Can I Get a Personal Loan With a 500 Credit Score?

When your credit score falls between 300 and 579, it's rated as "very poor," according to the FICO credit-scoring model. Having a 500 credit score means that many lenders will be unwilling to lend you money because of the financial risk you pose.

In the event that you can get a personal loan, the terms might not be very good.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

What Loan Companies Work With a 500 Credit Score?

Your options for personal loans are extremely limited when you have a 500 credit score. Some lenders will take into account other factors when considering your application, like your income or education level.

Even so, the lender has minimum credit requirements applicants must meet. For example, you can't have any currently delinquent accounts or bankruptcies that occurred within the last 12 months.

Personal loan lenders for poor credit include Upstart, OneMain Financial and LendingPoint.

However, before applying for a personal loan with any lender, it's important to research and compare the terms and rates the lender offers, including any origination fees and late fees. For example, Upstart offers annual percentage rates between 4.6% and 35.99%, and borrowers with lower credit scores need to expect rates on the higher end of the range. Also, check customer reviews on platforms like Trustpilot to find out how other people have fared with the lender.

Will Traditional Banks Approve Personal Loans With a 500 Credit Score?

Unfortunately, it's unlikely that a traditional bank, such as Chase, Wells Fargo or your hometown banking institution, will be willing to approve a personal loan with a 500 credit score.

Borrowers with low credit scores are considered risky and more likely to default on their loans.

Can I Get a Personal Loan With a 500 Credit Score and a Co-Signer?

If your credit score is poor, having a co-signer might help you get approved depending on the lender. However, the co-signer must have good credit and understand that they will be responsible for making the payments on the loan if you cannot.

How To Apply for a Personal Loan With a 500 Credit Score

If you've decided to apply for a personal loan, see if the lender will let you check your rate before you officially apply and your credit report is pulled. You can potentially do this for several different lenders without any impact on your credit report to help you make a decision about which lender to go with.

Once you've decided on a lender, here's how to apply:

1. Gather all of the required documents, such as identification and proof of income.

2. Fill out the loan application and sign it.

3. If you are approved, carefully review the loan's terms and conditions.

4. Sign the loan documents, and make plans for repayment.

What About Quick Loans or Bad Credit Emergency Loans?

While these might be considered loans that are easy to get, payday loans, for example, could have an APR of up to 400%, which is over 10 times higher than a personal loan APR of 36%.

Additionally, these types of loans are usually for low amounts, such as a few hundred dollars, and must be paid back quickly. You could easily sink yourself in a never-ending cycle of debt with these types of loans.

Other Options for Personal Loans

Other options for personal loans include:

• Secured loans

• Making an arrangement with a family member or friend

• Applying with a credit union or peer-to-peer lending options

If you have a friend or family member who is willing to lend you the money you need, it's smart to have a written agreement that you both sign that details the date and amount of the loan, a payment schedule and any interest or fees.

Takeaway

Although securing a personal loan with a 500 credit score is possible, it will be challenging. You will face limited options and less favorable terms than someone with fair or good credit.

If the loan amount, terms and rates you are offered with a 500 credit score are not what you're willing to accept, you may want to hold off and work on improving your credit score.

Making all of your payments in full and on time, reducing your existing debt and waiting for things like bankruptcies and charge-offs to drop off your credit report can all help give your credit score the boost it needs to get more favorable personal loan offers.

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