Generally speaking, you’ll have the best chance at a personal loan with a good rate and low fees (or no fees) if you have a credit score that’s considered “good,” or a score of 670 or higher. If you have a “very good” credit score (740 to 799), or an “exceptional” score (800+), your chances of getting a personal loan are even better. The good news is that you may be able to get one of the best personal loans for excellent credit, the best personal loans for fair credit, or another personal loan that is right for you and your credit score. All you need to do is shop around.

What Credit Score Is Required to Get a Personal Loan?

Credit score requirements for personal loans can vary dramatically by loan company, especially since some lenders focus solely on good-credit borrowers, while others are much more lenient. That said, consumers with a low or fair credit score will typically pay much higher interest rates and loan fees, while those with good or excellent credit have a better chance of qualifying for personal loans with the best rates and terms.

While you can get a personal loan with a low credit score, most lenders require borrowers to have at least good credit to get approved, or a FICO Score of 670 or higher.

The chart below shows how your credit score impacts your ability to get a personal loan at every level, and what you may find when you apply.

FICO Score Range	Personal Loan Impact
Poor Credit (FICO Score Below 580)	Qualifying for a personal loan may be challenging, although some lenders offer bad-credit loans. If you’re approved, you’ll likely pay higher fees (including origination fees) and a sky-high interest rate.
Fair Credit (FICO Score of 580 to 669)	Borrowers with fair credit can qualify for personal loans, but typically with higher fees, higher interest rates, and lower loan amounts.
Good Credit (FICO Score of 670 to 739)	Good-credit borrowers have a better shot at personal loans with the best rates and terms, in addition to higher loan amounts.
Very Good Credit (FICO Score of 740 to 799)	Loan applicants with very good credit can often qualify for high loan amounts as well as loans with no origination fees.
Exceptional Credit (FICO Score of 800+)	Applicants with exceptional credit can typically have their pick of personal loans, including options with the lowest possible rates, no origination fees, and high loan amounts.

How Does a Personal Loan Work?

Personal loans give you a lump sum of money upfront, and they are typically unsecured and require no collateral. Once you receive the loan funds in your bank account, you can spend the money however you see fit.

While loan terms vary across providers, many of the best lenders let you borrow up to $50,000 with a personal loan with flexible repayment terms. For example, you may be able to pay back the debt over anywhere from 24 to 120 months, depending on the lender and loan amount.

Note that, in addition to the interest charged on personal loans, many charge origination fees up to a certain percentage of the loan amount. These fees are most common for personal loans for bad credit.

Factors That Affect Your Credit Score

Understanding the factors that impact your FICO Score can help you determine the steps you need to take to improve it over time. Consider the following aspects of your credit that might need some work:

• Payment history (35%): This factor considers whether you pay your bills on time each month.
• Amount owed (30%): Also known as your credit utilization ratio, this factor considers how much debt you owe in relation to your credit limits.
• Length of credit history (15%): This factor considers the average length of your credit history across all open accounts.
• Credit mix (10%): This factor considers the different types of credit you might have, including revolving credit accounts, installment loans, and more.
• New credit (10%): This factor rates how much new credit you have applied for in the recent past.

Note that, by improving your credit score, you stand a better chance of qualifying for the best possible rates and terms. With that in mind, it can pay off in the long run to spend time improving your score before applying for a personal loan.

What Are Other Requirements to Get a Personal Loan?

There are requirements for personal loans that extend far beyond the credit score you have. These include but are not limited to the following:

• Debt-to-income (DTI) ratio: Loan companies will look at your debt-to-income (DTI) ratio, or how much you owe in regular, recurring bills in relation to how much you earn. This can include revolving credit like credit cards, in addition to installment loans such as auto loans, student loans, or mortgages. Monthly costs like utilities are not included.
• Loan terms: Lenders also consider the loan terms you’re asking for when you apply, including the amount you want to borrow, the repayment terms, and your anticipated monthly payment.
• Income: Having a steady stream of predictable income dramatically increases your chances of qualifying for a personal loan.

How to Compare Personal Loans

To find the best personal loans available today, you should look at banks, credit unions, and online lenders. Many online loan companies offer preferential rates and terms to eligible applicants, and they make it easy to apply for a loan and get funding from the comfort of your home.

Here are the personal loan factors you’ll want to consider and compare:

• Interest rates: Interest rates can vary dramatically across different lenders. If you want to find out the rate that you may need to pay, look for lenders that let you “check your rate” and gauge your approval odds without a hard inquiry on your credit reports.
• Loan amounts: Make sure you look at lenders that offer the loan amount you need, or at least a range of amounts that could work for you.
• Loan fees: Beyond interest rates, you’ll also want to look at the kinds of fees that might come with a loan, including origination fees.
• Repayment terms: Make sure that the lender you’re considering offers a repayment term that works for you, keeping in mind that the loan term will determine your monthly payment.
• Total interest charges: Finally, use a personal loan calculator to determine the total costs of each loan you’re considering.

Personal Loans for Bad Credit: Pros and Cons

As previously mentioned, it’s possible to get a bad-credit loan, but you’ll pay more for these loans over time. Consider the pros and cons of personal loans for bad credit before you apply.

How Do People Use Personal Loans?

venuscurves.commissioned a national survey of 962 U.S. adults between Aug. 14, 2023, to Sept. 15, 2023, who had taken out a personal loan to learn how they used their loan proceeds and how they might use future personal loans. Debt consolidation was the most common reason people borrowed money, followed by home improvement and other large expenditures.

The Bottom Line

You can get a personal loan with nearly any credit score, but you’ll pay more in interest and fees if your score is on the lower end. If you can afford to wait, it might be wise to improve your credit score into the “good credit” range before applying for a loan.