Can You Get a Personal Loan With Bad Credit? What To Know
Yes, you can get a personal loan with bad credit, but it can be challenging to find a lender who'll work with you. It's also more likely that your loan amount will be low and your interest rates will be high. That's because people with low credit scores are considered risky borrowers and less likely to repay what they owe.
Read on to learn more about how you can get a personal loan with bad credit.
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.
Key Takeaways
You can get a personal loan with bad credit, but rates and fees may be higher. Some lenders work with borrowers who have lower credit scores, though loan amounts and repayment terms may be more limited.
Compare lenders based on more than just annual percentage rate (APR). Review loan amounts, fees, repayment terms and funding timelines to find an option that fits your needs and budget.
A co-signer, collateral or smaller loan amount may improve your approval odds. Prequalifying with multiple lenders can also help you compare potential rates and terms without affecting your credit score.
Watch for predatory lenders and consider alternatives before borrowing. APRs above 36%, guaranteed approval claims and pressure to sign quickly are warning signs, while credit unions, cash advance apps and local assistance programs may offer other options.
Summary generated by AI, verified by MoneyLion editors
What Counts as Bad Credit for a Personal Loan?
A FICO score between 669 and 580 is considered fair, and a score under 579 is considered poor. Once your score dips into the poor range, approval gets harder and rates climb.
Score Range | FICO Rating |
|---|---|
800 or higher | Exceptional |
740 to 799 | Very good |
670 to 739 | Good |
580 to 669 | Fair |
579 or lower | Poor |
Good To Know
VantageScore and FICO use different credit scoring models, so your score may vary between the two. Both consider factors like payment history, credit utilization and account age, but weigh them differently.
What Lenders Look At
Before applying, review the personal loan requirements lenders commonly consider.
Factor | Why It Matters | What Lenders Want To See |
|---|---|---|
Credit score | Shows how reliable you are in terms of your credit | Ideally a credit score above 670 |
Payment history | Shows how timely you are with payments | Lenders don’t want to see recent missed payments or delinquencies |
Income | Having reliable cash flow to cover bills | Steady income to prove you can pay the loan back |
Utilization | Demonstrates how much credit you're relying on | A credit utilization rate below 30% |
Employment status | Signals income stability | Full-time employment preferred |
Credit history length | Longer history shows consistency | Older accounts help lenders see your record |
Recent credit inquiries | Multiple inquiries may signal financial distress | Lenders want to see limited inquiries |
Bankruptcy | Shows inability to manage finances | Lenders will only extend credit after one to two years post-discharge |
What To Expect When Applying With Bad Credit
Knowing what to expect can help you compare loan offers more confidently. The table below highlights some common differences for borrowers with bad credit.
Factor | What To Expect With Bad Credit |
|---|---|
APR | Typically 20% to 36% |
Loan amount | Often $5,000 to $10,000 for unsecured loans |
Fees | Origination fees of up to 10% may apply |
Repayment terms | Often 12 to 48 months |
Approval timeline | Often same day to several business days |
Keep in Mind
A score near 500 can limit your borrowing options and lead to higher rates. Consider prequalifying with multiple lenders to compare potential offers without affecting your credit score.
Best Personal Loans for Bad Credit
Some lenders work with borrowers who have lower credit scores. Here's how their loan amounts, APRs and features compare.
Lender | Loan Amount | APR Range | Best For |
|---|---|---|---|
Happen Bank (formerly known as Lending Club) | $1,000 to $75,000 | 5.96% to 35.99% | Larger loans and joint applications |
Avant | $2,000 to $35,000 | 9.95% to 35.99% | Fast lending decisions |
OneMain Financial | $1,500 to $30,000 | 11.99% to 35.99% | Secured loan options |
Personalloans.com | $250 to $35,000 | 5.99% to 35.89% | Comparing multiple loan offers |
NetCredit | Up to $10,000 | 34.99% to 99.99%, varies by state | Smaller emergency loans |
Rise | $500 to $5,000 | 36% to 299%, varies by state | Small loans as a last resort |
LendingPoint | $1,000 to $36,500 | 7.99% to 35.99% | Smaller loan amounts |
Upstart | $1,000 to $75,000 | 6.30% to 35.99% | Borrowers with a limited credit history |
Prosper | $2,000 to $50,000 | 8.99% to 35.99% | Joint applications for fair-credit borrowers |
Happen Bank
Larger loan amounts
Joint applications available
Potential rate reduction
Avant
Fast lending decisions
Online application process
OneMain Financial
Secured loan options
Co-applicants accepted
Personaloans.com
Access to multiple loan offers
Short-term borrowing options
NetCredit
Smaller emergency loans
Fast funding options
Rise
Option to cancel loans without incurring fees
LendingPoint
Low minimum loan amount
AI-assisted underwriting
Upstart
Approval considers more than credit scores
Fast funding options
Prosper
Strong customer ratings on TrustPilot
Payment reporting to all three credit bureaus
Personal Loans vs. Credit Cards: What's the Difference?
