Credit score

Where to get a personal loan with a credit score of 550

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You can get a personal loan with a credit score of 550. Learn more about your options. (iStock)

Before approving a borrower for a personal loan, most lenders will look for a good to excellent credit rating, stable income and work history, and a low debt ratio. While it is possible to get a loan with a credit score of 550, there are downsides. You may have to settle for a higher interest rate or high fees, which add to the lifetime cost of a personal loan.

Credible, it’s easy to compare personal lender rates willing to work with borrowers with poor or fair credit.

Can I get a personal loan with a credit score of 550?

You may be able to get a personal loan with a credit score of 550. But keep in mind that you will have to shop around because not all lenders will make an offer for someone with a low credit score.

Lenders who give loans to borrowers with lower credit scores may charge higher interest rates and fees. They may also require that you provide collateral or an asset that you own.

What is considered bad, good and excellent credit score?

Most credit scores range from 300 to 850. Here’s how they break down:

  • Below 580 – Bad
  • 580-669 – Fair
  • 670-739 – Good
  • 740-850 – Excellent

How Credit Ratings Affect Personal Loan Rates

Lenders look to credit scores to get a feel for how you’ve handled credit in the past, and how likely you are to handle a new loan. A higher credit score can signal lenders that you are more likely to pay off a loan on time and as agreed. You may have a better chance of getting approved for a low interest loan.

Conversely, a lower credit score can signal lenders that you have had difficulty managing your credit in the past and that you may be having difficulty repaying a new loan. Since the lender sees you as a riskier borrower, you are likely to be offered higher interest rates.

Best lenders for personal loans with bad credit

These eight credible partner lenders offer bad credit loan options.

Before

Avant is an online lending platform that has been in existence since 2013 and has provided loans to over 600,000 borrowers.

  • Loan amounts: $ 2,000 to $ 35,000
  • Loan conditions : 2 to 5 years
  • Minimum credit score: 550
  • May be good for: Borrowers Who Need Quick Financing

Best egg

Best Egg is an online lending platform that has served over 500,000 people with over $ 8 billion in funding.

  • Loan amounts: $ 5,000 to $ 50,000
  • Loan conditions : 2 to 5 years
  • Minimum credit score: 600
  • May be good for: Borrowers who wish to repay their loan early

Loan Club

LendingClub is a peer-to-peer lending platform that connects borrowers with investors who want to lend them money.

  • Loan amounts: $ 1,000 to $ 40,000
  • Loan conditions : 3 or 5 years
  • Minimum credit score: 600
  • May be good for: Borrowers who want to consolidate their credit card debt

Loan point

LendingPoint is a direct personal lender that offers loans of up to $ 36,500 as of the next business day.

  • Loan amounts: $ 2,000 to $ 36,500
  • Loan conditions : 2-4 years
  • Minimum credit score: 580
  • May be good for: Borrowers who need a smaller personal loan quickly

OneMain Financial

OneMain is a large lender that offers secured and unsecured personal loans of up to $ 20,000.

  • Loan amounts: $ 1,500 to $ 20,000
  • Loan conditions : 2 to 5 years
  • Minimum credit score: Nothing
  • May be good for: Borrowers who want to borrow a small amount of money

Universal Credit

Powered by Upgrade, a loan broker in San Francisco, Universal Credit is a lending platform that provides and manages personal loans funded by partner banks.

  • Loan amounts: $ 1,000 to $ 50,000
  • Loan conditions : 3 to 5 years
  • Minimum credit score: 560
  • May be good for: Borrowers Who Want Quick Financing

To improve

Upgrade is an online lender that provides quick approval for fixed rate personal loans of up to $ 50,000.

  • Loan amounts: $ 1,000 to $ 50,000
  • Loan conditions : 2-7 years
  • Minimum credit score: 560
  • May be good for: Borrowers who want to build a credit history

Reached

Upstart is an online loan platform that offers personal loans of $ 1,000 to $ 50,000 from several lending partners.

  • Loan amounts: $ 1,000 to $ 50,000
  • Loan conditions : 3 to 5 years
  • Minimum credit score: 580
  • May be good for: Borrowers with a solid education and professional background

You can see the rates of prequalified personal loans in minutes, without affecting your credit, when you use Credible.

