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How to Get a Personal Loan with Bad Credit

Fredrek Mostapha

 

How to Get a Personal Loan with Bad Credit (2026)

Having bad credit can make it challenging to get a personal loan, but it is not impossible. In 2026, many lenders in the USA specialize in helping borrowers with low or poor credit scores. This guide will show you how to increase your chances of approval and find the best loans for your situation.

What Does “Bad Credit” Mean?

Bad credit typically refers to a FICO score below 580. Common reasons include:

  • Missed or late payments
  • High credit utilization
  • Accounts in collections
  • Limited credit history

Can You Get a Personal Loan with Bad Credit?

Yes! Lenders that specialize in bad credit loans often:

  • Offer higher interest rates due to risk
  • Provide smaller loan amounts at first
  • Require proof of income or a co-signer

Steps to Get Approved for a Personal Loan with Bad Credit

1. Check Your Credit Report

Before applying, review your credit report to correct any errors and understand what affects your score.

2. Research Lenders That Accept Bad Credit

Look for:

  • Online lenders specializing in bad credit
  • Credit unions with flexible policies
  • Peer-to-peer lenders

3. Consider a Co-Signer

A co-signer with good credit can significantly improve your approval chances and reduce interest rates.

4. Apply for a Secured Personal Loan

Secured loans require collateral, such as a car or savings account, which lowers the risk for the lender.

5. Provide Proof of Income

Lenders want assurance that you can repay. Submit pay stubs, bank statements, or tax returns.

6. Borrow Responsibly

Request only the amount you need and can repay comfortably to avoid further credit damage.

Top Personal Loan Options for Bad Credit (2026)

1. Avant Personal Loans

  • Loan amounts: $1,000–$40,000
  • APR: 9.95%–35.99%
  • Lower credit score requirement

2. Upgrade Personal Loans

  • Loan amounts: $1,000–$50,000
  • APR: 7.74%–35.99%
  • Flexible repayment options

3. OneMain Financial

  • Loan amounts: $1,500–$20,000
  • APR: 18%–35.99%
  • Available at physical branches and online

4. Peer-to-Peer Lenders (e.g., Prosper)

  • Loan amounts: $2,000–$50,000
  • APR: 8.99%–35.99%
  • Flexible co-applicant options

Tips to Improve Approval Odds

  • Maintain steady employment and income
  • Reduce existing debt before applying
  • Consider prequalification to check rates without affecting credit
  • Use a small, secured loan first to rebuild credit

Common Mistakes to Avoid

  • Applying to multiple lenders at once
  • Borrowing more than you can repay
  • Ignoring fees and high APRs
  • Missing payment deadlines

Frequently Asked Questions (FAQs)

Can I get a loan with a score below 500?

Yes, but expect higher interest rates and smaller loan amounts. Secured loans or co-signers improve chances.

How fast can I get funded?

Many online lenders fund loans within 1–3 business days after approval.

Will a bad credit loan help my score?

Yes, if you make all payments on time, it can improve your credit over time.

Final Thoughts

Getting a personal loan with bad credit in the USA is possible in 2026. By choosing the right lender, providing proof of income, and borrowing responsibly, you can access financial support and start rebuilding your credit effectively.