Can I Get a Personal Loan With a 500 Credit Score?

You can get a personal loan with a 500 credit score. Keep in mind, though, your options are limited, and you'll likely pay a higher interest rate and have a lower limit for your personal loan.

• You might see a high annual percent rate between 20% to 36% or more.

• You can prequalify for a loan, but this requires a soft credit check.

• To lower your interest rate, consider a secured loan or a co-signer.

• Credit unions often have lower rates. If you're a member of a credit union, inquire about their personal loans.

• Create a set amount that you're willing to pay for the APR.

• Avoid payday loans. These typically have high interest rates and terms unfavorable to the borrower.

Key Takeaways

• You can qualify with a 500 credit score, but your choices are limited and you'll likely face annual percentage rates between 20% and 36% along with smaller loan amounts. Traditional banks usually won't approve you, so focus on lenders like Upstart, Upgrade and OneMain Financial that work with lower scores.

• Lower your rate with smart moves by adding a co-signer who has good credit, choosing a secured loan backed by collateral or checking with a credit union if you're a member. Prequalifying with two or three lenders using a soft credit check lets you compare offers without hurting your score.

• Skip payday loans and prep before you apply. Their annual percentage rates can hit 400% and trap you in debt. Gather your ID, recent paystubs and tax returns, set a maximum annual percentage rate you'll accept, compare fees and terms carefully then pick the shortest affordable repayment term.

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What Loan Companies Work With a 500 Credit Score?

Your options for personal loans with bad credit are extremely limited when you have a 500 credit score. Some lenders will take into account other factors when considering your application, like your income or education level.

Even so, the lender has minimum credit requirements applicants must meet. For example, you can't have any currently delinquent accounts or bankruptcies that occurred within the last 12 months.

Curious about which companies work with a 500 credit score? Here's a comparison table that shows the lender name, APR range, loan amount and other information to help you determine which one is the best fit for your needs.

Will Traditional Banks Approve Personal Loans With a 500 Credit Score?

Unfortunately, it's unlikely that a traditional bank, such as Chase, Wells Fargo or your hometown banking institution, will be willing to approve a personal loan with a 500 credit score.

Borrowers with low credit scores are considered risky and more likely to default on their loans.

Can I Get a Personal Loan With a 500 Credit Score and a Co-Signer?

If your credit score is poor, having a co-signer might help you get approved depending on the lender. However, the co-signer must have good credit and understand that they will be responsible for making the payments on the loan if you cannot.

How To Apply for a Personal Loan With a 500 Credit Score

You have to use a strategy to apply for a personal loan with a 500 credit score. You’re unlikely to be approved by traditional banks, so you’re likely targeting lenders that have a lower bar for a credit score. Use these steps to guide your process.

1. Gather your documents. You'll need a copy of your government-issued ID, two recent paystubs and your 2025 tax returns. This should take 30 minutes depending on the accessibility of your documents.

2. Focus on lenders that work with your credit score. Look for lenders that publicize that they work with borrowers who have a credit score lower than 600. Some popular options include Upstart Financial, Upgrade and One Main Financial. This shouldn't take too much time.

3. Prequalify with two to three lenders using a soft credit check. You can see your potential APR without hurting your credit. This should take two to five minutes.

4. Compare the lenders and your options. Make sure you check APRs, loan terms and origination fees. Don't just go with the first lender that approves your application.

5. Submit your application. You'll link your bank account and best offer in a portal so that your income can be pulled. This should take about 15 minutes.

6. Review and sign your agreement. Make sure to review the terms carefully. Look at the funding category specifically. This will tell you how quickly you'll get your funds.

7. Choose your repayment term. Make certain you plan for your first payment. You should choose the shortest affordable term and set up autopay if that helps you stay on track.

Eligibility and Readiness Checklist

How do you know if you're eligible or ready for a personal loan? Look over this checklist to determine your readiness level.

1. Do you have a steady income?

2. Do you have a government-issued ID?

3. Do you have an active bank account?

4. Have you missed any current payments?

5. Have you filed bankruptcy recently?

Other Options for Personal Loans

If you don't qualify for a traditional personal loan, these options may be easier to access — but they differ in cost, risk and flexibility.

1. Lower cost option — Secured loan. The cost level is low, and the best use case is when you have collateral in the form of a home, car or other valuables.

2. Easier approval — Arrangement with family or a friend. The cost level is zero, or very low, at least. This is ideal for a one-off for an emergency. Make sure you can pay the family member or friend back quickly.

3. Quick approval if you're a member — Use a credit union if you’re already a member. Keep in mind you'll pay a moderate cost, but this is best for smaller expenses.

4. Peer-to-peer loan. This is best for those who want to consolidate their loans into one payment. A debt counseling agency will distribute the amount to the creditors. The cost level can be moderate to high.

What About Quick Loans or Bad Credit Emergency Loans?

While these might be considered loans that are easy to get, payday loans, for example, could have an APR of up to 400%, which is over 10 times higher than a personal loan APR of 36%.

Additionally, these types of loans are usually for low amounts, such as a few hundred dollars, and must be paid back quickly. You could easily sink yourself in a never-ending cycle of debt with these types of loans.

Other Options for Personal Loans

Other options for personal loans include:

• Secured loans

• Making an arrangement with a family member or friend

• Applying with a credit union or peer-to-peer lending options

If you have a friend or family member who is willing to lend you the money you need, it's smart to have a written agreement that you both sign that details the date and amount of the loan, a payment schedule and any interest or fees.

Final Takeaway

Getting a personal loan with a 500 credit score is possible. You can prequalify to find out which lender not only approves you but also offers the best APR and terms. It'll likely cost more in terms of interest rate and fees. If you aren't uncomfortable with a personal loan, other safer options exist like a secured loan or credit cards.

Cynthia Measom contributed to the reporting for this article.

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