Where can you find a loan if you have a credit score of 500? While many lenders require borrowers to have fair, good, or excellent credit, loan options exist for people with poor credit, which is a FICO score of 580 or less. But getting approved can be a challenge and getting a competitive rate, even harder.
We’ll cover the best loan types for bad credit with reasonable rates, plus tips to improve your chances of getting approved for a loan with bad credit.
500 credit score loan options
The lower your credit score, the fewer loan options you have. However, borrowers with 500 credit scores will have a better chance of approval with the following loan types:
- Secured personal loans: Secured personal loans require you to pledge collateral, such as a vehicle, savings account, collectible, piece of jewelry, or even the fixtures in your home. If you default, the lender can take ownership of your collateral and use it to recover the amount you owe.
- Cosigned loans: A cosigned loan involves you applying with someone else who has good credit — the cosigner — who promises to pay off the loan if you can’t.
- Loans with a co-borrower: A co-borrower refers to a person who applies for a loan with you. Unlike a cosigner, co-borrowers have equal access to the loan funds.
- Payday alternative loans (PALs): PALs are small, unsecured loans offered through federal credit unions. Loan amounts range up to $2,000, have terms from 1 to 12 months, and are designed to be more affordable than payday loans.
- Credit-builder loans (CBLs): CBLs are designed to help you build credit, but don’t offer funds upfront. Instead, a lender moves your loan funds into a locked savings account. You then make installment payments over a term, often 6 to 24 months. You either receive the principal in installments every time you make a payment, or you get the entire loan amount once payments are complete. Payments are reported to the major consumer credit bureaus.
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Lenders for bad credit
When you’re looking to get a loan with bad credit, you’ll have a higher likelihood of success if you apply with lenders that cater to borrowers with low credit scores or if you apply with a cosigner with good credit or a co-borrower with good credit. To quickly find out which lenders you’re most likely to qualify with, prequalify first. You can do this on many lender websites or you can check prequalified rates below.
Prequalification doesn't hurt your credit, but it’s not a loan offer. Note that once you complete a full loan application, the lender will conduct a hard credit check, which could temporarily ding your credit score.
Here are a few lenders that might approve you with a FICO score in the mid 500s:
3.93.9
Credible rating
Fixed (APR)
7.80% - 35.99%
Loan Amounts
$1000 to $50000
Min. Credit Score
620
Check Rates
on Credible’s website
View Details
Overview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Loan amount
$1,000 to $50,000
Fees
Origination fee
Discounts
None
Eligibility
Available nationwide
Min. income
$12,000
Customer service
Phone, email
Soft credit check
Yes
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Read full review
Fixed (APR)
9.95% - 35.99%
Loan Amounts
$2000 to $35000
Min. Credit Score
550
Check Rates
on Credible’s website
View Details
Overview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
Loan amount
$2,000 to $35,000**
Fees
Origination fee, late fee, dishonored payment fee
Discounts
None
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, and WV
Min. income
$1,200 monthly
Customer service
Phone, email
Soft credit check
Yes
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Repayment terms
1 to 5 years (2 to 5 years through Credible)
Read full review
4.34.3
Credible rating
Fixed (APR)
11.69% - 35.99%
Loan Amounts
$1000 to $50000
Min. Credit Score
560
Check Rates
on Credible’s website
View Details
Overview
Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.
Loan amount
$1,000 - $50,000
Repayment terms
3, 5, or 7 years
Fees
Origination fee
Discounts
Autopay and direct pay
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Min. income
None
Customer service
Phone, email
Soft credit check
Yes
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Read full review
3.93.9
Credible rating
Fixed (APR)
18.00% - 35.99%
Loan Amounts
$1500 to $20000
Min. Credit Score
540
Check Rates
on Credible’s website
View Details
Overview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.
Loan amount
$1,500 to $20,000
Fees
Origination fee, unsuccessful payment fee, late fee
Discounts
None
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Min. income
Does not disclose
Customer service
Phone, email
Soft credit check
Yes
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Read full review
All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms
If you’re interested in a loan with Upstart, you may need to apply directly on the lender’s website if your score is below 620.
How does your credit score impact personal loan options?
