There are several ways to get personal loans with a credit score under 550. They include getting a secured personal loan, applying for an unsecured personal loan with a co-signer, borrowing from family and friends, and checking with local credit unions.
It’s very difficult to get an unsecured personal loan with a credit score under 550 on your own, without the help of a co-signer whose credit score is higher. Even the loans with the most lenient approval standards require a credit score of 585. The personal loans with the lowest minimum credit score requirements are from LendingPoint (585+ score required) and Avant (600+).
So pursuing one of these alternative methods can help increase your chances of getting the funding you need.
Ways to get personal loans for a credit score under 550:
Get a secured personal loan. A secured personal loan requires collateral. So you’ll have to put something of value on the line – money in an account or certificate of deposit, for example – that the lender can keep if you default. But your odds of approval will be high, since there’s little risk to the lender.
Apply for an unsecured personal loan with a co-signer. Applying for an unsecured personal loan with a co-signer lets you use someone else’s high credit score to boost your approval chances. The co-signer promises to pay the loan back if you can’t. Only some personal loan providers offer a co-signer option. Some examples are Citizens Bank, PNC and SoFi.
Borrow from family/friends. These people will likely be more sympathetic to your situation and will not care as much what your credit score is. They also won’t be able to do a hard pull of your credit and damage your score further. Depending on the person from whom you borrow, you might get much better terms than you would from a traditional lender.
See if local credit unions will consider you. According to the credit bureau Experian, some credit unions will offer unsecured personal loans even to people with bad credit. That’s due to credit unions having a more personal connection with their customers and being not-for-profit organizations.
One non-loan way to finance purchases with bad credit is through a credit card. However, credit cards for bad credit are not ideal. Secured credit cards require a security deposit that becomes your credit limit, so that essentially means you’re not borrowing (or at least you’re borrowing from yourself). And unsecured cards for bad credit have high rates and fees.
You can see your odds of getting approved for a personal loan without hurting your credit score by using WalletHub’s free pre-qualification tool. But if your expense isn’t especially urgent, it may be worth waiting a few months to improve your credit score.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines
. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.