When I first started looking into personal loans with a credit score under 600, I figured I was out of luck. Every bank I checked basically told me the same thing: come back when your score is higher. But after doing a ton of research (and actually applying to a few lenders myself), I found out there are real options out there.
A growing number of online lenders now specialize in working with borrowers who have fair or poor credit. Some use AI and alternative data to look beyond your credit score, which means you could get approved even if your FICO number alone would get you rejected at a traditional bank.
Here’s everything I learned about getting a personal loan with a sub-600 credit score, and what to do if a personal loan isn’t the right move for your situation.
What lenders actually look at when your credit score is low
Traditional lenders rely heavily on your credit score. But the online lenders that cater to bad credit borrowers? They evaluate a much broader picture:
- Income and employment: Can you actually afford the monthly payments?
- Education and career trajectory: Are your earnings likely to grow?
- Banking history: Do you manage your checking account responsibly?
- Debt-to-income ratio: How much of your income already goes toward debt?
This was a game-changer for me. If your credit score is low because of a past mistake but your current income and financial habits are solid, these lenders give you a real chance.
Two lenders I’d check first
You don’t need to apply to a dozen lenders. Based on what I found looking at approval rates and terms for sub-600 borrowers, these two should be your starting point:
Upstart (best for scores under 580)
Upstart uses an AI model that evaluates over 1,600 data points, not just your credit score. They’ve approved borrowers with scores as low as 300, which is unheard of at most lenders.
- Loan amounts: $1,000 to $50,000
- APR: 7.80% to 35.99%
- Terms: 3 or 5 years
- Origination fee: 0% to 12%
- Min credit score: 300
- Funding: As fast as 1 business day
What I really like about Upstart is that their AI looks at your education, employment history, and earning potential. These are factors that traditional lenders completely ignore. So if your credit score is low but you have a stable job or a degree, this works in your favor. Checking your rate is a soft pull. It won’t affect your credit score.
Upgrade (best for scores 580 to 620)
Upgrade is one of the largest online lenders for fair credit borrowers. If you’re looking to consolidate credit card debt, they have a standout feature: they’ll send your loan funds directly to your creditors so you don’t have to manage multiple payments yourself.
- Loan amounts: $1,000 to $50,000
- APR: 9.99% to 35.99%
- Terms: 2 to 7 years
- Origination fee: 1.85% to 9.99%
- Min credit score: 580
- Funding: Within 1 business day
Upgrade also lets you check your rate with a soft pull first. Fixed rates and fixed monthly payments mean no surprises.
What rates and fees to expect
I’ll be upfront with you: borrowing with a sub-600 credit score is more expensive. Here’s what’s realistic:
- 580 to 599 credit score: Expect APRs in the 15% to 30% range
- 500 to 579 credit score: Expect APRs in the 20% to 36% range
- Below 500: Expect APRs at the higher end, 25% to 36%
These rates are significantly higher than what borrowers with 720+ scores pay (7% to 12%). But here’s some context that helped me put things in perspective:
- The average credit card APR is over 20%
- Credit card cash advances typically charge 25%+
- Payday loans carry the equivalent of 400%+ APR
A personal loan, even at the higher end, is almost always the cheapest way to borrow if you have bad credit.
Most bad credit lenders also charge an origination fee (1% to 12%), which is deducted from your loan amount before disbursement. On a $5,000 loan with a 6% origination fee, you’d receive $4,700. Factor this into how much you borrow.
How a personal loan can actually help your credit
Here’s something most people don’t realize: taking out a personal loan and making on-time payments is one of the fastest ways to rebuild bad credit.
This was honestly one of the biggest things I learned through this whole process.
Payment history is 35% of your score. Each monthly payment you make on time gets reported to the credit bureaus. A personal loan gives you 24 to 60 months of positive payment history, which is the single biggest factor in your credit score.
Credit utilization is 30% of your score. If you use the loan to pay off credit card balances, your utilization drops. Going from 80% utilization to 20% can boost your score by 50+ points almost immediately.
Credit mix is 10% of your score. If you only have credit cards, adding an installment loan diversifies your credit profile, which helps. Many borrowers who start under 600 see their score increase by 50 to 100 points within 6 to 12 months of consistent on-time payments.
That means better rates and more options next time you borrow.
7 ways to improve your approval odds
Regardless of which option you pursue, these are the steps I’d recommend:
1. Check your credit report for errors. The FTC found that 1 in 5 credit reports contain mistakes. Go to AnnualCreditReport.com, pull your reports from all three bureaus, and dispute anything inaccurate. Fixing errors alone can raise your score by 20 to 100 points.
