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.

Where can I get a personal loan with a 600 credit score?

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).

Add a cosigner or get a secured loan

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.

Personal loans for a 600 credit score

What is a 600 credit score?

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.

How to apply for a 600 credit score loan

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.

Average personal loan rates with a 600 credit score

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.

How much of a personal loan can I get with fair credit?

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.

Personal loan alternatives

Payday alternative loan (PAL)

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 app

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.

No-credit-check installment loan

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.

401(k) loan

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.

FAQ

How to improve your credit score

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.

How does a personal loan affect your credit score?

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.

How to get a low-interest personal loan

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.

What is a personal loan term length?

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.

How long does it take to get a personal loan?

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.