Personal loans and credit cards both let you borrow money, but they differ in how you repay the debt. Personal loans have fixed monthly payments and repayment terms, while credit cards offer more flexible repayment options. Here's how the costs compare when paying off a $10,000 balance.
| Credit Card: Minimum Payments | Credit Card: Three-Year Payoff | Personal Loan |
|---|---|---|---|
APR | 22% | 22% | 12% |
Monthly payment | $283 | $382 | $332 |
Total interest paid | $17,266 | $3,749 | $1957 |
Time to pay off | About 25 years | 3 years | 3 years |
Choose a Personal Loan If
You can afford a fixed monthly payment.
You qualify for a meaningful lower APR than your credit cards charge.
You're consolidating several debts and want to manage a single payment.
Choose a Credit Card If
You can pay off the balance within a few months.
You qualify for a 0% intro APR credit card and can pay off the balance during the promotional period.
You need flexible access to credit.
How To Give Yourself the Best Shot at Getting Approved
A stronger application can improve your chances of approval. Here are a few steps you can take to improve your odds before applying.
Apply With a Co-Signer If
Your credit score isn't strong enough to qualify on your own.
You have a willing co-signer who understands they'll be responsible for repayment.
Consider a Secured Loan If
You want to improve your approval odds or qualify for a lower APR.
You own an eligible asset, such as a vehicle or savings account.
You understand the lender can seize your collateral if you default.
Lower Your Debt-to-Income If
Your current debt payments take a large portion of your income.
You have time to pay down existing balances or increase your income before applying.
Apply for a Smaller Loan If
You can cover part of the expense with savings or other funds.
You want to reduce your monthly payment and improve your odds of being approved.
Prequalify First If
You’re unsure which lenders may offer the best rates, especially if you're comparing options for an emergency loan with bad credit.
You want to see the terms before hard inquiries on your credit.
Watch Out for Predatory Lenders
Not every lender has your best interests in mind. Watch for these warning signs before accepting a loan offer.
Warning Sign | What It May Mean |
|---|---|
Aggressive sales tactics | You are required to sign the loan without having time to read the terms |
Prepayment penalties | Paying the loan early results in lender fees |
Easy to get approved | Be wary of loans that require no credit check, income verification or other terms too good to be true |
Consumer complaints | If a lender has several complaints at the Better Business Bureau (BBB) or Consumer Financial Protection Bureau (CFPB), it may be a sign of a predatory lender |
Unexpected changes to loan terms | The lender attempts to change your agreement after you've signed or pressures you into accepting different terms |
Balloon payments | You make small payments and then are hit with an exorbitantly high payment at the end of the loan |
Alternatives if a Personal Loan Isn't the Right Move
Before taking out a bad credit personal loan, consider whether one of these alternatives better fits your situation.
Option | How It Works | Best For |
|---|---|---|
Member-owned institutions that typically offer lower rates and more flexible underwriting than banks | Borrowers who have damaged credit and qualify for membership | |
• Backed by collateral that the lender can claim if you default • Lower rate than unsecured bad credit loans | Borrowers with collateral who want better approval odds | |
Provide small cash advances, typically between $50 and $500, that are repaid from your next paycheck | Covering a small, short-term cash shortage | |
Borrowing from family or friends | You request money from friends and family | Borrowers with a trusted friend or family member |
Local assistance programs | Government agencies, charities and nonprofits may help cover essential expenses such as rent, utilities or medical bills | Borrowers facing a specific financial hardship |
Pro Tip
Hybrid loans may be worth exploring. These loans typically start with a fixed interest rate before switching to a variable rate, so be sure to understand how your payments can change over time.
