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By
Jerry Brown
Jerry Brown
Personal Loans & Debt Consolidation Expert
Jerry is a freelance contributor to Newsweek’s personal finance team. He primarily covers loans, including personal loans, home equity loans and student loans. When he isn’t writing, he enjoys spending time with family, riding an electric bike or scooter through the French Quarter in New Orleans and traveling.
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Claire Dickey
Claire Dickey
Senior Editor
Claire is a senior editor at Newsweek focused on credit cards, loans and banking. Her top priority is providing unbiased, in-depth personal finance content to ensure readers are well-equipped with knowledge when making financial decisions.
Prior to Newsweek, Claire spent five years at Bankrate as a lead credit cards editor. You can find her jogging through Austin, TX, or playing tourist in her free time.
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Getting a personal loan with a credit score in the 500s is possible—some lenders look beyond your credit profile.
When you have a credit of 500, qualifying for a personal loan could be challenging. But some lenders approved applicants with poor credit scores—or a FICO Score less than 580. The downside is that lenders often charge higher rates for these loans.
However, a personal loan could still be beneficial, especially if you need money fast to cover an emergency. We created a list of the top lenders with low credit score requirements and offer tips for strengthening your credit profile.
Our Methodology
Newsweek Vault’s loan experts evaluated multiple data points to help our readers make sense of their borrowing options across student loans and personal loans. To narrow down the best available offers, we weigh the product pros and cons across five core categories, including:
- Application process
- Eligibility requirements
- Interest rates
- Loan amounts (minimum and maximum)
- Repayment flexibility”
Our Picks
- Best for Quick Funding: Avant
- Best Overall: Upstart
- Best for Home-Secured Loans: Best Egg
- Best for Flexible Repayment Schedule: Upgrade
- Best for Low Fair Credit Scores: LendingClub
Where To Get a Personal Loan With a 500 Credit Score in 2024
Best for Quick Funding
Avant
on Credible’s website
Loan Amount
$2,000 to $35,000
Minimum Credit Score
580
Repayment Schedule
24 to 60 months
APR
9.95% to 35.99%
Why We Chose It
Avant’s minimum credit score requirement is just 580. Once approved, you could receive funds the next day. Plus, you can use Avant’s mobile app to manage your loan, which has high ratings on the App Store and Google Play.
Pros
- Option to prequalify
- Fast funding
- Mobile app
Cons
- Maximum APR of 35.99%
- Not available in all states
- Origination and late fees
Additional Information
- Fees: Administration fee up to 9.99% of loan amount; $25 late fee
- Funding Speed: As early as the next business day
- Loan Availability: Available in all states except for Hawaii, Iowa, Maine and Vermont
Best Overall
Upstart
on Credible’s website
Loan Amount
$1,000 to $50,000
Minimum Credit Score
300
Repayment Schedule
36 or 60 months
APR
7.80% to 35.99%
Why We Chose It
Upstart offers personal loans up to $50,000 to borrowers that are accessible to borrowers with little credit history. The minimum score for borrowers with credit scores is 300. That said, you won’t qualify if you have any current delinquencies listed on your credit reports.
Pros
- Accessible to borrowers with little credit history
- Competitive starting APR
- Available in all states
Cons
- Origination fee up to 12%
- Co-borrowers and co-signers not allowed
- Only 3- or 5-year terms available
Additional Information
- Fees: Origination fee up to 12% of loan amount; $15 late fee
- Funding Speed: As soon as the next business day
- Loan Availability: Available in all 50 states
Best for Home-Secured Loans
Best Egg
on Credible’s website
Loan Amount
$2,000 to $50,000
Minimum Credit Score
560
Repayment Schedule
24 to 60 months
APR
8.99% to 35.99%
Why We Chose It
Best Egg is one of few lenders that offer unsecured and secured loans. Applicants can receive up to a 20% discount when taking out a loan secured by fixtures in their home instead of an unsecured loan, according to the lender’s website.
Pros
- Offers fixture-secured loans
- Rate discounts for homeowners
- Can opt to send funds directly to creditors
Cons
- Returned payment and origination fees
- Funding might take up to 3 days
- Not offered in all states
Additional Information
- Fees: $15 returned payment fee; Origination fees: 0.99% to 8.99% of loan amount
- Funding Speed: Up to 3 business days
- Loan Availability: All states except Iowa, Vermont, West Virginia and the District of Columbia
Best for Flexible Repayment Schedule
Upgrade
on Credible’s website
Loan Amount
$1,000 to $50,000
Minimum Credit Score
560
Repayment Schedule
24 to 84 months
APR
8.49% to 35.99%
Why We Chose It
Upgrade offers flexible repayment schedules of up to seven years to borrowers with credit scores as low as 560. The lender also has a 15-day grace period on late payments—which could be beneficial if you encounter some financial difficulties one month.
Pros
- Repayment terms up to 7 years
- Wide range of loan amounts
- Fifteen-day grace period on late payments
Cons
- Could take up to two weeks to send funds to creditors
- All loans come with origination fees
- Potentially high rate
Additional Information
- Fees: Origination fees: 1.85% to 9.99% of loan amount; Late fee: $10 (15-day grace period)
- Funding Speed: As early as the next day once approved
- Loan Availability: Available in all states and the District of Columbia
Best for Low Fair Credit Scores
LendingClub
on Credible’s website
Loan Amount
$1,000 to $40,000
Minimum Credit Score
600
Repayment Schedule
24 to 60 months
APR
8.98% to 35.99%
Why We Chose It
LendingClub personal loans are available to borrowers in all 50 states. The minimum credit score is 600, and you can add a co-borrower to your loan application to possibly get a lower rate or higher loan amount.
