Having bad credit makes borrowing harder and more expensive — but it does not make it impossible. There are legitimate options for getting a personal loan with a credit score below 580, and strategies to improve your odds and reduce your interest rate even before you apply.
This guide covers where to find personal loans for bad credit in 2026, what to expect, and how to avoid predatory lenders.
What Counts as “Bad Credit”?
Credit scores range from 300 to 850. Most lenders use FICO scores, which fall into these general categories:
- Exceptional: 800–850
- Very Good: 740–799
- Good: 670–739
- Fair: 580–669
- Poor: 300–579
If your score is below 580, most traditional banks and credit unions will decline your application or offer very high interest rates. Online lenders and credit unions that specialize in bad-credit borrowers are typically your best options.
Best Lenders for Bad Credit Personal Loans
Upgrade
Minimum credit score: 580 | APR range: 9.99%–35.99% | Loan amounts: $1,000–$50,000
Upgrade is one of the most accessible lenders for fair and bad credit borrowers. They use your credit score alongside income, employment, and banking history to make decisions. Loan terms are 2–7 years.
Upstart
Minimum credit score: 300 (some reports suggest no minimum) | APR range: 6.70%–35.99% | Loan amounts: $1,000–$50,000
Upstart uses AI and alternative data — including education and employment history — to evaluate creditworthiness. This can help borrowers with thin credit histories or lower scores who would be rejected elsewhere.
Avant
Minimum credit score: 580 | APR range: 9.95%–35.99% | Loan amounts: $2,000–$35,000
Avant focuses on near-prime and subprime borrowers. Same-day or next-day funding is available for approved applicants. Origination fees apply.
LendingPoint
Minimum credit score: 600 | APR range: 7.99%–35.99% | Loan amounts: $1,000–$36,500
LendingPoint uses a proprietary model that weights recent credit behavior more heavily than older negative marks, which can benefit borrowers who have recently improved their credit.
OneMain Financial
Minimum credit score: No stated minimum | APR range: 18.00%–35.99% | Loan amounts: $1,500–$20,000
OneMain Financial operates branches in addition to online applications and accepts borrowers with very low credit scores. Secured loans (using a vehicle as collateral) may offer better terms.
Credit Unions: Often the Best Option
Many credit unions offer personal loans to members with poor credit at lower rates than online lenders. Because credit unions are member-owned and nonprofit, they are often more willing to work with borrowers in financial difficulty.
Steps to access credit union loans:
- Join a credit union (check eligibility by employer, location, or community affiliation)
- Open a savings account and establish a relationship
- Apply for a personal loan — credit unions often look at your full financial picture, not just your score
Some credit unions offer Payday Alternative Loans (PALs) — small loans of $200–$2,000 at interest rates capped at 28% APR — as a safer alternative to payday loans.
Secured Personal Loans
A secured personal loan requires you to put up collateral — usually a savings account, CD, or vehicle — in exchange for a lower interest rate and better approval odds. If you default, the lender seizes the collateral.
This is a viable option if you have savings or a paid-off vehicle and need better loan terms. The downside is the risk of losing the collateral if you cannot repay.
Co-Signer Loans
If someone with good credit — a family member or trusted friend — agrees to co-sign your loan, you can qualify for better rates. The co-signer is equally responsible for repayment. If you miss payments, it damages both your credit and theirs. Use this option carefully and only if you are confident in your ability to repay.
What to Expect: Interest Rates for Bad Credit Borrowers
Be realistic about rates. Borrowers with credit scores below 580 typically face APRs in the 25–36% range on personal loans. This is expensive. A $5,000 loan at 35% APR over 3 years costs approximately $2,500 in interest alone.
Compare the total cost of the loan (principal + all interest + fees) before accepting any offer, not just the monthly payment.
How to Improve Your Approval Odds Before Applying
Check and Dispute Credit Report Errors
Pull your free credit reports from AnnualCreditReport.com and look for errors — incorrect balances, accounts you do not recognize, or payments marked late that were actually on time. Disputing errors can raise your score quickly.
Pay Down Existing Balances
Credit utilization (how much of your available credit you are using) is a major factor in your score. Paying down credit card balances below 30% utilization can improve your score meaningfully within 30–60 days.
Add a Positive Account
A credit-builder loan from a credit union or bank is a small loan held in a savings account while you make payments. Monthly on-time payments are reported to the credit bureaus, building your history. After paying off the loan, you receive the funds.
Become an Authorized User
If a family member with good credit adds you as an authorized user on their credit card, their positive payment history may appear on your credit report, boosting your score.
Lenders to Avoid
Payday Lenders
Payday loans carry APRs of 300–600% and are structured to trap borrowers in a cycle of debt. Avoid them entirely. Credit union PALs or personal loan lenders that serve bad-credit borrowers are always a better option.
Title Loan Companies
Title loans use your vehicle as collateral and charge extremely high rates. Borrowers frequently lose their cars. Only consider these as an absolute last resort.
Unverified Online Lenders
Verify any online lender through your state’s financial regulator website. Avoid lenders that guarantee approval before reviewing your application, ask for upfront fees before disbursement, or do not have a verifiable physical address.
How to Apply for a Bad-Credit Personal Loan
- Check your credit score through a free service like Credit Karma or your credit card issuer
- Pre-qualify with multiple lenders using soft credit pulls (no impact on your score)
- Compare APR, origination fees, and total cost — not just monthly payments
- Choose the best offer and submit a full application (this involves a hard pull)
- Review the loan agreement carefully before signing
Bottom Line
Getting a personal loan with bad credit is possible, but it requires doing your research to avoid predatory lenders and expensive terms. Online lenders like Upstart and Upgrade and credit unions are your best starting points. If possible, take a few months to improve your credit score before applying — even a 20–30 point increase can meaningfully improve your rate. Always compare total loan cost, not just monthly payment, and never borrow more than you can comfortably repay.