Can I Get A Personal Loan with a 500 Credit Score?

In an ideal world, we would always have stellar credit scores to back us up in times of financial need. However, life doesn’t always go as planned, and sometimes our credit scores take a hit.

If you find yourself in a situation where you have a 500 credit score and need financial assistance, you might wonder if it’s possible to secure a personal loan. The good news is that it’s not impossible, but it is challenging and you will likely end up paying more in interest than someone with good credit.

In this article, we’ll explore the options for getting a personal loan with a 500 credit score.

What Does a 500 Credit Score Mean?

First, let’s understand what a 500 credit score means. Credit scores range from 300 to 850, with higher scores indicating better creditworthiness. When your credit score falls between 300 and 579 it’s rated as “very poor,” and it can make borrowing money difficult. Many lenders are unwilling to take a chance on you since your score suggests that you have a history of late payments, delinquency, and high credit utilization.

As a Bonus: Need $750 fast? Get your cash instantly with EarnIn. Cash advances up to $750 per pay period, no interest, no mandatory fees, and no credit checks.

Where Can I Go For a Loan With a 500 Credit Score

While traditional banks and credit unions may be reluctant to lend to individuals with a 500 credit score, there are still options. Consider online lenders with more lenient credit requirements – look for ones that specialize in bad credit loans. Try Peer-to-peer lending platforms that connect borrowers with individual investors. Or go for a secured loan where you use collateral like a car or savings account to back the loan.

As a Bonus: Get up to $5,000 with Money Mutual. Compare lenders, find the best offer for you, and get your cash within 24 hours!

How Can I Get a Personal Loan With Poor Credit?

Improve your chances of getting a personal loan with a 500 credit score by taking the following steps:

1. Check Your Credit Report: Review your credit report for errors and dispute any inaccuracies. This can potentially boost your score.
2. Shop Around: Compare loan offers from different lenders to find the best terms and interest rates available to you.
3. Understand the Criteria: Lenders who consider applicants with a 500 credit score may throw in additional criteria like employment history or income.
4. Determine the cost: Ask about any fees and the potential interest rates for the loan. You may have to prequalify in order to see the exact costs.
5. Provide Documentation: Be prepared to demonstrate your ability to repay the loan by providing proof of income and employment stability.

As a Bonus: Instantly access your credit score with ChoiceCreditScore! Keep tabs on your score and enhance it with tailored guidance from experts.

What Is the Easiest Type of Loan to Get With Poor Credit?

For those with a 500 credit score there are a few options with a higher rate of approval.

1. Secured Loans: Secured loans are the easiest to obtain and are backed by collateral – your car, house, or savings account – which reduces the lender’s risk. Be aware, that you risk losing your collateral if you don’t make payments.
2. Bad Credit Personal Loans: Online lenders who offer these loans tend to take into account the whole applicant – your income, employment history, home ownership – not just your credit score. These loans are typically unsecured so are a good option if you don’t have collateral.
3. Co-signed Loan: Add a co-signer with good credit to help you get approved and obtain lower interest rates and fees. The co-signer essentially “vouches” for your ability to repay the loan, making it less risky for the lender.
4. Payday loans: These loan are usually short-term and designed for people with low credit scores. Keep in mind that they typically come with high-interest rates and fees.

As a Bonus: Get a cash advance in 5 minutes or less with no credit check or mandatory fees. Download Brigit and score up to $250 per advance.

The Bottom Line

When you have a credit score of 500 it’s challenging but not impossible to get a personal loan. You’ll find that there are fewer options and less favorable terms than for someone with fair or good credit, but not every lender has closed their door to you.

New

Up your Money Game with MoneyFor

Become a MoneyFor member and get rewarded for the moves you’re already making with real money. Earn up to $999/month in rewards with everyday activity:

Start now

So check in with yourself and ask how badly you need that loan. If you can hold off, do so and improve your credit first so that you can secure a loan with more favorable terms and interest rates. If you can’t and you need money right away, consider the options we’ve suggested to find the loan that is right for you.

Want to improve your credit? It’s easier than it sounds.