Pros
- Option to apply with a co-borrower
- Prequalify without hurting credit
- Available in all 50 states
Cons
- High APR range
- Origination fees
- Funding can take up to 3 days
Additional Information
- Fees: Origination fees range from 3% to 8% of loan amount; Late fee of 5% of outstanding balance or $15, whichever is higher
- Funding Speed: 1 to 3 business days
- Loan Availability: All states and the District of Columbia
How To Apply for a Personal Loan With a 500 Credit Score
Many financial institutions allow you to apply for a personal loan online. In addition, you could apply in person at a bank or credit union that has a physical branch in your area.
Here are the typical steps to apply for a personal loan on a lender’s website:
- Prequalify. Compare potential offers, including rates and repayment schedules—by submitting prequalification applications with several lenders. This step doesn’t require a credit check, so it’s an excellent way to shop around for the best deal.
- Gather financial information. Set aside documents a lender may ask you to provide when applying, like recent bank statements, W-2s and tax returns.
- Submit application. After you’ve found the right lender for you, move forward with submitting a full loan application.
- Sign your loan paperwork. Review your loan agreement carefully before agreeing to the terms, including APR and repayment schedule.
How To Improve Your Credit Score
If you don’t need to borrow money immediately, consider taking steps to improve your credit before applying. Doing so could help you secure a lower rate and give you a better shot of getting approved.
- Become an authorized user. Ask a family member with stellar credit to add you as an authorized user on their oldest credit card. As long as the primary cardholder pays the bill on time, it could help you build credit. But on the flip side, if they make late payments, it’s possible that it could lower their score and yours.
- Pay down debt. Make payments on revolving debt, like credit cards, to lower your credit utilization ratio.
- Keep credit cards account open. Consider keeping your credit card accounts open. When you close a card, it could raise your credit utilization ratio.
How To Choose the Best Personal Loans for You
The best personal loan option for you will often have the lowest overall borrowing costs. Here’s what you need to pay attention to while shopping around.
Eligibility Requirements
Before applying, review a lender’s eligibility requirements to ensure you meet them. If you don’t meet the requirements, ask the lender whether you can apply with a co-signer who does to boost your approval odds.
Loan Amounts
Lenders offer various loan amounts, but personal loans for bad credit generally range from $1,000 to $50,000. But compare potential offers—the exact amount you qualify for will vary depending on your income and how much existing debt you have.
Personal Loan Rates
Prequalify with as many lenders as you can to compare annual percentage rates (APRs), which include interest and fees.
Repayment Terms
The repayment term you select can also affect your borrowing costs. Shorter-term loans have higher monthly payments but you typically pay less interest. Personal loans with longer repayment schedules have lower monthly payments, but you generally pay more in total interest.
Personal loans vs. Alternatives
Although personal loans can be handy financial tools, they might not be the best borrowing option for you. Below are some alternatives to consider.
Personal Loan vs. Credit Card
If you need to borrow money fast and expect to pay it back within 30 days, using an existing credit card in your wallet could be cheaper. As long as you repay your statement balance in full before or on your due date, you can avoid interest fees. However, note that you’ll pay interest on any remaining balance at your card’s regular APR.
Personal Loans vs. Home Equity Loans
Home equity loans often come with lower rates than personal loans because your home secures the loan. Like personal loans, this option generally comes with fixed rates and repayment terms. But a major drawback is that a lender can foreclose on your home if you don’t repay the loan as promised.
Personal Loans vs. Savings
If you can wait to make a purchase, saving up money to pay it in full is often the ideal choice. By doing this, you can avoid paying interest. You can start building your savings today by opening a high-yield savings account.
Frequently Asked Questions
Can I Qualify for a Personal Loan With a 500 Credit Score?
It’s possible to get approved for a personal loan with a low credit score. Some lenders, like Upstart, have minimum credit score requirements as low as 300. If a lender allows it, consider applying for a personal loan with a co-signer who has a higher credit score to increase your approval chances.
What Size Personal Loan Can I Get With a 500 Credit Score?
The answer depends on the lender’s maximum loan amount. When you apply, the lender will determine your exact loan amount if you are approved based on your income, outstanding debt and credit profile.
How Does Taking Out a Personal Loan Affect My Credit?
Lenders generally perform a hard credit inquiry when you apply, and this can lower your credit score a few points. As you repay the loan, your credit score should recover and might even improve if on-time payments are reported to the three major credit agencies—Equifax, Experian and TransUnion. But if you default on the loan, it could cause a substantial drop in your credit score.
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
Jerry Brown
Personal Loans & Debt Consolidation Expert
Jerry is a freelance contributor to Newsweek’s personal finance team. He primarily covers loans, including personal loans, home equity loans and student loans. When he isn’t writing, he enjoys spending time with family, riding an electric bike or scooter through the French Quarter in New Orleans and traveling.
Read more articles by Jerry Brown
