump through, they are a safer option when compared to payday loans.<\/p>\n<\/li>\n<\/ul><\/div>\n\n
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