What "bad credit" means to a lender
FICO, the score most lenders pull, labels 580–669 fair and anything below 580 poor. Lenders do not use those labels; they use cut-offs. The practical dividing lines in 2026 are about 660 (where banks and prime online lenders start), 620–640 (where most fintech lenders will still approve, at a price) and 580 (below which unsecured approvals become unusual).
Where the cut-offs fall
FICO 8 bands. Most of the options on this page are designed for the left third.
Two things matter more than the number. Recency: a 610 with two years of clean payments after an old bankruptcy is a very different applicant from a 610 with a 60-day late last month. Capacity: lenders that approve lower scores (Upstart, Upgrade, Avant, OneMain) lean heavily on verified income and debt-to-income ratio, and some weigh education, employment and bank-account cash flow. If your income is stable, say so and be ready to prove it.
What you can realistically get at each score
| Score | Likely approvals | Typical APR | Typical amount | Cheapest realistic route |
|---|---|---|---|---|
| 620–659 | Most online lenders; many credit unions; some banks with a relationship | 17% – 30% | $2,000 – $25,000 | Credit union (≤ 18%) or fee-free online lender |
| 580–619 | Upgrade, Prosper, Upstart, Avant, OneMain, Best Egg; credit unions case by case | 25% – 35.99% | $1,000 – $15,000 | Credit union secured loan or PAL; joint application |
| 550–579 | Avant, Upstart, OneMain (often secured); credit unions with collateral | 29% – 35.99% | $1,000 – $10,000 | Share-secured or vehicle-secured loan; co-signer |
| Below 550 | Unsecured approvals uncommon; secured and co-signed only | Secured: 10% – 28% | $500 – $5,000 | Credit-builder or share-secured loan at a credit union |
Ranges reflect published lender rate sheets and marketplace offer data as of October 2026; individual offers vary with income, DTI, state and term. Origination fees of 1%–12% are included in the APRs shown but reduce the cash you receive.
Every legitimate option, ranked from cheapest to most expensive
- Credit-union personal loan (up to 18% APR)Federal credit unions are capped at 18% by law, and many lend from $500. They underwrite by hand, so a stable job and a direct-deposit relationship can outweigh a 600 score. Joining usually costs $5–$25 and may be open through an association or county. PenFed is national; most others are local, so search the NCUA locator.
- Secured personal loan (roughly 6%–28%)Collateral turns a decline into an approval and cuts the rate. A share-secured loan borrows against your own savings at a few points above what the savings earn; a vehicle-secured loan (OneMain, Best Egg, credit unions) uses a paid-off car. You keep driving the car, but a default means repossession.
- Payday alternative loan, PAL (max 28% APR)For small emergencies: PAL I is $200–$1,000 over one to six months after one month of membership; PAL II is up to $2,000 over up to twelve months with no waiting period. The application fee is capped at $20 and there are no rollovers. A $1,000 PAL at 28% over six months costs about $83 in interest. Details in our emergency loans guide.
- Joint or co-signed loan (priced on the stronger credit)Happen Bank, Upgrade, Prosper, PenFed and most credit unions accept a second applicant. The offer is priced largely on the better profile, which can mean 12%–16% instead of 30%+. Both parties are fully liable for the whole balance.
- Online lenders that look beyond the score (25%–35.99%)Upstart (no minimum; weighs education and employment), Avant (about 550+), Upgrade (about 580+), Prosper (about 560–600), OneMain (no published minimum, branch-based, secured option). Expect an origination fee of 1%–12% and APRs near the ceiling for scores under 600. Fast and legitimate, but compare with a credit union first.
- Credit-builder loan (not for cash today)The lender holds the loan amount in a locked account while you make 6–24 monthly payments, then releases it. Costs are small, approval is near-universal, and it builds the payment history that unlocks cheaper credit next year. Offered by many credit unions and some community banks.