How To Apply for a Personal Loan With Bad Credit
Applying for a personal loan with bad credit is straightforward. Follow these steps to get started.
Check your credit report and score: Review your credit reports for errors and understand where your score stands before applying.
Determine how much you need to borrow: Borrow only what you need to avoid unnecessary interest costs. That goes for any big-ticket purchase, whether it’s a mattress, appliance or computer — plan to borrow only what you truly need.
Set an APR ceiling: Avoid loans with APRs above 36%, which may indicate predatory lending.
Compare lenders: Focus on lenders that work with borrowers who have bad credit.
Prequalify with at least three lenders: Compare APRs, terms and monthly payments using soft credit checks.
Look at your total cost: Consider interest, origination fees and other borrowing costs.
Watch for additional fees: Look for late fees, application fees and prepayment penalties.
Choose the shortest term you can afford: Assess your budget and pick the shortest term that works with your entire financial picture.
Gather your documentation: Have your ID, proof of income, bank statements and any other required documents ready.
Submit your application: Apply with the lender that offers the best overall terms.
Review the loan agreement before accepting: Make sure you understand the full terms and fees before signing.
Documents You'll Need To Apply
Before you apply, make sure you have the following documents on hand.
A government-issued photo ID
Recent pay stubs or proof of income
Recent bank statements
A copy of your credit report
How To Rebuild Your Credit After Taking Out a Loan
Building your credit takes time, but small, consistent habits can make a meaningful difference. Here's a simple 90-day plan to help you get started.
Pull your credit report to determine your credit score.
Check for any errors and report those to the credit bureaus.
Continue to make all your payments on time.
Avoid new hard credit inquiries.
Keep your debt utilization low — aim for a rate under 30%.
Bad-Credit Personal Loan FAQs
Can you get a personal loan with bad credit?
You can get a personal loan with bad credit, but you may have a higher APR and shorter repayment terms.
What credit score do you need for a personal loan?
There isn't a universal minimum credit score for a personal loan. Each lender sets its own requirements, but borrowers with higher credit scores generally qualify for lower interest rates and better loan terms.
Why are personal loans more expensive with bad credit?
Lenders are taking a risk when they extend a loan to you. If you have bad credit, lenders want to offset that risk because there is a higher likelihood of missed payments or default.
Does applying for a personal loan hurt your credit score?
Prequalifying won’t hurt your credit score, but once you apply a hard inquiry will cause your credit score to drop.
Can a co-signer help me get approved?
A co-signer may improve your chances of securing better terms because their credit is considered alongside yours. Just keep in mind it does not guarantee that funds will be approved or disbursed.
How much money can I borrow with bad credit?
Most lenders will allow borrowers to borrow $5,000 to $10,000. Loan amounts depend on your income, debt and your credit score.
Key Terms
Personal loan: An installment loan from a bank, credit union or online lender repaid in fixed monthly payments. It may be secured by collateral or unsecured, meaning no collateral is required.
Bad credit: A FICO score below 580, which most lenders classify as poor. Scores from 580 to 669 are considered fair.
FICO score: A widely used credit scoring model that runs from 300 to 850 and helps lenders assess how likely a borrower is to repay a debt on time.
Co-signer: A person who signs a loan application alongside the primary borrower and agrees to share repayment responsibility. Their credit is factored into the lender's approval decision.
Collateral: An asset — such as a car or home — pledged to secure a loan. If you default, the lender can claim that asset to recover what it's owed.
Origination fee: A one-time upfront charge a lender applies to process a new loan, typically calculated as a percentage of the loan amount and deducted from your funds before disbursement.
Unsecured loan: A loan not backed by collateral, approved based on creditworthiness alone. Unsecured personal loans typically carry higher interest rates than secured alternatives.
Summary generated by AI, verified by MoneyLion editors
Sources
myFICO. "What is a Credit Score?"
CFPB. 2023. "What Is a Debt-to-Income Ratio?"
CFPB. 2024. "What Is a Prepayment Penalty?"
Photo Credit: Twin Sails / Shutterstock.com
Data is accurate as of Oct. 12, 2026, and is subject to change.
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