How to Get a Personal Loan With a Credit Score Under 550

personal loan credit score 550

There’s poor credit – and then there are credit scores that make it close, if not impossible, to borrow at all.

If you need a personal loan, a credit score that’s 550 or less makes it difficult to qualify. But it’s still possible to get low credit score personal loans.

What is a bad credit score for personal loans?

If you’re looking for a personal loan with a credit score of 550, you likely have a good idea of what your credit score is. Unfortunately, you probably also know that you have bad credit.

A FICO credit score under 580 is considered to be poor credit. If your score is below that, it will be hard to qualify for a personal loan.

And for a pretty good reason: over 60 percent of consumers with poor credit scores become delinquent on an account, according to MyFICO.com. To a lender, your credit score makes it likely there will be issues down the road collecting on any loaned funds.

Most personal lenders won’t even consider an applicant with a credit score under 600. But other types of person loans or lenders might still be an option, even with a 550 credit score.

Tips to get a personal loan with credit score 550 or less

When you’re shopping for low-credit-score personal loans, you probably won’t have an abundance of options. And you should expect to make some tradeoffs, like paying high interest rates or even offering collateral.

But there are some strategies you can try to get a personal loan with poor credit.

1. Start rebuilding your credit

If you have a credit score of 550, you’re just 30 points from a “fair” credit score. It might be worth it to take some time improving your credit. It will still be below average, and you’re likely to pay higher interest rates. But your chances for approval will also be much higher, and you’ll get access to a much wider range of lenders.

If you want to rebuild credit, start today. You’ll want to understand how your credit score is calculated. A secured credit card is an accessible form of credit you can use to raise your credit score.

Check your credit reports for errors that could be hurting your score. And make sure you’re making every payment on time.

2. Get quotes from bad credit lenders

If you can’t wait to improve your credit, you can try reaching out to lenders that offer finance for bad credit. For these personal loans, a credit score 550 or under might not be an obstacle to qualifying. You can apply for a pre-approval to find out if you qualify without having to fill out an application or undergo a hard credit check.

A trusted lender we recommend is Avant, which has a FICO score minimum of just 580. If you have truly bad credit, OneMain is a lender with no minimum credit score. BadCreditLoans.com can also connect you with a network of lenders who approve applicants with poor credit. Or you can try peer-to-peer lending platforms like LendingClub or Peerform.

3. Enlist a co-signer

If you can’t rely on your own credit score to get a personal loan, try borrowing someone else’s good credit with a co-signer. A co-signer is a third party (usually a close family member or friend) who has agreed to repay your loan if you should default on it.

Choose a lender that accepts co-signers for personal loans, like Earnest or Citizens Bank. You’ll need to ask someone with good credit to act as your personal loan co-applicant. Their positive history will help offset your poor credit score, increasing your chances of approval.

4. Ask friends or family members for a loan

Getting a personal loan from an individual usually doesn’t include a credit check. So for these personal loans, credit scores of 550 or under aren’t a big deal. You can ask a family member or friend who has the cash to lend it to you.

Before you borrow this way, fully outline and agree on the terms ahead of time. And keep up on payments to ensure the loan doesn’t hurt the relationship.

5. Get a secured loan

An unsecured personal loan might be a long shot with a credit score under 580. But you might be able to borrow against an asset to get a secured loan, including:

  • Home equity with a HELOC
  • A car with a car equity loan
  • Savings or CDs with a savings-secured personal loan
  • Retirement account with a 401k or IRA loan

Check with your bank for these types of loans. Credit unions also commonly offer savings- or CD-secured loans to help members rebuild credit.

6. Ask the lender to reconsider

If you apply for a personal loan and get rejected, you can always follow-up with the lender and ask them to reconsider, according to Debt.org.

First, you’ll want to make sure you have some good reasons why they should approve your for a loan – despite your bad credit. What other financial factors show you’re a safe bet? What additional information can you give that proves you’re a responsible borrower?

Maybe you have a high income and could easily afford the new debt. Or you have a good explanation for a past delinquency. If your credit file is thin, you could try to provide proof of positive payment history toward other bills, like your rent.

This is a bit of a long shot, but it can be worth trying. Chances of success will be higher the more proof of financial stability and security you can give. It might also help to try a credit union, which might be more flexible in their underwriting.

7. Watch for predatory lending

Last but not least – don’t sign up for a predatory loan just because you really need cash now. This includes payday loans, car title loans or advance-fee loans; they’re among the most expensive ways to borrow.

You’ll get stuck with costs you can’t afford that will only worsen your situation and could even hurt your credit. Protect yourself and watch out for predatory lenders. Take your time, research options and don’t borrow money you can’t afford to.

Interested in a personal loan?

Here are the top personal loan lenders of 2017!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

2 Important Disclosures for Citizens Bank.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.19% APR to 11.32% APR (with AutoPay). SoFi rate ranges are current as of July 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 4.99% APR assumes current 1-month LIBOR rate of 1.22% plus 3.95% margin minus 0.25% autopay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with Citizens Bank at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, Citizens Bank checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
5.19% - 14.24%1$5,000 - $100,000Visit SoFi
8.00% - 25.00%$5,000 - $35,000Visit Payoff
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.