Getting a personal loan with bad credit can feel like an uphill battle, but it’s not impossible. Whether you need to consolidate debt, cover an emergency, or fund a major expense, there are smart strategies to improve your chances of getting approved—even with a low credit score.
Here’s how to do it.
What Is Considered “Bad Credit”?
Generally, a credit score below 580 is considered poor, though some lenders may still approve loans for scores in the 500–600 range—usually with higher interest rates.
Step-by-Step: How to Get Approved with Bad Credit
1. Know Your Credit Score and Report
Start by checking your credit score and reviewing your report for errors.
- Get a free copy at AnnualCreditReport.com
- Look for inaccurate late payments or accounts you don’t recognize
- Dispute errors to potentially boost your score quickly
2. Apply with a Creditworthy Co-Signer
A co-signer with good credit and stable income can improve your approval chances and lower your interest rate.
Make sure your co-signer understands they’re equally responsible for repayment.
3. Offer Collateral (Secured Loan)
Some lenders offer secured personal loans, which require an asset (like a car or savings account) as collateral. These often come with better terms for borrowers with poor credit.
4. Borrow Only What You Need
Requesting a lower amount (e.g., $1,000–$5,000) can increase your chances of approval, especially if your credit is weak.
Tip: Use a loan calculator to know exactly what you can afford to repay monthly.
5. Show Proof of Income and Stability
Lenders are more likely to approve your application if you can demonstrate:
- A steady job or consistent income
- Low debt-to-income ratio (DTI)
- Proof of address and ID
Bring pay stubs, bank statements, and W-2s when applying.
6. Compare Lenders—Don’t Settle
Not all lenders treat bad credit the same. Look into:
- Credit unions
- Online lenders (like Upstart, Avant, OneMain Financial)
- Peer-to-peer platforms
Use prequalification tools to compare offers without hurting your score (soft credit pulls).
7. Avoid Predatory Lenders
Stay away from payday loans or title loans—they come with extremely high interest rates and risky terms.
Final Thoughts
Bad credit doesn’t mean no credit options. With a thoughtful approach and the right documents, you can still get approved for a personal loan in 2025. Just be smart—compare offers, read the fine print, and borrow responsibly.
Rebuild your credit as you repay—and turn this into a financial comeback story.