Can you get a personal loan with bad credit?

Reviewed by Turan Zeynal, Managing Partner, Outset Funding Partners · Last reviewed July 23, 2026

TL;DR

Yes — personal loans are available at FICO scores as low as 550, and some lenders will fund at 500. What changes at bad-credit tiers isn't approval, it's price: APRs run 25%–36% (versus 8%–15% for prime borrowers), loan amounts cap lower ($1,000–$15,000 is typical), and origination fees can eat 5%–10% off the top. The right move is usually to (1) check your rate with soft pulls only — never blast hard-pull applications, (2) borrow the smallest amount that solves the problem, and (3) pay on time for 6–12 months to graduate into a cheaper refinance.

Quick facts

Minimum FICO (marketplace lenders): 560 – 580
Minimum FICO (subprime specialists): 500 – 550
Typical APR range (bad credit): 25% – 36%
Loan amount (bad credit): $1,000 – $15,000
Term: 24 – 60 months
Origination fee: 0% – 10%
Rate check impact: Soft pull — no FICO impact
Funding speed: 1 – 3 business days

The 60-second answer

Bad credit isn't a wall — it's a filter. Below roughly 580 FICO, prime lenders (SoFi, LightStream, Marcus) won't approve you, but a second tier of lenders (Upstart, OppLoans, Avant, Universal Credit, some credit unions) specialize in exactly this range. They fund at higher rates because default risk is higher, but they do fund.

The mistake most bad-credit borrowers make is applying to five lenders in a week with hard pulls, watching their score drop another 15 points, and getting declined by all five. The right approach is to check your rate through a soft-pull marketplace first, take one offer, and let the on-time payment history unlock a 6–12 month refinance at a lower rate.

How it works, step by step

Pull your credit reports for free
AnnualCreditReport.com gives you all three bureaus free every week. Dispute anything inaccurate — one incorrect collection removed can be a 40-point swing.
Check your rate with a soft pull only
A soft-pull rate check has zero FICO impact. Compare 2–3 marketplaces before you commit; hard-pull applications should only happen after you've picked the offer you want.
Borrow the smallest amount that solves the problem
At 30% APR, a $10,000 loan costs $3,000+ in interest over 3 years. If $5,000 solves the emergency, borrow $5,000.
Set up autopay from day one
Autopay knocks 0.25%–0.50% off APR at most lenders, and — more importantly — it guarantees you don't miss a payment. One 30-day late in bad-credit tier can drop your score another 60–100 points.
Refinance after 6–12 months of on-time history
A clean payment record moves your file into fair-credit tier quickly. Recheck rates every 6 months; refinancing from 30% to 18% on a $10k balance saves $1,000+.

Pros and cons

Pros

✓Real approval possible at 550–580 FICO (and 500+ with specialists)
✓Fixed monthly payment gives a predictable path out of debt, unlike credit cards
✓Soft-pull rate check means shopping doesn't damage credit further
✓Consolidating 25%+ credit cards into an 18%–25% loan is real savings
✓Building 6–12 months of on-time history unlocks a much cheaper refinance

Cons

×APRs of 25%–36% are expensive — a $10k, 3-year loan costs $3k–$5k in interest
×Origination fees of 5%–10% come off the top of your loan proceeds
×Loan amounts are typically capped at $5k–$15k below 580 FICO
×Some subprime lenders (OppLoans, some tribal lenders) charge triple-digit APRs — avoid
×Missing a payment hits an already-thin credit file hard

Bad-credit loan options compared

Option	When to use	Watch out for
Marketplace personal loan (Upstart, Avant)	550+ FICO, need $2k–$15k, want fixed payments	Origination fees 5%–10%; verify final APR before signing
Credit union personal loan	You've been a member for 6+ months, need $500–$15k	Membership required first; slower approval than fintech
Secured personal loan	You have $1k+ in savings or a vehicle title	You lose the collateral if you default — real risk
Payday / title loan	Almost never — APRs of 300%–500%	Predatory. Try any alternative first, including asking family
0% APR balance transfer card	You can pay off in the 12–21 mo promo window	Bad-credit borrowers rarely qualify for the 0% offers

Frequently asked questions

What's the lowest credit score for a personal loan?

Some lenders (OppLoans, NetCredit, certain credit unions) approve at 500 FICO. Marketplace lenders like Upstart and Avant typically start at 560–580. Below 500, options narrow to secured loans, credit-builder loans, or family/employer loans.

How much can I borrow with bad credit?

Typically $1,000–$15,000 below 620 FICO. Larger amounts ($15k–$50k) usually require 640+ or a co-signer. First-time bad-credit borrowers often get approved for $3k–$7k on their first loan, with limits raising after 6–12 months of on-time payments.

Will checking my rate hurt my credit?

No — a soft-pull rate check has zero impact on your FICO. Only formal loan applications trigger hard inquiries, and each hard pull is worth about −5 points. Never apply to multiple lenders with hard pulls in the same week; use soft-pull marketplaces to shop.

Should I use a co-signer to get a better rate?

Yes if you trust the co-signer relationship and they have prime credit (720+). A co-signer can drop your APR by 10–15 points. The catch: they're 100% legally liable, and your late payments hit their credit too. Never co-sign, or ask someone to co-sign, casually.

Are 'guaranteed approval' personal loans real?

No. Any lender advertising 'guaranteed approval' with no credit check is either a scam or a predatory lender charging 200%+ APR. Real lenders always verify income and pull credit (soft or hard). If a website asks for an upfront 'processing fee' before funding, close the tab.