How to Get a Personal Loan with Bad Credit in 2025
🔍 What is Considered Bad Credit?
Before diving into loans, it’s important to understand what “bad credit” means. Credit scores typically range from 300 to 850.
Here’s a general breakdown:
- Excellent: 750–850
- Good: 700–749
- Fair: 640–699
- Poor (Bad Credit): 300–639
If your credit score falls below 640, lenders may consider you a risky borrower. But that doesn’t mean you can’t get a loan—it just means you may face higher interest rates or limited options.
💡 Can You Get a Personal Loan with Bad Credit?
Yes, you can. In 2025, more lenders are offering loan products specifically designed for people with poor credit.
Here are some common ways people with bad credit secure personal loans:
- Online lenders that specialize in subprime credit
- Credit unions with flexible approval requirements
- Secured personal loans that use collateral
- Co-signed loans backed by someone with better credit
The key is knowing where to look and how to prepare.
🏆 Best Personal Loan Options for Bad Credit in 2025
Here are a few trusted lenders known to work with bad-credit borrowers:
1. Upgrade
- Minimum Credit Score: 560
- Loan Amounts: $1,000 – $50,000
- APR: 8.49% – 35.99%
- Pros: Fast funding, prequalification with soft check
- Cons: High interest for low scores
2. Upstart
- Minimum Credit Score: 300 (or none)
- Loan Amounts: $1,000 – $50,000
- APR: 6.40% – 35.99%
- Pros: AI-based approval, no minimum credit history
- Cons: Origination fees
3. OneMain Financial
- Minimum Credit Score: None
- Loan Amounts: $1,500 – $20,000
- APR: 18% – 35.99%
- Pros: Available to almost everyone
- Cons: Higher rates, may require in-person visit
4. Avant
- Minimum Credit Score: 580
- Loan Amounts: $2,000 – $35,000
- APR: 9.95% – 35.99%
- Pros: Great for fair credit
- Cons: Not available in all states
📋 Requirements to Qualify for a Bad Credit Loan
While every lender is different, here’s what most will typically look for:
- Proof of income (pay stubs, bank statements, or tax returns)
- Employment status or steady income source
- Government-issued ID
- Bank account
- Debt-to-income ratio (preferably under 40%)
Some lenders may also require collateral (e.g., a car or savings account) for secured loans.
📉 Expect Higher Interest Rates
One of the trade-offs of having bad credit is paying higher interest rates. For example, while someone with good credit might get a loan at 8%, a bad credit borrower might be offered 28% or more.
That’s why it’s crucial to:
- Compare multiple lenders
- Check for hidden fees (origination, late, or prepayment fees)
- Choose shorter terms to avoid long-term interest
🤝 Consider a Co-Signer
If your score is too low to qualify alone, a co-signer with good credit can boost your approval chances. But remember:
If you miss payments, your co-signer is legally responsible.
Make sure you both understand the terms before proceeding.
🔒 Secured vs. Unsecured Loans
🔐 Secured Loan
- Requires collateral (car, savings, etc.)
- Easier to qualify
- Lower interest rates
- Risk of losing asset if you default
🔓 Unsecured Loan
- No collateral needed
- Based on creditworthiness
- Higher interest rates
- Safer but harder to qualify
🔧 Tips to Improve Your Chances of Getting Approved
- Check your credit report for errors Visit AnnualCreditReport.com for a free copy.
- Pay down existing debt to lower your debt-to-income ratio
- Apply for prequalification (soft check) to compare offers
- Avoid applying to multiple lenders at once — too many hard checks can hurt your score
- Add a co-signer or consider a secured loan
📈 How to Improve Your Credit Over Time
Even if you get approved, it’s a good time to start improving your credit for the future.
Here’s how:
- Make payments on time — even one missed payment can hurt
- Use a credit-builder loan or secured credit card
- Keep credit utilization under 30%
- Avoid new unnecessary credit inquiries
✅ Final Thoughts: You Can Get a Loan with Bad Credit
Having bad credit doesn’t mean you’re out of options. In 2025, personal loans are more accessible than ever—even for people with credit scores below 600. With the right lender, proper documentation, and responsible borrowing habits, you can secure a loan and rebuild your financial foundation.
📌 Quick FAQs
Q: Can I get a personal loan with a 500 credit score?
👉 Yes, some lenders like Upstart or OneMain Financial may approve you based on income or other factors.
Q: How much can I borrow with bad credit?
👉 Typically between $1,000 and $20,000, depending on the lender and your income.
Q: Will a personal loan improve my credit?
👉 Yes, if you make payments on time and pay in full.
Q: How fast can I get the funds?
👉 Many online lenders offer same-day or next-day funding.
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