You can borrow $21,000 with bad credit from Upstart, FreedomPlus and Peerform, among other lenders. The best places to borrow $21,000 with bad credit will require credit scores toward the upper end of the bad credit range. You will also need a relatively high income and little existing debt to get approved for a loan this large with a bad credit score. But people who cannot qualify can consider other options like secured personal loans and borrowing from friends and family.
The easiest banks to get a personal loan from are USAA and Wells Fargo. USAA does not disclose a minimum credit score requirement, but their website indicates that they consider people with scores below the fair credit range (below 640). So even people with bad credit may be able to qualify.… read full answer
Wells Fargo normally requires a credit score of 660 for their unsecured personal loans. However, they also offer secured personal loans that are available even with lower scores. Wells Fargo’s secured loans require collateral in the form of money in a Wells Fargo savings account or CD.
Most banks that offer personal loans require a credit score of at least 660. Some require even higher scores, like Citizens Bank (680) and Barclays (700).
Easiest Banks to Get a Personal Loan From:
USAA: Will lend to people with less than fair credit (scores below 640)
Wells Fargo: 660 minimum credit score for unsecured; no minimum for secured
American Express: 660 minimum credit score
Discover: 660 minimum credit score
TD Bank: 660 minimum credit score for existing customers (750 for non-TD customers)
These credit score requirements are either official info from the lender or the consensus of third-party sources.
The average person’s credit score is over 660, which puts them in a decent position to qualify for a personal loan from most banks. But if your score is lower, you can apply with USAA or get a secured loan from Wells Fargo.
You might also want to look outside of banks. Some credit unions and online lenders offer better chances of being approved with bad credit. For example, Avant’s minimum score requirement is reportedly 600 and LendingPoint’s is 585.
There are several ways to go about borrowing money when you have bad credit, such as joining a credit union, borrowing from friends and family, applying with a co-signer, or using one of the few unsecured credit cards designed for people with poor credit. Taking out an unsecured personal loan is unlikely to be an option, however, as most banks require a credit score of at least 585 for approval (660+ for a loan with no origination fee).… read full answer
Often, when you have bad credit, the best option is to hold off on borrowing more money until you improve your credit standing. By waiting, you could get better terms and save money, as well as avoid taking on too much and making the situation worse. But sometimes borrowing money is unavoidable.
Before you borrow, it’s important to familiarize yourself with the risks and downsides of each option, along with the advantages. There are several ways you might be able to borrow money with bad credit, and we’ve divided the options into the categories “best” and “other” to help guide you toward safer choices.
Ways to Borrow with Bad Credit:
Best Ways to Borrow with Bad Credit
Other Ways to Borrow with Bad Credit
Join a credit union
Put down collateral for a secured loan
Borrow from an online personal loan provider
Pawn valuables to raise cash
Get a peer-to-peer loan
Do a credit card cash advance
Borrow from friends & family
Borrow from a retirement account
Find a co-signer
Get a refund-anticipation loan
Compare credit cards for bad credit
Get a payday loan
Best Ways to Borrow with Bad Credit:
1. Join a credit union. Unlike banks, credit unions are not for profit. They base membership on things like occupation or where you live. Because they take a more personal approach, credit unions may lend to people with credit scores 30 - 40 points lower than average, according to Experian. They also may factor things like income and credit utilization into their calculations less than banks will. You’ll likely get the lender’s maximum APR, but federal credit unions cap their rates at 18%. And you can shop around for the best deal.
2. Borrow from an online personal loan provider. The few online personal loan providers that lend to people with bad credit have minimum credit score requirements that are reportedly near the top of the bad credit range. Some examples are LendingPoint (585 minimum credit score), Avant (600) and FreedomPlus (620). You should expect to pay close to the lender’s maximum APR (often above 30%), along with an origination fee of 1% to 8% of the loan amount.
