How do I get a personal loan with bad credit?

You can qualify for a personal loan with bad credit by targeting lenders that accept lower scores (typically 580 or below), reducing your debt-to-income ratio, adding a co-signer, or applying for a secured loan. Rates will be higher — comparing multiple offers before accepting any is critical.

Bad credit doesn't automatically disqualify you from a personal loan, but it narrows your options and raises the cost. The CFPB defines personal loans as installment products where lenders set their own approval criteria — meaning there is no federal floor, and individual lenders vary widely in what scores they accept. Understanding what lenders actually evaluate — and how to strengthen your application — is the practical path forward.

What lenders look at beyond your score

Credit score is one signal, not the whole file. Lenders also weigh your income stability, employment history, existing monthly debt obligations (your debt-to-income ratio), and whether the loan is secured or unsecured. A borrower with a 580 score, low existing debt, and steady income may get a better offer than a borrower with a 600 score who already carries heavy payment obligations.

Strategies that can improve your odds

Apply at credit unions. Credit unions often use more flexible underwriting than large banks and may work with members who have imperfect credit. Membership is typically required first.
Add a creditworthy co-signer. A co-signer with strong credit reduces the lender's risk — which can improve both approval odds and your rate. The co-signer is equally responsible for the debt if you don't pay.
Choose a secured personal loan. Secured loans — backed by collateral like a savings account or CD — present less risk to lenders, which often makes approval easier at lower scores.
Lower your DTI before applying. Paying down revolving balances before submitting your application can meaningfully improve your debt-to-income ratio.
Pre-qualify before applying. Many lenders offer a soft-pull pre-qualification that shows estimated terms without affecting your credit score — use it to compare before choosing where to formally apply.

What to watch out for

Borrowers with bad credit are prime targets for predatory lenders and outright scams. The FTC warns that legitimate lenders do not guarantee approval before reviewing your application, do not require upfront fees before disbursing funds, and do not pressure you to act immediately. Any lender asking for a fee to 'unlock' your loan or 'secure' your rate before issuing funds is a red flag. Report suspected advance-fee loan scams to the FTC at ReportFraud.ftc.gov.

What regulators say

Lenders must give you a Truth in Lending Act (TILA) disclosure showing the APR, total finance charge, and total repayment amount before you're obligated to accept the loan. — CFPB
The FTC advises consumers that legitimate lenders never guarantee a loan before reviewing your application or require an upfront payment to release loan funds. — FTC Consumer Advice
Your debt-to-income ratio — total monthly debt payments divided by gross monthly income — is a key factor lenders use alongside credit score to assess repayment ability. — CFPB

Key takeaways

Bad credit limits options but doesn't eliminate them — credit unions, secured loans, and co-signers can all improve your odds.
Lenders weigh income, DTI, and employment stability alongside your score — a strong financial profile can offset a lower score.
Pre-qualify with multiple lenders using soft pulls before submitting a formal application.
Any lender demanding an upfront fee to release your funds is a scam — report it to the FTC.
Review your TILA disclosure carefully: it shows your true all-in cost before you're committed.