Lenders often set a minimum credit score to qualify for a personal loan. For example, U.S. Bank requires a minimum score of 660 for existing customers and 720 for everyone else. As a result, your credit score plays a key role in the personal loans that are available to you. That said, not all lenders require a specific minimum credit score. Some, like OneMain Financial, are more lenient and consider your score without drawing a hard line on where it needs to sit.
How to improve your loan application
Along with your credit score, lenders consider other factors during the loan application process such as your annual income, debt-to-income ratio (DTI), income stability, payment history, credit account history, and more. You can strengthen your application by showing that you’re financially responsible and stable in various areas, or by applying with someone who is.
Learn More: Ways To Improve Your Personal Loan Application
Note
Your DTI is calculated by dividing your minimum monthly debt payments by your gross monthly income.
For example, if you’ve made credit mistakes in the past but have made all of your payments on time for the last year, that’s a good sign for potential lenders. Other good signs are having a steady income source and a DTI below 35%. But even so, you’re most likely to get approved if you can apply with someone else who has good credit — either as a co-borrower or cosigner.
Just know that if you can’t afford the payments, that person’s credit — and possibly your relationship with them — will suffer. In other words, don’t take out any loan you can’t afford to repay, especially if it would put someone else’s finances at risk.
How to rebuild your credit
It can take time to improve your credit score and history, but there are a couple of quick-win ways to boost your score:
- Use a service that reports rent and utility payments to the credit bureaus, like Experian Boost (free) and CreditRentBoost (fee-based).
- Become an authorized user on someone’s else’s credit card with a high available credit limit. This one is best if your own credit utilization is high. As an authorized user, the available credit on the card will increase your available credit, thereby decreasing your credit utilization — which can contribute up to 30% to your credit score.
Warning
If you become an authorized user on someone’s credit card to boost your score, don’t use that credit card.
When it comes to building (and keeping) good credit long term, employ these tried and true strategies:
- Don’t rely on credit, use it as a tool to improve your score by paying off new charges in full every month.
- Make all payments on time.
- Pay down your credit card balances, or consolidate your debt.
- Leave revolving credit accounts open (but use them sparingly and/or pay them off in full each month).
- Minimize your debt-to-income ratio by increasing your income and/or paying off debt.
- Limit hard credit inquiries by prequalifying with multiple lenders before applying for a loan.
- Build credit with a secured credit card and CBL.
As you work on building credit, keep tabs on your scores and reports. Seeing the results of your actions can help keep you motivated and on track.
FAQ
Can I get a personal loan with a 500 credit score?
You may be able to get a personal loan with a 500 credit score. Various lenders make financing available to credit-challenged borrowers. For example, Upstart allows credit scores as low as 300 if you apply directly on its website. But you’ll improve your chances of qualifying if you apply for a loan with a cosigner who has good credit.
Where can I get a personal loan with bad credit?
If you have bad credit, you may still be able to get a personal loan from lenders that have flexible eligibility requirements. For example, OneMain, Avant, Upstart, and Universal Credit all cater to borrowers with less-than-perfect credit.
How can I get a loan with bad credit fast?
You may be able to get a traditional personal loan as soon as the same day you apply. But if you have bad credit, you may need strong compensating factors like a high income, or a co-borrower or cosigner with excellent credit. Otherwise, the process could take a few days to a week, if you’re approved. If you need less than $2,000, consider applying for a payday alternative loan with a credit union. Interest rates are capped at 28%, which is much lower than the triple-digit APRs you’ll find with payday loans.
Related Articles:
- Types of Bad-Credit Loans
- Best Hardship Loans for Bad Credit
- Best Installment Loans for Bad Credit
- Personal Loan With a 550 Credit Score
- No-Credit-Check Loans
- No-Credit-History Loans
- Low-Income Personal Loans
Meet the expert:
Jessica Walrack
Jessica Walrack is a freelance finance writer and journalist with over a decade of experience. During that time, she’s written hundreds of articles about loans, insurance, banking, mortgages, credit cards, budgeting, and taxes for well-known publications including CBS News MoneyWatch, USA Today, US News and World, Investopedia, and The Balance Money.