- Nonprofit credit counseling and a debt management planNot a loan, but if the goal is paying off cards, an NFCC-member agency can often negotiate card APRs down to 6%–10% with no credit score requirement. Cards are closed for the plan's three to five years.
National lenders by minimum credit score
From our lender reviews, the lenders most relevant below 660, with the terms they published as of October 2026. All use a soft pull for pre-qualification.
| Lender | Min. score | APR range | Origination fee | Amounts | Note |
|---|---|---|---|---|---|
| Upstart | None (300+) | 6.20% – 35.99% | 0% – 12% | $1,000 – $75,000 | AI underwriting weighs education and job; 3- or 5-year terms only |
| Avant | ≈ 550 | 9.95% – 35.99% | Up to 9.99% | $2,000 – $35,000 | Next-day funding; most borrowers land 600–700 |
| Prosper | ≈ 560 – 600 | 8.99% – 35.99% | 1% – 9.99% | $2,000 – $50,000 | Joint applications accepted |
| Upgrade | ≈ 580 – 600 | 7.74% – 35.99% | 1.85% – 9.99% | $1,000 – $50,000 | Secured and joint options; direct payment to creditors |
| OneMain Financial | None published | 11.99% – 35.99% | 1% – 10% or $25 – $500 flat | $1,500 – $30,000 | 1,300+ branches; vehicle-secured loans for lower scores |
| Happen Bank | ≈ 600 | 6.53% – 35.99% | 0% – 8% | $1,000 – $60,000 | Formerly LendingClub; joint applications; consolidation discount |
| Best Egg | ≈ 640 | 6.99% – 35.99% | 0.99% – 9.99% | $2,000 – $50,000 | Secured loan backed by home fixtures or vehicle |
| PenFed Credit Union | Not published (≈ 700 typical) | 7.99% – 17.99% | None | $600 – $50,000 | Worth a pre-qualification for the 17.99% cap; joint applications |
What a bad-credit loan actually costs
The gap between a credit-union approval and an online lender's ceiling is not a few dollars. Here is $5,000 over 36 months at three APRs that bracket the fair- and poor-credit market:
At 36% you pay more than twice the interest of the 18% loan for the same money, and an origination fee of up to 12% would come off the top as well. That is why the ranking above puts credit unions and secured loans first even though they take a day or two longer.
Rule of thumb: if the best offer you can get is above about 30% APR, the loan should solve a problem that costs more than 30% a year to leave unsolved: a 391% payday loan, a utility shut-off, a car you need for work. For a discretionary purchase it is better to wait and raise the score first.
What to avoid, and why the line is 36%
Thirty-six percent is the APR cap in the federal Military Lending Act and in roughly 20 states' small-loan laws, and it is the ceiling that nearly every national online lender sets for itself. Products priced above it are built around repeat borrowing rather than payoff.
Payday loans
$15 per $100 for two weeks is a 391% APR. The CFPB found most payday borrowers roll loans over repeatedly; five renewals of a $500 loan cost $375 in fees with no principal repaid.
Auto title loans
Typically 25% a month (300% APR) with your car as collateral. The CFPB has reported that about one in five title-loan borrowers loses the vehicle.
Advance-fee "lenders"
Anyone who guarantees approval or asks for a processing, insurance or first-payment fee before funding is running a scam. Real lenders deduct fees from proceeds. How to verify a lender →
Also treat with caution: high-cost installment loans from online lenders operating through out-of-state or tribal charters at 60%–200% APR; buy-here-pay-here auto financing; and credit-repair companies that charge up front to dispute accurate information, which the Credit Repair Organizations Act prohibits.
Six moves that can raise a score before you apply
If the need can wait 30–90 days, these are the levers with the fastest payoff. Each is free.
- Pull all three reports and dispute errorsFree weekly at AnnualCreditReport.com. Bureaus must investigate within 30 days. Paid collections and medical debt under $500 should already be excluded; if they are not, dispute them.
- Get card utilization under 30%, ideally under 10%Utilization has no memory: the score uses the balance on your latest statements. Paying down before the statement date can move a score 20–50 points in one cycle.
