There are many types of personal loans, each with their own minimum credit score requirements. Typically, you'll need a credit score in the mid-600s to qualify for most unsecured personal loans and require a score of 740 or above to get the lowest rates.
Our company receives compensation from partners seen on our website. Here's how we make money. Our research, news, ratings, and assessments are scrutinized using strict editorial integrity. Our editorial staff does not receive direction from advertisers on our website.
Qualifying for a personal loan isn’t always easy. After you submit your loan application, lenders will run a credit check to see if you’re a trustworthy borrower, and to determine what rates they will apply to your loan.
For most lenders, you will need a credit score of at least 620 to be approved, but there are some lenders who offer loans for those with lower scores.
On this page:
- What Credit Score Do You Need to Be Approved?
- How to Qualify for a Personal Loan
- Understanding Your Credit Score
- How Do You Apply for Personal Loans?
What Score Do You Need to Be Approved for a Personal Loan?
There is no universal minimum credit score to be approved for a personal loan. Most lenders offering bad credit loans, however, will require at least a 560 score. If your score is lower than that, you may only be eligible for payday loans which you should avoid if possible.
The following table shows the average personal loan rates that LendEDU users were offered by our partners based on their credit score.
|Credit Score||Average Rate (APR)|
|350 – 629||20.00%+|
|630 – 689||19.60%|
|690 – 719||13.64%|
|720 – 850||10.02%|
Here are some examples of popular lenders’ eligibility requirements and the interest rates they offer.
Personal Loans for Poor Credit
You can be approved for a personal loan or installment loan even if you have a very low credit score, but you’ll pay a high interest rate.
OneMain Financial personal loans, for example, don’t have a minimum credit score requirement for borrowers, but their loans have APRs between 17.59 and 35.99.
Just be aware that some lenders targeting consumers with bad credit have very high interest rates that can be quite expensive over time. Generally, we recommend avoiding any loans with APRs above 36%.
You can see some bad credit loan options here.
Personal Loans for Fair Credit
Once your score improves a bit, you have more options.
Marcus by Goldman Sachs, for example, indicates you’ll typically need a credit score of 660 or higher to be approved. Marcus personal loans have starting APRs as low as 6.99%.
You can see some personal loans for fair credit here.
Personal Loans for Good Credit
Finally, for borrowers with “strong” credit profiles, terms can be even better. LightStream makes loans of up to $100,000 available to borrowers at interest rates as low as 3.34%.
As you can see, there’s a big difference between what you’d pay as a strong borrower and what you’ll pay if your credit is considered poor.
You can see some personal loans for good credit here.
How to Qualify for a Personal Loan
To qualify for personal loans, borrowers will need a reasonable credit score, proof of income to show they can pay back the loan, and some other required documentation.
However, qualifying requirements, interest rates, and other loan terms vary dramatically from one lender to another. That’s because there are all kinds of personal loan lenders catering to different clients.
Anyone looking for a personal loan should try to improve their credit as much as possible, as higher credit scores open up the door to more loan offers and better rates.
>> Read more: How to Get a Loan With No Credit Check
Other Factors That Determine Approval
While credit is extremely important in determining if you’ll be approved for a loan, it’s not the only thing that matters. Lenders also look at some other financial characteristics, including:
- Your income: Lenders want to know you have a reliable source of income and so may require pay stubs or tax returns.
- Your other debt: Lenders usually calculate your debt-to-income ratio which is total debt divided by your total income. If it’s too high (usually above 30% or so), you may not be able to borrow—especially if you don’t have excellent credit.
- Collateral: If you qualify for a secured loan and pledge assets as collateral, you can get financing more easily and get a lower interest rate.
- Repayment history: Lenders will look carefully at your payment history on your credit report to assess the likelihood you’ll repay a loan.
Understanding Your Credit Score
You have lots of different credit scores, but the two most commonly used are your FICO and VantageScore. Both range from 300 to 850, with higher scores preferred to lower scores. Here’s how lenders typically view different scores:
- 300 to 559 (no credit or poor credit) – A credit score in this range indicates no or little credit or a damaged credit history potentially caused by bankruptcy or excessive defaults. Personal loans are available, but the terms of the loan are usually restrictive, and the interest rate is high.
- 580 to 669 (fair credit) – This range also shows a damaged credit history, often caused by loan defaults or an excessive number of late payments to multiple lenders. Usually, lenders recommend you repair your credit first, then apply for a loan. Loans are available, but you’ll pay a higher interest rate.
- 670 to 739 (good credit) – With a credit score in this range, you’re more likely to secure a personal loan with a decent interest rate.
- 740 to 799 (very good credit) – Credit scores considered very good can qualify you for favorable rates, and you’ll have your pick of lenders.
- 800 to 850 (excellent credit) – With excellent credit, you’ll get low interest rates, you’ll be eligible to borrow larger loan amounts, and you’ll be able to qualify for loans with even the most stringent qualifying requirements.
How Do You Apply for Personal Loans?
When you’ve shopped around among lenders and found the right one, you’re usually able to apply online and can often get a decision within minutes. However, some small local banks or credit unions may require you to visit a branch to apply for a loan.
When you apply for a personal loan, you’ll need to submit personal information, including your Social Security number and other relevant info. Lenders check your credit and either approve or deny your loan. They’ll also let you know the specific loan terms you’ve qualified for. Pay attention not only to the monthly payments, but also any fees you’ll have to pay and how long you’ll have to pay off the loan.
>> Learn More: How Do Personal Loans Work?
If your credit score is below the mid-600s, you’ll have few choices for personal loans and will pay a fortune in interest if you obtain financing.
But once your credit score hits around 740, you should qualify for the best personal loans with very low rates—provided you also have good income and can meet other lender requirements.
Just remember, whatever your credit score, shop around to find the loan that’s most affordable for you.
Author: Christy Rakoczy
Your Guide to Financial Freedom
Money tips, advice, and news once a week
Join the LendEDU newsletter!Thanks for submitting!Please Enter a valid email
Personal Loans Information
Personal Loan Reviews