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If your score is below that, it'll be hard to qualify for a personal loan – and for a good reason. Over 60 percent of consumers with poor credit scores become delinquent on an account, according to MyFICO.com. To lenders, your credit score is an indicator of whether you'll repay your loan.
Looking for a low-interest personal loan? Do you have less-than-perfect credit and are struggling to find a lender? That’s where LendingTree’s personal loan shopping tool can help. LendingTree, you could even qualify for a loan with an interest rate under 6%.
When you’re shopping for low-credit-score personal loans, you probably won’t have an abundance of options. And you should expect to make some tradeoffs, like paying high interest rates or even offering collateral.
But there are some strategies you can try to get a personal loan with poor credit.
If you can’t rely on your own credit score to get a personal loan, try borrowing someone else’s good credit with a cosigner. A cosigner is a third party (usually a close family member or friend) who has agreed to repay your loan if you should default on it.
Choose a lender that accepts cosigners for personal loans, like Earnest or Citizens Bank. You’ll need to ask someone with good credit to act as your personal loan co-applicant. Their positive history will help offset your poor credit score, increasing your chances of approval.
If a lender does not accept cosigners for whatever reason and you're having a hard time meeting minimum income requirements, see if the lender will consider spousal income. OppLoans is a lender that allows applicants to report spousal income on their personal loan applications for approval.
Getting a personal loan from an individual usually doesn’t include a credit check. You can ask a family member or friend who has the cash to lend it to you.
Before you borrow this way, fully outline and agree on the terms ahead of time. And keep up on payments to ensure the loan doesn’t hurt the relationship.
But you might be able to borrow against an asset to get a secured loan, including:
If you apply for a personal loan and get rejected, you can always follow-up with the lender and ask them to reconsider, according to Debt.org.
First, you’ll want to make sure you have some good reasons why they should approve your for a loan – despite your bad credit. What other financial factors show you’re a safe bet? What additional information can you give that proves you’re a responsible borrower?
Last but not least – don’t sign up for a predatory loan just because you really need cash now. This includes payday loans, car title loans or advance-fee loans; they're among the most expensive ways to borrow.
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Bad credit or no credit makes it tough – but not impossible – to get a loan. Credit unions, home equity and peer-to-peer loans or even debt consolidation with no loan could improve your credit rating and increase your future options.
Bad credit loans are a relief option for consumers whose low credit scores limit their borrowing options.
So if you suddenly need money to buy or repair a car; make payments on a medical bill or consolidate credit card debt, but don’t have a high enough credit score to get a loan from one of the big banks, don’t give up. There is help available.
Bad credit loans are treated the same as personal loans. They are money you borrow and pay back in fixed monthly installments. The loan could come from a bank, but if you’re looking for an affordable interest rate and flexible qualifying requirements, the better choices probably would be:
You could add more options like payroll advances, loans from retirement accounts or borrowing against life insurance to the list, but those are last-ditch choices best left untouched unless everything else fails.
Credit scores are an attempt to gauge the likelihood you will repay a loan. The higher your number, the more likely you will repay.
People in this category are considered a high risk and pay the highest interest rates. They are prime candidates for bad credit loans.
Consumers in the good-to-excellent credit score category receive the lowest interest rates and best loan terms. Consumers in the poor and extremely poor categories are burdened with high rates and may not be approved for a loan at all.
Still, that’s a 91-point difference, which is very costly when you are shopping for home and auto loans as the graphic below demonstrates.
If this is not an emergency, the first step to get a loan with a bad credit is to improve your credit score so you can comfortably afford the loan you need.
If, however, this is an emergency and your application for a loan has been turned down repeatedly due to poor credit or no credit, it might help to ask a bank or credit union loan officer for an in-person interview to convince them you are creditworthy.
The purpose of an in-person interview is to convince the lender that if you receive a loan, you can comfortably make payments. Any evidence you have that can support that fact – especially proof that you paid off loans on assets like a car, motorcycle or boat in the past – are going to work in your favor.
It makes sense to use caution when taking on any loan, but if you have bad credit, things aren’t good. Don’t make it worse.
Be careful who do you do business with on a bad credit loan. If the lender doesn’t require a credit check, doesn’t check your income; guarantees you’ll be approved; can’t be found for customer reviews or a Better Business Bureau ranking, it might be time to look elsewhere. Those are red-flag warnings that you might get scammed.