- Bring every account currentA 30-day late stops hurting more once it is 6–12 months old, but an account that is still past due is weighted heavily. Catching up removes the "currently delinquent" flag immediately.
- Add rent and utilitiesExperian Boost and similar services add on-time utility, phone and streaming payments to one bureau's file; several rent-reporting services add rent. Helpful mainly for thin files.
- Become an authorized userBeing added to a family member's old, low-utilization card imports its history to your file at most lenders. You do not need to use the card.
- Do not open or close anything elseNew inquiries and new accounts lower the average age of credit; closing an old card raises utilization. Hold still for the 60 days before you apply.
When you do apply, pre-qualify with several lenders inside a 14-day window: FICO treats multiple personal-loan inquiries in that span as rate shopping and counts them once.
Bad-credit loan questions
What counts as bad credit?
FICO calls 580–669 "fair" and anything below 580 "poor"; VantageScore uses similar bands. In practice, lenders treat anything under about 640 as subprime pricing territory: fewer approvals, APRs of 25%–36% from online lenders, and more weight on income and recent payment history than on the number itself.
Can I get a personal loan with a 500 credit score?
Rarely from an unsecured national lender; Avant and Upstart are the closest, and Upstart technically has no minimum, but approvals at 500 are uncommon and expensive. Realistic routes are a share-secured loan at a credit union (backed by your own savings), a co-signed or joint loan, a payday alternative loan if you are a credit-union member, or OneMain's secured loan backed by a vehicle.
What APR should I expect with bad credit?
Online lenders price scores under 640 at roughly 25%–35.99%, which is the ceiling most of them set. Federal credit unions cannot charge more than 18% on standard loans or 28% on a payday alternative loan, so a credit union is usually the cheapest approval for a fair or poor score. Anything above 36% is a payday, title or installment product that most consumer advocates and 20+ states' rate caps treat as predatory.
Do bad-credit loans require collateral?
Not necessarily, but offering it helps. A savings-secured loan or a vehicle-secured loan (OneMain, Best Egg, most credit unions) typically prices 2–6 points below the same borrower's unsecured offer and is far more likely to be approved. The risk is real: default means losing the collateral.
Will a bad-credit loan improve my score?
It can, if you pay on time. An installment loan adds to your credit mix, builds payment history, and if you use it to pay down cards your utilization falls. TransUnion found consolidation borrowers gained an average of 18 points within three months. The gain reverses quickly with a single 30-day late payment.
Are "guaranteed approval" or "no credit check" loans real?
Legitimate lenders do not guarantee approval and nearly all check credit, even if only a soft pull. "No credit check" offers are payday or title loans with triple-digit APRs, or outright scams that collect an upfront fee and disappear. The FTC lists guaranteed approval and advance fees as the two clearest warning signs; see our scams guide.
Should I use a co-signer?
If someone with good credit is willing, a co-signed or joint application is often the difference between 32% and 14% APR. Understand that the co-signer is fully liable: a missed payment lands on their report too, and the debt counts against their own borrowing capacity until it is paid.
Sources
- National Credit Union Administration, Permissible interest rate ceiling (18%) and Payday Alternative Loans, 12 CFR 701.21(c)(7)(iii)–(iv). ncua.gov
- Consumer Financial Protection Bureau, What is a payday loan? and What is a title loan?; CFPB research on payday rollover and title-loan repossession rates. consumerfinance.gov
- Federal Trade Commission, Advance-fee loan scams. consumer.ftc.gov
- FICO, What is a FICO score range? (score bands). myfico.com
- TransUnion, Debt consolidation study (18-point average score increase). newsroom.transunion.com
- Consumer Financial Protection Bureau, Military Lending Act 36% MAPR cap; National Consumer Law Center, state small-loan rate caps. nclc.org
- Lender rate, fee and minimum-score disclosures as verified for our lender reviews, October 2026.