3. Get a peer-to-peer loan. Peer-to-peer loan websites allow you to request a loan for a certain amount and connect with individuals who are looking to lend money. Approval is based on a combination of your credit history, your income and other factors included on the site’s application. For the individuals lending money, this type of loan can provide a higher yield than putting the money in a bank account. For you, it could potentially mean an interest rate as low as 7% or as high as 36%, depending on the site (the average rate is 15%). You may also be charged extra fees.
4. Borrow from a friend or family member. Since you have a personal relationship with these people, they may be more willing to give you a loan. However, you risk ruining your connection if you are unable to pay them back. Make sure to put the agreement and its terms (interest rate, time frame, etc.) in writing to hold yourself accountable for repayment.
5. Find a co-signer. If you can find someone with good credit who is willing to co-sign your loan, your interest rates will be based on their credit history. However, only do this if you are sure you will make your payments on time. If you are late or you default, the other person’s credit rating will go down along with yours.
6. Compare credit cards for bad credit. Even if you have bad credit, it’s still possible for you to get a credit card. The easiest cards to get in your situation will be secured cards, which require a security deposit that serves as your credit line. But that means you’re not really borrowing money, since you’re spending against your own deposit. There are unsecured credit cards for bad credit, but they tend to come with high fees and low limits. For personalized credit card recommendations, join WalletHub for free.
Other Ways to Borrow Money with Bad Credit
Take out a secured loan. A secured loan uses something you own as collateral. In other words, if you don’t pay back the loan, your possession that you put up as security can be seized. Two of the most common examples of this are home equity loans and automobile title loans.
With home equity loans, you can borrow money from the value of your house minus what you still owe on your mortgage. The one benefit to this is low interest rates, but you must be prepared to make your payments. If you don’t pay the loan back, you could lose your house. In addition, you’ll need a credit score of at least 620 to qualify.
Automobile title loans let you borrow money using your car as collateral. The lender can repossess the car if you can’t pay the loan back. These loans typically last a month or less, though you may be able to extend them for additional fees. Auto title loans also have extremely high APRs. You should avoid them at all costs.
Pawn valuables. If you need a small loan and have a valuable possession, you can bring it to a pawn shop and get part of the value as a loan. You will have a certain amount of time to pay the money back with interest and reclaim your item, or the pawn shop can sell it.
This is not an ideal option, so you should only do this with items that you’re willing to risk losing.
Borrow from a retirement account. You can get a loan from your 401k before you’re retired. You’ll owe interest on this loan, but the interest will go back into your retirement account to help you make up for the money you would have earned by having it invested. You’ll need to pay the loan back in five years, or by the next tax day if you lose your job before then.
Get a refund-anticipation loan. This type of loan allows you to borrow against an expected tax refund. But these are vehicles for fraud and you should stay away from them, according to Lee G. Knight, a professor of accountancy at Wake Forest University.
Get a payday loan. You can borrow against an expected paycheck, but it will be extremely expensive. We do not recommend this highly predatory borrowing method.
Use a credit card for a cash advance. If you have a credit card, you can use it to get money from an ATM, write a check, or transfer money to a bank account. But we only recommend doing a credit card cash advance in an emergency situation because an expensive fee and interest rate will apply. Plus, there’s no grace period before interest starts accruing. Too many cash advances also may raise a red flag with your credit card issuer and could hinder your ability to get credit line increases in the future.
At the end of the day, waiting to build up good credit is the best option. But if you need a loan now, you should take time to consider all the available options before picking the one that works best for you.
In any case, it’s important to stay on top of your credit score and always work to improve it. Joining WalletHub for free lets you track your daily-updated credit report and score, and gives you personalized credit analysis to help you improve.
Yes, you can get a personal loan with a credit score of 550. You could consider 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 which usually have a lower requirement over credit score.
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 580. The personal loans with the lowest minimum credit score requirements are from LendingPoint (580+ score required) and Avant (600+).
So pursuing one of these alternative methods can help increase your chances of getting the funding you need.
How 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.
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