How to Get a Personal Loan with Bad Credit in the U.S. – A Complete Guide (2025)
Having bad credit doesn’t mean you’re out of options when it comes to securing a personal loan.
In fact, many lenders in the U.S. specialize in helping individuals with low credit scores.
This guide will walk you through everything you need to know about getting a personal loan with bad credit in 2025.
What Is Considered a Bad Credit Score?
In the U.S., a credit score below 580 is typically considered “poor” by most lenders.
However, some lenders may still offer loans if your score is between 500–579, especially if you meet other criteria like stable income or employment.
Can You Get a Loan with Bad Credit?
Yes, it’s possible.
While traditional banks may deny your application, alternative lenders, credit unions, and peer-to-peer platforms can offer options tailored for borrowers with low credit scores.
Top 5 Tips to Get Approved for a Loan with Bad Credit
- Apply with a Co-Signer: Adding someone with good credit can drastically improve your chances.
- Provide Proof of Income: Pay stubs, W-2s, or bank statements can show lenders you’re financially stable.
- Consider Secured Loans: Use collateral like a car or savings account to reduce the lender’s risk.
- Limit Your Loan Amount: Borrow only what you truly need to increase approval odds.
- Compare Lenders: Use loan comparison sites like Credit Karma or NerdWallet to find the best rates.
Best Lenders for Bad Credit Loans in 2025
- Upstart: AI-driven lender focusing on education and employment history, not just credit score.
- LendingPoint: Ideal for borrowers with scores above 580.
- OneMain Financial: Offers both secured and unsecured loans for people with credit scores as low as 500.
What Interest Rates Can You Expect?
Rates vary based on your credit, loan term, and lender.
For bad credit borrowers in 2025, expect APR between 17%–35.99%.
Always read the fine print and calculate the total repayment amount before signing.
How to Improve Your Credit Before Applying
While it’s possible to get a loan with bad credit, improving your score can unlock better terms.
Here’s how:
- Pay all bills on time for the next 3–6 months.
- Reduce credit utilization below 30%.
- Dispute errors on your credit report via AnnualCreditReport.com.
- Keep old credit accounts open to build history.
Final Thoughts
Getting a personal loan with bad credit is challenging but not impossible.
With the right strategy, lender, and preparation, you can access funds and begin improving your financial health.
Always compare offers, read loan terms carefully, and borrow responsibly.
Disclaimer: This content is for informational purposes only and does not constitute financial advice.
Please consult with a licensed financial advisor for personalized guidance.