Other lenders to consider

The following three lenders are not Credible partners, so you will not be able to easily compare your rates with them on the Credible platform. They don’t disclose their minimum credit score requirements, but they can also be great if you’re looking for a personal loan with a bad credit score.

Citizen’s Bank

  • Loan amounts: $ 5,000 to $ 50,000
  • Loan conditions : 3 to 7 years

HSBC Bank

  • Loan amounts: $ 3,000 to $ 50,000
  • Loan conditions : 2 to 5 years

Rocket loans

  • Loan amounts: $ 2,000 to $ 45,000
  • Loan conditions : 3 or 5 years

Methodology

Credible assessed the best personal loan lenders for bad credit based on factors such as customer experience, minimum fixed rate, maximum loan amount, length of financing, loan terms and fees. Credible’s team of experts gathered information from each lender’s website, customer service, and email support. Each data point was checked to make sure it was up to date.

How much does a 550 credit point loan cost?

A number of factors can influence the cost of a personal loan, including your interest rate, APR, fees, loan term, and your credit rating. Here is an example of how some of these factors can affect the cost of a personal loan.

Imagine taking out a personal loan of $ 5,000 for three years. You have good credit and benefit from a low interest rate of 11%. Your monthly payment would be $ 164 and your total interest charge would be $ 893. Now let’s look at the same loan amount and the same repayment term with a credit score of 550 which entitles you to an interest rate of 35%. Your monthly payment skyrockets to $ 226 and your total interest charge is $ 3,142.

In this example, a better credit score would save you $ 2,249 in interest charges over the life of the loan.

What are the advantages and disadvantages of 550 credit score loans?

Before you embark on a personal loan with poor credit, be sure to consider the pros and cons.

Advantages

  • Easy application – Usually you can apply for a personal loan online in minutes from the comfort of your own home. You won’t need to go to a bank and go through a lengthy application process.
  • Soft – You can use a personal loan to cover just about any expense. Whether you need cash to pay for an auto repair, a medical bill, or home renovation project, this can be a great option.
  • Quick financing – Many personal lenders offer quick financing so you don’t have to wait weeks or even months to collect the money you need. This is great news if you have an urgent expense that can’t wait.
  • Chance to improve credit – As long as you make your payments on time, a personal loan can improve your credit. A one-time payment history will build it slowly but surely and increase your score.

The inconvenients

  • High interest rates – You can be stuck with a high interest rate, which can cost you thousands of additional dollars over the life of your loan.
  • Expensive fees – Some lenders who offer 550 credit score loans charge a variety of expensive fees. These may include set-up fees, administration fees, late fees and insufficient funds fees.
  • May need warranty – Depending on the lender you choose, you may need to secure your loan against collateral like a savings account or other asset. If you fail to make your payments, the lender can seize the collateral.
  • No more debt – If you are already struggling with debt, a personal loan can make the problem worse. This is especially true if you are borrowing more than you can comfortably afford to repay.

If you decide that a personal loan is right for your needs, you can easily compare personal lender rates with Credible.

Alternatives to personal loans with bad credit

If you have bad credit, a personal loan is not your only option. Here are some alternatives that can help you reach your financial goals.

  • Work on building your credit. Unless you need a personal loan right away, it might be a good idea to build your credit before you apply for one. You do this by paying all of your bills on time and in full. Try to pay off existing debts to improve your credit utilization rate. You may also want to consider becoming an authorized user on a credit card.
  • Consider a secured loan. While secured loans as title loans and payday loans are available, they are hardly ever a good idea. They usually come with exorbitant interest rates and exorbitant fees. Plus, you need to secure them on an asset like your car or your paycheck. But a secured personal loan can be an option if you have an asset that you could use as collateral.
  • Apply with a co-signer. If you have a friend or family member with good credit, you can ask them to act as a co-signer. Their good credit could help you qualify for a loan at a lower interest rate. Just keep in mind that as a co-signer, they will be responsible for paying off the loan if you don’t.
  • Borrow from friends and family. You may be able to take out a loan from a relative, sibling, or anyone else you know or trust at a low interest rate. If you go this route, however, be sure to describe the terms in writing so everyone is on the same page.
  • Work with a credit counselor. Credit counseling can be a good choice if you want professional advice on how to improve your finances. They can help you budget and create a debt management plan.