How to get a personal loan with a 600 credit score

If you have a 600 credit score, getting approved for a personal loan can be tough if you don’t know which lenders to apply with. And you may pay a high interest rate. But many people are in the same boat – about 29% of Americans have a FICO credit score below 670, which means their credit is considered fair or bad.

Fortunately, several lenders work with borrowers who have fair credit. Plus, making on-time payments on a personal loan can improve your credit over time. We’ll help you find the best loan with a 600 credit score and cover what you can do to improve your chance of approval.

While personal loans are available from banks, credit unions, and online lenders, many banks will not offer you a loan with a 600 credit score. But some online lenders and credit unions will, depending on other qualification criteria, such as your income, current debt, and what you’ll use the loan for. For example, Upstart, an online lender, requires a minimum credit score of only 300. Other fair credit lenders that may offer 600 credit score loans include Avant, Universal Credit, and OneMain Financial.

To see which lenders you’re more likely to qualify with and the rate you might get, prequalify first. Many lenders let you prequalify on their websites, or you can prequalify with multiple lenders at once using an online platform (or any of the links in the table below). Prequalification is a quick process that won’t hurt your credit. It’s not an official offer of credit, but is based on a snapshot of your financial and credit situation. You’ll receive a formal offer once you apply (and if you qualify).

Note

Most lenders conduct a hard credit pull when you officially apply for a loan which could ding your score temporarily.

When deciding where to get a personal loan, consider whether you want to add a cosigner to your application or get a secured personal loan. Either option can make it easier to qualify if you have fair or bad credit, but not all lenders have these options. If you can’t prequalify on your own, pursuing either type of loan may be your next best step. For quick reference, here are some lenders that offer cosigned loans, secured loans, or both.

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Overview

Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it’s also is one of few lenders that doesn’t have a minimum credit score requirement (if you apply on the lender’s website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.

Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.

Time to get funds

As soon as 1 to 3 business days

Loan uses

Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes

Overview

Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don’t need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.

However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.

Loan amount

$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)

Loan uses

Credit card refinancing, debt consolidation, home improvement, major purchase, other

Overview

Best Egg is a solid lender for a wide range of borrowers and, notably, scored second for personal loan satisfaction in J.D. Power’s Consumer Lending Study. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You’ll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 9.99% with Best Egg.

Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners). 

Fees

Origination fee, late fee, unsuccessful payment fee, check processing fee

Eligibility

Available in all states except DC, IA, VT, and WV

Time to get funds

As soon as 1 to 3 business days after successful verification

Loan uses

Credit card refinancing, debt consolidation, home improvement, and other purposes

Overview

Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who’ve prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.

Fees

Origination fee, late fee, dishonored payment fee

Eligibility

Available in all states except HI, IA, MA, ME, NY, VT, and WV

Time to get funds

As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)

Loan uses

Debt consolidation, emergency expense, life event, home improvement, and other purposes

Overview

Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.

Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you’ve improved your credit score.

Eligibility

A U.S. citizen or permanent resident; not available in DC, IA, SC, WV

Time to get funds

As soon as 1 business day after acceptance

Loan uses

Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases

Overview

OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can’t, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.

Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn’t a given. 

Fees

Origination fee, unsuccessful payment fee, late fee

Eligibility

Must have photo I.D. issued by U.S. federal, state or local government

Time to get funds

As soon as 1 to 2 days after acceptance

Loan use

All except business, and education

Fox Business does not make or arrange loans.

A 600 credit score is considered fair credit on the FICO scoring model – the fair credit range falls between 580 and 669. People with a fair credit score are sometimes called “subprime” borrowers, and they often have negative marks on their credit report. Missed or late payments, high debt balances, and a short or limited credit history can all contribute to a low credit score.

Lenders view applicants with a 600 credit score as “high-risk” borrowers because their credit history indicates they have difficulty managing debt. For example, if you have late payments on your credit report, lenders may think you’ll struggle to make your personal loan payments on time. Lenders account for risk by charging a higher annual percentage rate (APR), which expresses the annual cost of the loan, including the interest rate and any upfront fees.

While the process varies by lender, you can generally expect the following when applying for a personal loan online:

1. Research lenders: Once you’ve narrowed down your options to lenders that offer personal loans for a 600 credit score, check customer reviews on Trustpilot and app ratings to evaluate the company’s reputation. Pay attention to the benefits each lender offers, like an autopay discount or the option to change your due date.
2. Prequalify: Using a personal loan comparison platform or each lender’s website, prequalify with a handful of lenders. Lenders may request your Social Security number for this step, but checking your rate won’t damage your credit. Bear in mind, your final rate could differ from your estimated rate, and prequalification doesn’t guarantee approval.
3. Choose a lender and apply: Compare loan quotes to find those with the best rates and terms, and a monthly payment you can afford. It may be better to have a lower monthly payment that you can afford versus the lowest APR available. Once you’ve made a decision, apply.
4. Upload documents: Submit any required documentation, such as proof of income, identity, and employment, via the lender’s online portal. You may also have to approve a hard credit check at this point, which may lower your score temporarily.
5. Sign your loan documents: If you’re approved, make sure the final loan offer works for your needs. Read the fine print so you understand the terms and repayment process, and then sign the loan documents to initiate the transfer of funds.

