6 Ways to get a loan with a 500 credit score

A FICO score of 579 or less is considered a bad credit score. 

According to Experian’s 2023 Consumer Credit Review, a little more than 12% of Americans score in that range. But that doesn’t mean you can’t get a loan with bad credit, even with a 500 credit score. 

The good news? You may be able to get approved for a loan, even when your credit is bad. The bad news? You’ll pay more—way more—than those who have fair or excellent credit. 

Personal loans are installment loans that provide money upfront, as soon as the same day you apply in some cases, or within one to three business days of approval. Compared to most other 500-credit-score loan options, they offer some of the longest repayment terms and most affordable borrowing costs.

Personal loans typically have a fixed interest rate, which means you repay them in equal payments over several months or years. Annual percentage rates (APRs) typically top out around 36% and are based largely on your credit. In other words, if you have a 500 credit score and can qualify for a personal loan, you should expect to pay an APR north of 30%.

Many lenders require a credit score above 500 to qualify for a personal loan, but others are more lenient. Upstart, for example, allows credit scores as low as 300, while TD Bank and Citi don’t set official credit score minimums. Additionally, some lenders offer options that can help you qualify, such as secured loans and the ability to apply with a cosigner or co-applicant.

A quick way to gauge whether you’re eligible for a personal loan is to prequalify with one or more lenders. It won’t hurt your credit score and takes a few minutes. But you may need to provide personal information, like your Social Security number, so lenders can soft-check your credit. Once you apply for a personal loan, the lender will conduct a hard credit pull, which could impact your score.

Important

A loan’s APR is a measure of how much it costs, and accounts for any upfront fees and the loan’s interest rate. Compare APRs between any loan types you’re considering

Payday alternative loans (PALs) are small, short-term loans that offer federal credit union members an affordable alternative to payday loans. Regulated by the National Credit Union Administration (NCUA), there are two types of PALs (I and II):Maximum interest rate: 28%Loan amounts: up to $2,000Loan term: up to 12 monthsApplication fee: Up to $20 per loanAvailable to: Federal credit union members of at least one month (PAL I); available to credit union members immediately upon joining (PAL II)

There is no set minimum credit score requirement to qualify for a PAL.

Credit-builder loans function more like savings accounts but help you build credit like a regular installment loan. Here’s how they work:You apply for a loan with a provider of credit-builder loans.If approved, the lender deposits the loan amount into a bank account (not yours).You agree to pay off the loan through installments (with interest) over a set term.Each payment is reported to the credit bureaus and helps to improve your credit reports and scores.Once the loan is paid off, you get the loan amount.

These won’t be a fit if you need to borrow money immediately, but they can be helpful if you need the money in the future and want to build a positive credit history.

Tip

Credit builder loans often have low rates – such as 5% APR – since you won’t receive the money until after you’ve paid for it.

Cash advance apps like Earnin, Dave, and MoneyLion allow you to borrow a small amount of money until your next paycheck. These apps often don’t require credit checks, so they’re great if you’re credit-challenged.

To apply, you join the app of your choice and connect your bank account. The company will assess your deposit and transaction history to decide if you qualify for an advance. Advance amounts vary depending on the app and your banking history but often range from $100 to $700.

If you take a cash advance, you’ll be asked how fast you want the money. The advance could be free if you can wait a few business days. For example, Earnin offers free transfers that take one to three business days. However, if you want the money in your account on the same day or within minutes, you’ll pay a fee — which is where cash apps can get expensive.

For example, Earnin also offers Lightning Speed transfers, which take minutes but cost from $3.99 to $4.99 per transfer. If you borrow $100 for two weeks and pay $4 to transfer it instantly, that equates to a 104% APR.

Good to know

Use an APR calculator or a payday loan calculator to find the APR on a short-term loan that charges fees instead of interest.

Payday loans are small, often around $500, that you can borrow and repay on your next payday. Unfortunately, these often come with high fees that make them hard to repay.

For example, a typical two-week payday loan that costs $15 per $100 borrowed amounts to an APR of 391%. But you could pay even more. For example, the average APR on a $500 payday loan in Idaho is 652%, according to Pew Research. If you can’t pay, many payday loan lenders will let you roll the loan into another payday loan, which may have more fees.

Many states have limits on payday lender fees, and some have even outlawed them altogether. In short, payday loans should be approached with extreme caution. Before taking one out, check your state’s rules, limits, and maximum fees. Cash advance apps and PALs offer a much more affordable short-term solution.

Title loans are high-risk loans that offer money secured by the title of a vehicle you own. The fees can be expensive, sometimes costing up to 25% of the amount you borrow, and the terms are usually short, around 30 days. If you can’t make payments as agreed, the lender can seize and sell your vehicle to recoup its costs. Due to the high risks and costs, these should be a last resort or non-option.