2. Only apply where you can prequalify with a soft pull. Both Upstart and Upgrade let you check your rate without affecting your credit score. This lets you compare offers before committing.
3. Add a co-signer. Someone with good credit co-signing your application can significantly improve your odds and lower your rate. Just make sure they understand they’re equally on the hook for repayment.
4. Borrow less. Asking for $3,000 is much easier to get approved for than $15,000. Start with the minimum you actually need.
5. Show stable income. If your credit is weak, strong income becomes the most important factor. Have pay stubs, tax returns, and bank statements ready.
6. Try a secured loan. Offering collateral (a savings account, vehicle, or other asset) makes you a lower risk borrower, which means easier approval and lower rates.
7. Avoid payday loans. With APRs that can exceed 400%, payday loans almost always make your financial situation worse. Every option in this article is dramatically cheaper.
Alternatives if a personal loan isn’t right for you
A personal loan isn’t always the best move, especially if you’re already deep in debt or if you own a home. Here are two situations where I’d recommend a different approach.
If you have more than $10,000 in debt
If you’re carrying $10,000 or more in credit card debt, medical bills, or other unsecured debt, taking out a personal loan might not be the best move. You’d essentially be taking on more debt to cover existing debt, and with a low credit score, you’ll be paying a high interest rate to do it.
In this situation, debt relief may be the better path. Debt relief companies negotiate directly with your creditors to reduce what you owe, often by 30% to 50%, so you pay back less than your full balance.
Two companies I recommend:
National Debt Relief is the largest debt settlement company in the U.S. They’ve resolved over $5 billion in consumer debt, charge no upfront fees, and carry an A+ BBB rating. Most clients become debt free within 24 to 48 months.
Accredited Debt Relief is another highly rated option. They specialize in lowering your monthly payments and have resolved over $2 billion in debt. Also A+ rated by the BBB with no upfront fees. Both offer a free consultation with no obligation.
If your debt is more than $10,000, it’s worth seeing what they can do before borrowing more money.
Get a free debt analysis from National Debt Relief →
Get a free consultation from Accredited Debt Relief →
If you own a home
Homeowners have an option that most people overlook: tapping into your home equity without taking out a traditional loan. Instead of borrowing money (and dealing with monthly payments, interest, and credit score requirements), you can access a portion of your home’s value through a home equity investment.
You receive cash now, and you settle up when you sell or at the end of a 10 year term. No monthly payments. No interest charges. No credit score minimums.
Two companies that do this:
Hometap lets you access up to $600,000 of your home equity with zero monthly payments and zero interest. There are no income requirements and no need for perfect credit. You settle when you sell your home or at the end of a 10 year term.
Unison works similarly. They invest in your home alongside you and share in the appreciation (or depreciation) when you sell. It’s another way to unlock cash from your home without taking on debt or monthly payments. If your credit score is preventing you from getting approved for a personal loan, your home equity could be the answer.
Get a free estimate from Hometap →
Frequently asked questions
What is the easiest personal loan to get with bad credit?
Upstart is the most accessible option for bad credit borrowers. Their AI underwriting model accepts scores as low as 300 and considers factors like education and employment history that other lenders ignore.
Can I get a personal loan with a 500 credit score?
Yes. Upstart approves borrowers in the 500 range regularly. You’ll pay a higher interest rate (20% to 36% APR) and may need to show solid income, but it’s very much possible. It’s still far cheaper than a payday loan.
Will checking my rate hurt my credit score?
No. Both Upstart and Upgrade use a soft credit pull for prequalification. Your score is only affected if you accept an offer and formally apply (which triggers a hard inquiry).
Should I get a personal loan or do debt relief?
It depends on how much debt you have. If you need cash for a specific expense and can afford the monthly payments, a personal loan makes sense. If you’re already drowning in $10,000+ of debt and struggling to keep up, debt relief may be better. It can reduce what you owe by 30 to 50%.
What if I own a home? Should I still get a personal loan?
Not necessarily. If you have home equity, a home equity investment from Hometap lets you access cash with no monthly payments, no interest, and no credit score requirement. For homeowners, this is often a better deal than a personal loan.
Bottom line
A sub-600 credit score limits your options, but it doesn’t eliminate them. Start by checking your rate on Upstart (best for scores under 580) or Upgrade (best for 580+).
Neither check will affect your credit score. If you’re carrying more than $10,000 in debt, look into National Debt Relief or Accredited Debt Relief instead. And if you own a home, Hometap lets you skip the credit score issue entirely.