What Credit Score Do You Need for a Personal Loan? - NerdWallet (2024)

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Credit score requirements for personal loans vary across lenders. Many give preference to borrowers with good or excellent credit scores (690 and above), but some lenders accept borrowers with bad credit (a score below 630).

The typical minimum credit score to qualify for a personal loan is 560 to 660, according to lenders surveyed by NerdWallet. Some lenders may require a higher score.

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A high credit score doesn’t guarantee you’ll qualify or get a low interest rate. Qualifying rests largely on your creditworthiness, which is usually a combination of your credit history and score, in addition to income and debt. Use this calculator to learn what loan options you may have based on your credit score.

» MORE: Compare the best personal loans

What you need to qualify for a personal loan

Just because you meet a lender’s minimum credit score requirement doesn’t mean you’ll qualify for a loan.

Lenders have a range of criteria they consider on an application. Some look at alternative data, like where you went to college and what field you work in. Others look mostly at your credit report and history, along with your income and debts.

» MORE: Requirements for a personal loan

Here’s what most lenders look at on a personal loan application:

  • Credit score: Many lenders look at the FICO credit scoring model, but some use VantageScore. Other lenders say they use many data points to determine approval, which may include a FICO or VantageScore.

  • Credit history: Lenders like to see a long credit history on a loan application. A lender may say it requires a minimum of two or three years of credit history, but longer is typically better. More accounts throughout your credit history shows a lender how diligently you’ve made payments. Borrowers with multiple credit cards, a mortgage, or an auto loan showing regular on-time payments may be more likely to qualify.

  • Debt-to-income ratio: Lenders seek borrowers who make enough money to meet their current monthly financial obligations, plus loan payments. Many use your debt-to-income ratio to see whether another loan would overextend your finances.

  • Free cash flow: Your debt-to-income ratio doesn’t account for expenses like gas, groceries and rent, so some lenders look at bank account transactions to see how much money borrowers have left after other expenses. Lenders call this “free cash flow,” and the more of it you have, the more confident a lender may feel approving your application.

» MORE: Boost your chances of getting a loan

Personal loans for fair or bad credit

Though lenders consider multiple factors on a loan application, your credit score is often given a lot of weight.

Borrowers with fair or bad credit often qualify for high rates, which can be up to 36%. A low credit score could also be the reason a lender approves you for a small loan amount.

Lenders that offer fair-credit loans may look beyond your credit score to make a loan decision. Credit unions, for example, look at a member’s standing with the credit union and other factors on an application.

Tips to build your credit

If you have time to build your credit before applying, you may improve your chance of qualifying for a personal loan at a low rate. Your credit score won't go from poor to good overnight, but the following tips can help.

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1. Make payments on time

Credit card and loan payments that are more than 30 days past due can cause your credit score to drop by up to 100 points. Consider setting up automatic payments or due date reminders to ensure you won’t miss payments on your current debts. If the payment date doesn’t work with your budget, ask your creditors to change it.

2. Dispute credit reporting errors

Review your credit reports from each of the three credit bureaus – Equifax, Experian and TransUnion – to see if there are any errors, like incorrect account balances or accounts you don’t recognize that may be dragging your score down. Dispute any mistakes online, by mail or by phone. You can get weekly credit reports for free at AnnualCreditReport.com.

3. Decrease your credit utilization

Your credit utilization ratio is the percentage of your available revolving credit that you’ve spent. Try to keep this number below 30%. If it's higher, take time to pay down your credit card balances and other credit lines. Asking for a credit limit increase can also lower your credit utilization.

» MORE: How does a personal loan affect your credit score

How to compare personal loans

Check annual percentage rates. The APR is the total cost of the loan, including interest and fees. APR provides an apples-to-apples cost comparison across personal loans and other financing options.

Pre-qualify for multiple loans. Many lenders let you pre-qualify to preview your potential rate and monthly payments before applying for a loan. Pre-qualifying won’t affect your credit score and can help you decide which personal loan fits your budget and borrowing needs.

Consider other loan types. Adding a co-borrower or collateral to your application may help you qualify or get a lower rate, but not all lenders offer co-signed, joint or secured loans. Most lenders only advertise unsecured loans, but may include information about other loan types in their website’s FAQ or blog section.

» MORE: Best secured personal loans

Weigh other features. Lenders may include perks like auto-pay discounts or hardship assistance programs. If you have two affordable loan offers, compare other features that may be helpful for your plans.