There are some outlets for people looking for bad credit loans, but it definitely will take some shopping around to find interest rates and repayment terms you can afford.
If you don’t have time to improve your score, find a loan from the sources listed below.
A credit union – especially one affiliated with your employer or one that is community-based – may be willing to look beyond a poor credit history and make a judgment about whether it will loan you money based on your character and your promise to repay. Think of credit unions the way you would a small community bank from years ago.
The most promising aspect of a credit union loan is the interest rate ceiling of 18%, which applies to anyone, regardless of their credit score. A similar loan from a bank could run you as much as 36% interest.
That can make a huge difference in the payout you make on a bad credit loan. Here is the total repayment:
Almost every consumer could qualify for some credit union. By joining, you could position yourself for much more favorable loan terms, regardless of your credit score.
This is dangerous from a relationship standpoint, but makes a lot of sense from a financial and loan-anxiety standpoint because it should be easier to get approval and a break on terms.
Family and friends aren’t likely to put you through a grueling qualifying process and probably would cut you some slack on the interest rate charged compared to what you would get from lending institutions that make bad credit loans.
However, if you’re thinking about borrowing from family members or friends make sure to factor in what happens if you default. Not repaying a loan to a relative or close associate can poison relationships in ways that go far beyond a bad credit report.
Treat any loan from someone you know just as if it were an important business transaction between you and a stranger. That means it should be formalized with clear documentation and legally recorded. To avoid future problems, create a written contract that includes the loan terms and interest rate, and what will happen if you cannot repay the debt.
If borrowing from a friend or relative is not possible, you can still approach someone you know with good credit about co-signing on for a bad credit loan.
With a qualified co-signer, the lender will set the loan terms based on the credit score of the person with good credit, who will then be equally responsible for repayment. All payment information will be recorded on both your credit report and your co-signer’s, so if you default on the loan, or you’re late with payments, you both suffer. However, if you make timely payments, your own score will improve, making it easier to obtain future loans without a co-signer.
If you have equity in your home, you can apply for a home equity loan or home equity line of credit (HELOC). Your home is used as collateral, and home equity loans can be obtained regardless of your credit score. The interest rate is usually low, because the loan is secured by the home. Also, the interest you pay on a home equity loan is usually tax-deductible.
It’s an online platform that allows you to get a bad credit loan directly from another individual or group of individuals rather than from an institution. Potential borrowers post a loan listing on various peer-to-peer websites, indicating the amount needed and what it’s for. Investors review the loan listings and choose borrowers they wish to fund.
Your credit score is still a factor, but since an individual investor has much greater leeway in how factors are weighted, these loans are often more readily available for people with bad credit. Lending standards are significantly more lenient and interest rates are usually lower than those offered by traditional lenders. In addition, peer-to-peer websites help evaluate risk for the lender, while verifying the lender’s credentials for the borrower.
Online personal loan applications are simple and easy to fill out. Credit scores are only a part of the decision-making process so this could be an appealing option if you have bad credit or no credit. In fact, some personal loan lenders have their own credit-score model and don’t use FICO scores. Other factors considered include whether you have a college degree, the school your degree came from and your employment history.
If your credit score does not impress banks or credit unions, the best chance to get money you need is through a secured loan.
A secured loan is one in which you borrow against an asset you own, such as a home, car, boat, property, savings or even stocks.
The lender will hold the asset as collateral against you defaulting on the loan. better terms and access to larger amounts of money than unsecured loans.
An unsecured loan has nothing more than a promise that you will repay behind it and could be very difficult to get from most banks. Banks are willing to make unsecured loans to their best customers – people who have the income and credit history to prove they will repay the loan – but are very cautious about lending money otherwise.
An unsecured loan is no risk for the borrower, but high risk for the bank so you can expect considerably higher interest rate charges and little flexibility on qualifying or terms of the loans.
Some banks will make secured loans based on the amount you have in a savings account or the value of any stocks you own. The value of getting a secured loan against savings or stocks is that you will not need to liquidate the asset so when you have paid off the loan, you still own the savings or stocks.
However, if you plan to use savings or stocks as collateral, most financial advisors suggest you liquidate them and use the money to pay whatever debt you are trying to settle rather than take out a loan.
The good news for everyone involved is that paying off the loan, whether it’s secured or unsecured, will improve your credit score.

Whether you want to consolidate your credit card debts, pay off a big expense over time, or simply need to borrow money quickly, it can make sense to take out a personal loan – and it's relatively easy to do.