If you want a loan with a 500 credit score, the first step is to consider your loan options and resources to find the best fit.First, do you know your exact credit score? If not, check it for free at AnnualCreditReport.com. If it’s higher than 500, you may have additional options, like more personal loan lenders willing to consider your application.See if you can prequalify for a personal loan to get an idea of loan APRs you might qualify for.Compare loan and cash advance providers based on APR to get an idea of the lowest-cost loans available. Also, compare the repayment term and monthly payment amount. Can you afford to make payments for the term?Check whether your credit union offers PALs or if you’re eligible to join one that does.If you can wait for the money, consider a credit-builder loan. It will likely have the lowest APR available and can improve your credit score through timely payments.

Important: If possible, choose a personal, credit-builder, or another type of loan that reports payments to the credit bureaus (payday loans, cash advance apps, and title loans typically don’t). Timely payments can improve your score, making it easier and less expensive to borrow money in the future.

If you’re struggling to qualify for an affordable payment or loan type, consider whether you know someone with good credit willing to cosign a personal loan. They’re equally responsible for the loan, which can make lenders more willing to lend to you. Just know that if you miss payments, your cosigner is on the hook for them, and their credit (along with yours) would likely drop.

Your credit scores greatly impact your ability to get a personal loan.

Personal loans are often unsecured, so lenders primarily look at your income and credit to determine if they can trust you to make your loan payments on time. Lenders are told you’re a lower-risk borrower when your credit scores are good. When they’re poor, it raises red flags. As a result, the lower your credit scores, the harder it’ll be to get approved. And if you do get approved, you’ll likely pay a higher interest rate or high fees (or both).

For example, the average APR on a three-year personal loan to borrowers with a FICO score below 600 was 33.06%, according to Credible data in April 2024. The average APR for borrowers with a credit score over 780 was 12.54% on the same loan.

A good credit (FICO) score of 670 or higher will open up lower rates and additional loan options.

While getting approved with bad credit can be difficult, it may still be possible. Certain lenders specialize in bad credit bad credit personal loans. That said, the amount you can borrow will often be lower while your borrowing costs will be higher.Advertiser Disclosure

Overview

Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it’s also is one of few lenders that doesn’t have a minimum credit score requirement (if you apply on the lender’s website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.

Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.

Time to get funds

As soon as 1 to 3 business days

Loan uses

Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes

Overview

Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don’t need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.

However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.

Loan amount

$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)

Loan uses

Credit card refinancing, debt consolidation, home improvement, major purchase, other

Overview

Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who’ve prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.

Fees

Origination fee, late fee, dishonored payment fee

Eligibility

Available in all states except HI, IA, MA, ME, NY, VT, and WV

Time to get funds

As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)

Loan uses

Debt consolidation, emergency expense, life event, home improvement, and other purposes

Repayment terms

1 to 5 years (2 to 5 years through Credible)

Overview

Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.

Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you’ve improved your credit score.

Eligibility

A U.S. citizen or permanent resident; not available in DC, IA, SC, WV

Time to get funds

As soon as 1 business day after acceptance

Loan uses

Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases

Overview

OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can’t, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.

Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn’t a given. 

Fees

Origination fee, unsuccessful payment fee, late fee

Eligibility

Must have photo I.D. issued by U.S. federal, state or local government

Time to get funds

As soon as 1 to 2 days after acceptance

Loan use

All except business, and education

Fox Business does not make or arrange loans.

Good to know

OneMain also offers secured loans as well as cosigned personal loans, which could be an option if you can’t qualify for an unsecured loan.

If you can’t get approved with one of the lenders above, consider OppLoans which specializes in helping borrowers with bad credit get personal loans. It bases approval largely on your income but may run a soft credit check to learn about your credit history. Loan amounts through OppLoans range from $500 to $4,000 and APRs max out at 179%. While the APRs are high, they aren’t as high as those on payday loans and don’t include any origination fees.

A 500 credit score can make life a bit more difficult on the financial front. If you’re looking to improve your score, here are some steps you can take:Pay all of your credit accounts and bills on time.Keep your credit utilization on revolving credit lines down.Maintain a mix of installment and revolving credit accounts.Leave your revolving credit accounts open and active long-term.Limit the number of hard credit inquiries you allow.Monitor your credit reports and scores for improvements and catch any mistakes early on.Add utility bills you regularly pay to Experian’s Boost program.Consider getting a secured credit card or credit builder loan.

You may be able to get a personal loan with a 500 credit score by applying with lenders specializing in bad credit personal loans. Further, you can look for lenders that offer secured loans and the option to add a cosigner or co-applicant.

If you have bad credit and want a personal loan, you can look into lenders such as OppLoans, OneMain Financial, and Upstart. All of these companies offer flexible eligibility requirements that are tailored to people with less-than-perfect credit.

If you need cash fast but have bad credit, you may be able to get funds the same day through a personal loan or a cash advance app. Both are designed for speed and convenience. 

You can often apply online, get a decision in minutes, and, upon approval, have the money in your account within minutes or hours. However, some personal loan lenders may take one or more days to send funds, so make sure you apply for a fast personal loan.