Can You Get a Personal Loan With Bad Credit?

It's not impossible to get a personal loan with bad credit, but it can be more difficult to find a lender that will work with you. It's also more likely that your loan amount will be low and your interest rates will be high. This is because people with low credit scores are considered risky borrowers who are less likely to pay back their loan.

A credit score between 669 and 580 is considered fair and a score under 579 is considered poor. Once your score is under 600, you'll start to have trouble getting approved for financing.

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 Do Lenders Look At When You Apply For a Loan?

Lenders don't publish their official requirements to get approved for a loan, but they're usually looking at a combination of:

• Your monthly income

• Your DTI (debt-to-income ratio) or how much of your income do you have to put toward your debt each month

• Your credit score and credit history

These factors will determine if your loan application gets approved, how much money you can borrow, how flexible your repayment terms are and how much interest you pay.

What To Consider When Getting a Loan With Bad Credit

High Interest Rates

The interest rates on your loan are based on the amount you want to borrow and your creditworthiness. Low interest rates are usually 7%. You're also more likely to have higher interest rates if you choose an unsecured loan over a secured loan.

Loan Amount

The biggest loans are reserved for borrowers who make a lot of money and have a good credit history. You might have trouble getting approved for more than $1 to $2,000.

Fees

The lenders that are more likely to work with borrowers with bad credit probably charge a lot of extra fees. You might see origination fees, prepayment fees and other types of administration fees.

Repayment Terms

Because interest rates will be so much higher, it's extremely important that you try to pay back the loan as fast as possible.

How To Make It Easier To Get a Personal Loan With Bad Credit

In order to get better terms, you can:

• Get a co-signer or co-applicant. This combines your credit scores with the other people on the application. If they have a better score, you can get better terms.

• Put up collateral. Collateral is an asset of value, like a car or a house. that the lender can claim if you can't pay back your loan. This can help you get approved and may even get you lower interest rates.

• Improve your DTI. Although this can take longer, getting your debt-to-income ratio lower than 36% can help you get better loan terms. You can do this by not taking on more debt, paying down the debt you have or increasing your monthly income.

Alternatives To a Personal Loan If You Have Bad Credit

If getting a loan isn't possible or too expensive, consider:

• Selling your assets for extra cash

• Getting a side job

• Fill out a paid survey

In the meantime, work on raising your credit score. You can do that by paying all of your bills on time and paying down your debt. Over time, you'll start to see your credit score get higher.

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