A low credit score can make it challenging to get approved for a personal loan, but it is not impossible. Many lenders offer loans specifically designed for individuals with poor or fair credit. If you need financing for an emergency expense, debt consolidation, or a major purchase, you can still find options that suit your needs.
In this guide, we will explore how to get a personal loan with a low credit score, the best lenders for bad credit, strategies to improve your chances of approval, and alternative financing options.
What is Considered a Low Credit Score?
Credit scores typically range from 300 to 850 and are classified as follows:
- Excellent (800 – 850)
- Very Good (740 – 799)
- Good (670 – 739)
- Fair (580 – 669)
- Poor (300 – 579)
If your credit score falls below 670, lenders may consider you a higher-risk borrower. However, many lenders still offer personal loans for individuals with fair or poor credit, though the interest rates may be higher.
Steps to Get a Personal Loan with a Low Credit Score
1. Check Your Credit Report and Score
Before applying for a personal loan, review your credit report to understand where you stand. You can get a free credit report from websites like:
- AnnualCreditReport.com (official site)
- Experian, Equifax, and TransUnion (major credit bureaus)
Look for any errors or inaccuracies on your credit report, such as incorrect late payments or accounts that do not belong to you. Disputing these errors can help improve your score.
2. Research Lenders That Accept Low Credit Scores
Not all lenders require excellent credit. Some specialize in bad credit loans and consider factors beyond your credit score, such as your income and employment history.
Here are some of the best lenders for low credit score personal loans in 2025:
1. Upgrade
- APR: 8.49% – 35.99%
- Loan Amount: $1,000 – $50,000
- Minimum Credit Score: 560
- Why Choose Upgrade? Accepts fair and bad credit borrowers, offers free credit monitoring.
2. LendingPoint
- APR: 7.99% – 35.99%
- Loan Amount: $2,000 – $36,500
- Minimum Credit Score: 580
- Why Choose LendingPoint? Quick approvals, lenient credit requirements.
3. OneMain Financial
- APR: 18.00% – 35.99%
- Loan Amount: $1,500 – $20,000
- Minimum Credit Score: No minimum score required
- Why Choose OneMain? Provides secured and unsecured loan options.
4. Avant
- APR: 9.95% – 35.99%
- Loan Amount: $2,000 – $35,000
- Minimum Credit Score: 580
- Why Choose Avant? Flexible repayment options and fast funding.
5. OppLoans
- APR: 59.00% – 160.00%
- Loan Amount: $500 – $4,000
- Minimum Credit Score: No credit check required
- Why Choose OppLoans? Best for no-credit-check emergency loans.
3. Improve Your Approval Chances
Even with a low credit score, you can take steps to increase your chances of getting approved:
A. Apply with a Co-Signer
A co-signer is someone with a good credit score who agrees to take responsibility for the loan if you fail to repay it. This can help you secure better terms and lower interest rates.
B. Opt for a Secured Personal Loan
A secured loan requires collateral, such as a car, savings account, or certificate of deposit. This reduces the lender’s risk and increases your chances of approval.
C. Show Proof of Stable Income
Lenders may approve your application if you have a steady job, stable income, and low debt-to-income ratio (DTI). Be prepared to provide:
- Pay stubs
- Tax returns
- Bank statements
D. Reduce Your Debt-to-Income Ratio
The DTI ratio is the percentage of your monthly income used for debt payments. A lower DTI ratio shows lenders that you can manage additional debt.
E. Prequalify for a Loan
Many lenders allow you to prequalify without affecting your credit score. This gives you an idea of your potential loan terms before applying.
4. Compare Loan Offers
When choosing a personal loan, consider the following factors:
- Interest Rate (APR): Look for the lowest possible rate to reduce borrowing costs.
- Loan Terms: Choose a repayment term that fits your budget (e.g., 12-60 months).
- Fees: Check for origination fees, late fees, and prepayment penalties.
- Funding Speed: Some lenders offer same-day or next-day funding.
Alternatives to Personal Loans for Bad Credit
If you cannot qualify for a traditional personal loan, consider these alternatives:
1. Credit Union Loans
Credit unions often have more flexible lending criteria than banks and offer lower interest rates for members.
2. Payday Alternative Loans (PALs)
Offered by credit unions, PALs provide small-dollar loans at lower interest rates than payday loans.
3. Home Equity Loan or Line of Credit (HELOC)
If you own a home, you can borrow against your home equity at a lower interest rate.
4. 0% APR Credit Cards
If you qualify, a 0% APR credit card can provide interest-free financing for a promotional period.
5. Family and Friends
Borrowing from family or friends may be an option, but make sure to establish clear repayment terms.
How to Avoid Predatory Lenders
When applying for a personal loan with bad credit, be cautious of lenders that:
- Charge excessive interest rates (above 36% APR)
- Require upfront fees before loan approval
- Lack proper licensing or have bad reviews
- Offer no clear repayment terms
Check reviews on websites like the Better Business Bureau (BBB) and Trustpilot before choosing a lender.
