How to Get a Personal Loan with Bad Credit

Having a low credit score can make borrowing challenging, but it’s not impossible. In this guide, we’ll cover strategies to improve your approval odds, lenders who specialize in subprime loans, and alternatives when traditional loans aren’t an option.

Table of Contents

• 1. Understand Your Credit Profile
• 2. Consider Secured or Co-signed Loans
• 3. Specialty Lenders & Online Platforms
• 4. Use Alternatives Like Credit Unions
• 5. Build Credit While Borrowing
• 6. Avoid Predatory Lenders

1. Understand Your Credit Profile

Obtain your free credit report and score. Identify items dragging your score down—high utilization, late payments—and address any errors before applying.

2. Consider Secured or Co-signed Loans

Secured loans backed by collateral (e.g., savings account) or co-signers with stronger credit can unlock better rates and approval odds.

3. Specialty Lenders & Online Platforms

Some lenders focus on subprime borrowers. Prequalify with platforms like Upstart and LendingClub to see if you qualify without a hard inquiry.

4. Use Alternatives Like Credit Unions

Local credit unions often have more flexible underwriting and may offer small-dollar or starter loans designed for rebuilding credit.

5. Build Credit While Borrowing

Choose loans with on-time auto-pay, and pay more than the minimum to demonstrate responsible repayment, boosting your score over time.

6. Avoid Predatory Lenders

Steer clear of payday loans and high-fee installment loans. Always compare APRs and total repayment costs to protect against debt traps.

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Conclusion

Getting a loan with bad credit requires careful planning: understand your report, leverage secured or co-signed options, and choose reputable subprime-friendly lenders. With the right approach, you can access financing and rebuild your credit simultaneously.