Securing a personal loan with a credit score of 580 or lower can be challenging, but it's not impossible. Several lenders specialize in offering loans to individuals with poor credit. These loans can help cover unexpected expenses, consolidate debt, or finance major purchases. Here are four personal loans you can apply for if your credit score is 580 or lower, along with answers to five frequently asked questions.
Personal Loans To Apply To If Your Credit Score Is 580:
1. OneMain Financial
Overview: OneMain Financial is a reputable lender that offers both secured and unsecured personal loans to borrowers with poor credit. They assess your overall financial situation, not just your credit score.
Loan Details:
- Loan Amounts: $1,500 to $20,000
- APR: 18% to 35.99%
- Loan Terms: 24 to 60 months
- Fees: Origination fees (varies by state), late payment fees
Application Process:
- Prequalification: Check if you qualify without impacting your credit score.
- Application: Complete the online application form or visit a branch.
- Documentation: Provide proof of income, ID, and other financial documents.
- Approval & Funding: Receive funds as soon as the same day or within a few days.
Pros:
- Quick funding options
- Accepts poor credit scores
- Flexible loan terms
Cons:
- High APR
- Origination fees
2. Avant
Overview: Avant offers unsecured personal loans tailored for those with lower credit scores. They provide a streamlined online application process and fast funding.
Loan Details:
- Loan Amounts: $2,000 to $35,000
- APR: 9.95% to 35.99%
- Loan Terms: 24 to 60 months
- Fees: Administration fee up to 4.75%
Application Process:
- Prequalification: Soft credit check to see your eligibility.
- Application: Fill out the online application form.
- Verification: Submit required documents for income and identity verification.
- Approval & Funding: Funds available as soon as the next business day.
Pros:
- Prequalification with no impact on credit
- Quick funding
- No prepayment penalties
Cons:
- High APR for low credit scores
- Administration fees
3. Upgrade
Overview: Upgrade provides personal loans with an easy online application and fast funding. They also offer free credit monitoring, which can help you improve your credit score over time.
Loan Details:
- Loan Amounts: $1,000 to $50,000
- APR: 8.24% to 35.97%
- Loan Terms: 36 or 60 months
- Fees: Origination fee of 2.9% to 8%
Application Process:
- Prequalification: Check your rate without affecting your credit score.
- Application: Complete the online application form.
- Verification: Provide necessary documents for verification.
- Approval & Funding: Funds are typically available within a few business days.
Pros:
- Free credit monitoring
- Soft credit check for prequalification
- Fast funding
Cons:
- High origination fees
- Higher APR for lower credit scores
4. LendingPoint
Overview: LendingPoint offers personal loans to borrowers with credit scores as low as 580. They use a more holistic approach to evaluate your creditworthiness, considering factors like job history and income.
Loan Details:
- Loan Amounts: $2,000 to $36,500
- APR: 7.99% to 35.99%
- Loan Terms: 24 to 60 months
- Fees: Origination fee up to 6%
Application Process:
- Prequalification: Check if you prequalify without a hard credit pull.
- Application: Fill out the application form online.
- Verification: Submit necessary documents for income and identity verification.
- Approval & Funding: Receive funds as soon as the next business day.
Pros:
- Flexible qualification criteria
- Quick funding
- No prepayment penalties
Cons:
- High APR
- Origination fees
FAQs:
What is the minimum credit score required to apply for these loans?
Most of these lenders work with borrowers who have credit scores as low as 580. However, other factors such as income, employment history, and debt-to-income ratio are also considered.
How quickly can I get the funds?
The funding time varies by lender. OneMain Financial, Avant, Upgrade, and LendingPoint typically provide funds within one to two business days after approval.
Are there any fees associated with these loans?
Yes, these loans often come with fees such as origination fees, which can range from 2.9% to 8% of the loan amount. Additionally, there may be late fees if you miss a payment.
Can I prepay my loan without any penalties?
Most of these lenders do not charge prepayment penalties, allowing you to pay off your loan early without any extra costs. Avant, Upgrade, and LendingPoint specifically mention no prepayment penalties.
How can I improve my chances of getting approved?
To improve your chances of getting approved, ensure your application is complete and accurate, provide proof of stable income, reduce existing debt as much as possible, and consider applying with a co-signer if your credit score is very low.
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Conclusion
Securing a personal loan with a credit score of 580 or lower is possible, thanks to lenders like OneMain Financial, Avant, Upgrade, and LendingPoint. While these loans come with higher interest rates and fees, they provide a valuable financial resource for those in need. Always compare offers, read the terms and conditions carefully, and ensure you can manage the repayment schedule before committing to a loan.