When it comes to taking out a personal loan, the credit score you have is an important factor. Most lenders that offer personal loans prefer borrowers with good or excellent credit scores (690 or higher). However, some lenders may accept borrowers with poor credit (a score lower than 630). There is no universal minimum credit score to be approved for a personal loan, but most lenders that offer bad credit loans will require a score of at least 560.
Prequalification won't affect your credit score and can help you decide which personal loan fits your budget and credit needs. Lenders perceive consumers with higher credit scores as less risky, while those with low credit scores may be considered risky borrowers. You'll need to make sure you have the necessary credit score before you apply for a loan from a lender. Some lenders will only look at your credit score to determine if they will give you a loan or not.
If your credit score is lower than 560, you may only be able to apply for quick loans that you should avoid if possible. The minimum credit score for a personal loan is usually 600, although each lender has different eligibility requirements. Borrowers with good credit scores of 670 or higher are more likely to qualify for a loan, while those with poor or fair credit may not qualify for a personal loan at all. If you don't qualify for a personal loan, there are other options available. You could take advantage of the equity in your home, charge the amount to a credit card, or borrow from a friend or family member.
These rates can be quite expensive over time, so consider the total cost of your loan before signing it. Remember, whatever your credit score, look for the loan that is most affordable for you. When you apply for a personal loan, you'll need to submit personal information, including your Social Security number and other relevant information. If you have a direct deposit at your main bank, they may be willing to give you a personal loan with bad credit. The time frame for financing online loans is usually one week or less, although some lenders will finance the loans the same business day or the next business day after approval.
These types of lenders offer both large and small personal loans and often offer competitive rates to borrowers who qualify. The typical minimum credit score to qualify for a personal loan is 560 to 660, according to lenders surveyed by NerdWallet. The collateral can be money deposited in a savings account, permanent home accessories, or a car, which the lender can keep if you don't pay the loan. If you use a personal loan for debt consolidation, you'll most likely qualify for a much lower rate compared to a credit card. Usually, you'll need a credit score of around 600 to qualify for most unsecured personal loans, and you'll need a score of 740 or higher to get the lowest rates.