The average personal loan interest rate for a borrower with a 600 credit score varies depending on the loan repayment term. Below are average prequalified personal loan rates for borrowers in two different credit score ranges near 600 based on July 2024 interest rate data from the Credible loan marketplace.

Note that your individual rate may vary depending on other factors, such as your income, the loan amount, the lender you choose, and whether you get a secured loan or add a cosigner.

Your credit score not only impacts the cost of borrowing, but also how much of a personal loan you can get. Lenders will also consider factors like your debt-to-income ratio, which is the share of your monthly income that you spend making minimum payments on your existing debts. If you already have a lot of debt and earn a low income, lenders may worry about your ability to repay and offer less cash than you need.

While some lenders that offer personal loans for fair credit issue loans of up to $50,000 or more, you may not be approved for that amount with a 600 credit score. Because multiple factors influence loan limits besides your credit score, the best way to find out how much money you can get is to prequalify with a handful of lenders. Prequalification allows you to get a rate estimate and see your loan amount and term options without hurting your credit score.

PAL I and PAL II loans are small-dollar loans offered by most credit unions designed for borrowers with fair and bad credit who might otherwise seek a payday loan. You can borrow up to $2,000, depending on which PAL is available, with a maximum interest rate of 28%, and there may be no credit check. Depending on the loan type, you could have up to six or 12 months for repayment. You’ll need to be a member of a credit union to qualify, but there’s no waiting period for PAL II loans, so you can apply the same day you sign up for membership.

Cash advance apps allow you to access a portion of your earned income ahead of payday. Available amounts top out around $700, but you may be approved for a smaller advance or not at all, depending on the app and your banking information. The advance is automatically repaid from your next paycheck, but there’s typically no credit check or risk of damage to your credit. Some apps charge membership or transaction fees, while others only ask for optional tips, so compare your options carefully. If you need money fast, you’ll typically pay a high fee for instant transfers.

In some states, a few lenders offer installment loans that you can qualify for with only a soft credit check. These loans tend to have higher interest rates than traditional personal loans, and may also come with lower borrowing limits. However, they’re preferable to payday loans, which can trap borrowers in debt due to high rates and short repayment terms. 60MonthLoans is one option to consider.

If you have a 401(k) account and your plan sponsor allows loans, you could borrow from your retirement account without a credit check. You’ll need to repay the loan with interest to avoid a tax penalty, but the interest you pay will be added to your account balance. You can typically borrow up to half your vested balance or $50,000, whichever is less.

Some plans allow you to borrow up to your entire balance if you have less than $10,000 in your account. You’ll typically have up to five years for repayment, but if you leave your job, the entire balance could be due at once. You should avoid this loan type if you plan to change jobs in the near future. Additionally, borrowing from your 401(k) should be a last resort so you don’t deplete future retirement funds.

Warning

If you can’t repay a 401(k) loan, it could be treated as a withdrawal which means you’d pay income tax on the unpaid amount, plus could owe a 10% penalty tax if you were under 59 ½ when you took out the loan.

Improving your credit can help you access better borrowing options in the future. If you pay your bills on time, work to reduce debt, and avoid closing old credit cards or applying for new credit too often, you’ll see your score improve over time. You can also use a tool like Experian Boost to potentially get a small but immediate credit score increase, as long as you’ve been responsible with your rent and utility bills.

Applying for a personal loan typically requires a hard credit check, which will cause a small, temporary decrease in your credit score. However, most personal loan lenders also report your payment activity to the three major credit bureaus, so making on-time payments on a personal loan can improve your credit over time. If a personal loan helps you to pay off high-interest debt faster or avoid collections, it may prevent a future decrease in your score and could provide a quick boost by reducing your credit utilizatio ratio.

Excellent credit borrowers have access to the lowest personal loan rates, but fair credit borrowers can improve their chances of getting a low rate by comparing loan options across lenders, securing the loan with collateral like a car or house, or applying with a cosigner or with a co-borrower.

A personal loan term length specifies the number of months or years you’ll have to repay the loan with interest. Most lenders have loan terms ranging from two to seven years depending on loan type. Choose a loan term that comes with a monthly payment you can afford. Most lenders don’t charge prepayment penalties, so you can repay the loan before the end of the term to save money on interest.

Most personal loan lenders fund loans within a week after you sign your loan documents, and some online lenders offer same-day or next-day funding. The exact processing time depends on the lender and where you bank.

Meet the contributor:

Lindsay Frankel

Lindsay Frankel has been covering personal finance for six years, with particular expertise in loans, insurance, and real estate. She’s written hundreds of articles across a range of well-known outlets, including LendingTree, Investopedia, SFGate, and more. Outside of writing, she enjoys playing music and exploring nature with her rescue dog, Lucy.

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