How to Get Approved for a Personal Loan with a Bad Credit Score

How to Get Approved for a Personal Loan with a Bad Credit Score

Borrowers with poor credit might need to go above and beyond to be approved for a personal loan or to receive a better rate.

You can still obtain a personal loan to pay for an emergency or to consolidate debt despite having a low credit score.

Borrowers with bad credit score (a score of 629 or lower) might have to put in more effort to qualify, but doing so can speed up the approval process and possibly result in a lower interest rate.

Five steps to get a personal loan despite poor credit

  • Go through your credit report.

In most cases, lenders have minimum credit score criteria, and you risk being turned down if you don’t meet them. Your credit score is accessible from many financial institutions, and gives a free, comprehensive analysis of your credit history. Your report may contain inaccuracies that you can correct to improve your credit.

  • Lender comparisons

It is good to compare several possibilities because all lenders have different borrower requirements or rates. The finest lenders for people with bad credit provide rates you can afford in addition to other useful options like quick funding, credit-building programmes, or mobile apps to track loan payments.

  • Pre-qualify.

Pre-qualification does not impact your credit score but informs you of the expected rate, loan size, and repayment period. It’s especially helpful if you want to compare offers while trying to figure out your loan eligibility. This function is provided by many banks and lenders online.

  • To your application, add.

With co-signed and secured loans, you can qualify for or receive a personal loan at a lower rate. An additional person’s credit and income information are added to the application for a co-signed personal loan. That person pledges to repay the debt if the borrower is unable to. Secured loans enable you to put up collateral that a lender may take if the loan is not repaid (typically a car or savings account).

  • Apply.

The documentation you require to apply for a loan should be gathered in advance to facilitate the procedure. W-2 forms, salary stubs, financial records, and your Social Security number are a few examples. Some lenders will respond to your application the same day or the following day.


How a personal loan application is impacted by poor credit

Lenders evaluate your loan application and make decisions regarding your loan amount and interest rate in addition to whether or not to approve it.

When you have a low credit score, a lender may be more hesitant to lend you money because they suspect you may have previously had trouble paying off credit cards or other debt. Due to this, the lender can reject your application or grant you a small loan with a high APR. Therefore, take the time to improve your credit before applying if you do not urgently require the loan.

Where can people with bad credit acquire loans?

  1. Credit unions – A credit union is one of the finest options if you have low credit because you must be a member to borrow money from it. When making a choice, credit unions consider a loan applicant’s membership history, thus, having a positive relationship with the credit union may be helpful. Because APRs are capped at 18% at federally regulated credit unions, you could also acquire a lower rate there. Other lenders’ rates might be as high as 36%.
  2. Online lenders – Lend Today is one online lender that provides loans to borrowers with bad credit. Consumer-friendly features from online lenders could include quick funding and guidance on improving your credit.

To discover the best rate, it is best to compare online loans with offers from other lenders.


Some lenders are for those with a  bad credit score on an origination fee, which ranges from 1% to 10% of the loan amount. You might receive less money than anticipated because most lenders deduct the fee from the loan before putting the money into your account. Ensure the remaining loan balance is sufficient to cover your costs if the fee is included.

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Avoid loans with no credit checks.

Although borrowing from a lender who won’t check your credit score might seem appealing, these lenders frequently offer predatory, high-interest instalments or payday loans.

A lender is not accurately evaluating your capacity to repay if they don’t look at data like your credit score. By charging exorbitant interest rates that make payments unaffordable and force borrowers to borrow again when the payment is due, certain lenders who provide no credit check loans trap customers in a cycle of debt.

If you need to be approved by a lender who checks your credit, think about less expensive loan options.


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