What Credit Score Do You Need for a Personal Loan? - NerdWallet (2024)

FAQs

What Credit Score Do You Need for a Personal Loan? - NerdWallet? ›

The typical minimum credit score to qualify for a personal loan is 560 to 660, according to lenders surveyed by NerdWallet. Some lenders may require a higher score. A high credit score doesn't guarantee you'll qualify or get a low interest rate.

What is the credit score needed for a personal loan? ›

To qualify for a personal loan, borrowers generally need a minimum credit score of 610 to 640. However, your chances of getting a loan with a low interest rate are much higher if you have a “good” or “excellent” credit score of 670 and above.

What credit score does NerdWallet use? ›

How does NerdWallet get my free credit report and score? NerdWallet partners with TransUnion® to provide your TransUnion® credit report. Using the data in your credit report, it also provides your VantageScore® 3.0 credit score. Your score and credit report information are updated weekly.

What credit score is needed for a $35000 personal loan? ›

What credit score do you need for a $35,000 loan? Some personal loan lenders require good or excellent credit with a minimum score requirement of 660. However, other lenders work with borrowers who have fair or poor credit.

What credit score do you need to get a $20,000 loan? ›

Requirements for a $20,000 Personal Loan

This means they'll want to see your credit score, income level and DTI ratio. Requirements vary by lender, but most lenders require borrowers to have a credit score in the good to excellent range — meaning a score of at least 670.

Can I get a personal loan if I have a bad credit score? ›

This is a valid concern, but you shouldn't let it stop you from applying altogether. Having a bad credit score can indeed reduce your chances of getting a personal loan. However, it's not impossible. Several lenders will consider applications with less-than-perfect credit scores.

How big of a personal loan can I get with a 720 credit score? ›

Personal loan averages by credit score
Credit score rangeAverage APRAverage loan amount
720+14.34%$19,657.52
680-71921.19%$16,032.83
660-67932.30%$12,392.46
640-65944.50%$10,010.65
4 more rows

Is NerdWallet safe for loans? ›

Yes, NerdWallet is safe. NerdWallet supports multi-factor authentication (MFA) in addition to other industry-standard security controls. It encrypts your financial data (128-bit encryption) for enhanced safety.

Does NerdWallet do a hard credit check? ›

Checking your credit score on NerdWallet only prompts a soft inquiry on your credit report - not a hard inquiry - and will never impact your score in any way, no matter how often you check it. This article includes more detail about this: Does Checking My Credit Score Lower It?

How can I raise my credit score 100 points in 30 days? ›

For most people, increasing a credit score by 100 points in a month isn't going to happen. But if you pay your bills on time, eliminate your consumer debt, don't run large balances on your cards and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.

What is the easiest loan to get approved for? ›

The easiest types of loans to get approved for don't require a credit check and include payday loans, car title loans and pawnshop loans — but they're also highly predatory due to outrageously high interest rates and fees.

What credit score is needed for $5,000 loan? ›

Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.

How much can I borrow with a 630 credit score? ›

You can borrow anywhere from a few thousand dollars to $100,000+ with a 630 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.

What is the minimum credit score for LendingTree? ›

You can check your credit score for free with LendingTree Spring — without impacting your credit. While credit scores range from 300 to 850, the minimum credit score for a personal loan is typically 580. However, borrowers with scores of 640 or higher tend to get better loan rates and terms.

What is the monthly payment on a $20 000 loan? ›

Advertising Disclosures
Loan AmountLoan Term (Years)Estimated Fixed Monthly Payment*
$20,0005$415.07
$25,0003$771.81
$25,0005$514.57
$30,0003$926.18
13 more rows

How much is a $20000 loan for 5 years? ›

A $20,000 loan at 5% for 60 months (5 years) will cost you a total of $22,645.48, whereas the same loan at 3% will cost you $21,562.43. That's a savings of $1,083.05. That same wise shopper will look not only at the interest rate but also the length of the loan.

Can I get a personal loan with a 600 credit score? ›

You aren't likely to get a lender's best rates on a personal loan without a good credit score, but a FICO score of 600 should allow you to qualify for one.

What credit score do I need for a $10000 personal loan? ›

To increase your chance of qualifying for a $10,000 unsecured loan, you should have a credit score of 600 or higher. Some lenders start their minimum credit score requirements at 600, however, there are some lenders that require a credit score in the high 600s or low 700s.

What credit score do I need for a $5000 loan? ›

Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.

What credit score is needed for a 30000 loan? ›

You will need a credit score of 580 or higher to get a $30,000 personal loan in most cases, along with enough income to afford the monthly bill payments. Other common loan requirements include being at least 18 years old, being a U.S. citizen or a permanent resident, and having a valid bank account.

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