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Can You Get a Loan if Your Credit Score Is Below 650?

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Your credit score is one of the factors that matters most during a loan application. If you plan to apply for a loan and your credit score is below 650, you might wonder whether you can get approved.

In this guide, we'll cover how a low credit score affects your chances of getting a loan. You'll also learn how to get the best loans for any credit score, and ways to make approval more likely.

Can you get a loan if your credit score is below 650?

You can get a personal loan with a credit score below 650. In general, the credit score you need for a personal loan is 550 or higher. This does depend on the lender, as each has its own minimum requirements. Also keep in mind that lenders tend to offer smaller loan amounts and charge higher interest rates to borrowers with lower credit scores.

How to get a loan with a credit score below 650

Here's the process to get a personal loan with a credit score below 650:

  1. Check your credit score.
  2. Look for lenders with a minimum credit score you can meet.
  3. Compare loan rates among the lenders you find.

To start, find out your credit score. Specifically, look up your FICO® Score, the one that's most widely used by lenders. There are multiple free credit score tools that provide your FICO® Score, including:

The next step is finding potential lenders that fit your credit score. A good place to start is the best personal loans for fair credit. Fair credit includes scores from 580 to 669 under the FICO® Score system. If your score is near the low end or below that range, look at personal loans for bad credit.

Once you have the lenders, it's time to go rate shopping. Most lenders have a prequalification option on their websites. After you enter some basic information, the lender runs a soft credit check on you, which doesn't affect your credit score. It then shows you the loan amount and interest rate that you're prequalified for.

Use the loan amounts and interest rates offered to choose a lender. After you've picked one, apply for your loan.

Compare the best personal loans

Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.

Lender APR Range Loan Amount Min. Credit Score Next Steps
Fixed: 8.99%-29.99% APR (with all discounts)
$5,000 - $100,000
680
7.99% - 24.99%
$2,500 - $40,000
660
7.80% - 35.99%
$1,000 - $50,000
300

Other ways to get a loan with a low credit score

There are some alternative loan options that may work better depending on your situation.

Get a cosigner

Some lenders let you apply for personal loans with a cosigner. A cosigner is another person who agrees to be responsible for your loan.

If you know anyone with a higher credit score than yours who is willing to cosign on your loan, this could help you get better loan terms. The lender uses the cosigner's credit to determine the interest rate and amount it can offer.

Check with your bank or credit union

If you have a relationship with a bank or credit union, it may be willing to issue you a personal loan with no credit or a low credit score.

Your regular bank or credit union has a better idea of your financial situation than a lender you've never used before does. If a loan officer sees that you have regular income and that you manage your money well, that could be your ticket to your loan.

Provide collateral for a secured loan

Personal loans are usually unsecured loans, meaning there's nothing for the lender to repossess if the borrower defaults. But it's possible to get a personal loan with collateral. This can make it easier to get approved.

When you provide collateral for your loan, it's a secured loan. Most items of value that can be professionally appraised are an option to use as collateral. Common collateral choices include:

  • Vehicles
  • Real estate
  • Jewelry
  • Bank accounts
  • Investment accounts

Saving money on your loan

A good rule to follow with personal loans is to not borrow more than necessary. This is even more important when you have a low credit score because of the higher interest rates. Figure out how much money you need first. And then only borrow that amount, even if the lender offers you more.

Your loan's term is also important. A longer loan term means lower monthly payments, but also results in more interest charges. Pick the shortest term that works for you, so you can minimize interest without having trouble making your payments.

If you pick the lowest loan amount and the shortest term you can manage, your loan won't be more expensive than necessary. It may cost you interest, but you'll have the money you need, and it can even help your credit improve as you pay back the loan.

FAQs

  • Lenders look at much more than just your credit score when determining creditworthiness, but they do generally require that your FICO® Score be at least 550. Many will prefer a score of at least 580 for lending though.

  • When determining how much money to lend, a bank generally looks at a lot more than your credit score. For example, it will also want to know how much money you make and how much of that is spent on bills and other expenses. Your loan amount will be based on how much you can repay, but your interest rate is generally based on your credit score, so it definitely influences the calculation.

  • You should be able to qualify for many unsecured personal loans with a credit score under 650, though the interest rates may be quite high. You can possibly lower those rates by offering collateral, depending on the source of your loan.