What Credit Score Is Needed for a Personal Loan?
- The credit score needed for a personal loan varies by lender. Many approve borrowers with scores as low as 580, while some have no minimum requirement at all. The best loan terms often require a score of 800 or higher.
- You can improve your approval odds and lower your rates by making on-time payments, keeping credit utilization low and limiting new credit applications.
- Lenders also look beyond credit scores at details like credit history, debt-to-income ratio, income, loan amount and collateral.
- If your credit score needs work, consider working to improve your credit score before applying or explore loan options for fair or bad credit.
Before you apply for a personal loan, it’s smart to review basic lender requirements and know how your credit score measures up. There’s no single universal minimum credit score for approval, but your creditworthiness does have a strong influence on your chances of qualifying, as well as the rates, terms and loan amounts that lenders offer you.
If you’re wondering what credit score is needed for a personal loan, the answer ultimately depends on the lender. Still, understanding how your credit score impacts approval decisions and borrowing costs will help you better prepare to compare offers from lenders and choose the best one for you.
What is the minimum credit score requirement for getting a personal loan?
There’s no such thing as a universal minimum credit score for personal loans. Every lender sets its own borrowing standards, and those standards often vary based on loan type.
Many lenders start approving borrowers with fair credit at a credit score of about 580, though their interest rates will typically be higher. Borrowers with credit scores of 740 or higher — but especially those above 800 — tend to qualify for the best rates, based on LendingTree user loan data.
Further, some lenders don’t publish their minimum credit score requirements at all. Prequalifying for a personal loan with multiple lenders can help you compare borrowing options without hurting your credit score.
Here’s a quick guide to help you navigate typical lender expectations.
- It’s hardest to qualify for a personal loan with bad credit (under 580 credit score), but it’s possible. Interest rates will generally be highest.
- Fair credit (580-669) may qualify for a personal loan, but at higher rates.
- Good credit (670-739) usually unlocks lower APRs and larger loan amounts.
- Excellent credit (800+) or very good credit (740-799) often qualifies for the most competitive rates and fees.
- Secured loans may offer more lenient minimum credit score criteria since your collateral helps reduce the lender’s risk.
How your credit score affects personal loan approval and rates
Your credit score can affect your approval odds, APR, fees and the loan amounts that lenders offer when you apply for a personal loan. Check out the credit scoring ranges below for help setting expectations and planning your next steps as you compare financing options.
| Credit range | What to expect | Recommended next steps |
|---|---|---|
| Excellent (800 and above) | Best approval odds, lowest APRs, largest loan amounts | Compare multiple personal loan offers for excellent credit to secure the best rate. |
| Very good (740-799) | Strong approval odds, competitive rates and terms | Shop around with multiple lenders for the best offer. Pay attention to APRs and fees. |
| Good (670-739) | Multiple approvals with moderate rates and fees | Compare offers carefully. Consider good-credit personal loan options. |
| Fair (580-669) | Possible approvals at higher APRs and with smaller loan amounts | Consider fair-credit lenders or a secured loan. Build credit score with good habits. |
| Poor (under 580) | Tougher approval odds, and pricing can be steep | Review bad-credit loan options or work to improve your credit score before applying. |
Personal loan averages by credit score
Average interest rates and loan amounts tend to shift as credit scores go up — you can learn more about current personal loan trends in this recent LendingTree report. But in general, applicants with stronger credit profiles qualify for lower APRs and higher borrowing amounts while riskier credit profiles tend to pay more and receive smaller loan offers.
| Credit tier | Average APR |
|---|---|
| Excellent (800 and above) | 11.66% |
| Very good (740-799) | 14.35% |
| Good (670-739) | 22.83% |
| Fair (580-669) | 30.22% |
| Poor (under 580) | 32.09% |
Other factors lenders consider beyond credit score
Your credit score is important when you apply for financing, but it’s not the only variable that matters. Lenders also review other factors when you seek a personal loan.
Income
Lenders verify income to confirm you can handle the payment on a new personal loan. You may need to provide recent pay stubs, W-2 forms, 1099s or tax returns (especially if you’re self-employed). If you have a higher stable income, you may qualify for larger loan amounts or lower rates.
Debt-to-income-ratio (DTI)
It’s wise to check your debt-to-income ratio (also known as DTI) before you apply for a personal loan. Many lenders look for applicants to have a DTI ratio no higher than 36% to 43%, though requirements often vary by lender. A lower DTI ratio indicates you have more capacity to take on new debt, and it may help you qualify for a larger loan amount or a better interest rate.
Collateral (if applicable)
If your credit score is on the lower side, applying for a secured personal loan might increase your odds of approval. Pledging collateral (like savings, a CD or other assets) to back your loan can reduce risk for the lender. Secured loans sometimes allow for lower credit scores or help you lock in lower APRs, but you risk losing your collateral if you fail to repay the debt according to the terms of your loan agreement.
Joint applicants
Applying for a personal loan with a joint applicant or cosigner who has stronger credit or income may boost your approval odds or improve your borrowing costs. But, be aware that both you and your co-borrower will share the responsibility for on-time repayment. So it’s important to set clear expectations and create a budget and payoff plan you can follow consistently.
Loan amount or repayment term
Larger loans and longer repayment terms increase risk for the lender. By contrast, shorter terms lower the amount of total interest you’ll pay but can increase the amount of your monthly payment. Aim to match the term to your budget and payoff goals, then make consistent, on-time payments to protect your score.
Frequently asked questions
LendingTree is a loan marketplace, so individual loan credit requirements will vary by lender. Many lenders consider fair-credit applicants, while others focus on prime-credit borrowers.
You can check loan offers without a hard credit pull, so there’s no risk to your score to explore your borrowing options on LendingTree.
If you’d like to see what the process is like in real life, read a LendingTree writer’s own experience shopping for loans with 15 different lenders and marketplaces — including LendingTree itself.
A formal loan application usually includes a hard credit inquiry, which may cause a small, temporary dip in your credit score. Many lenders and marketplaces, including LendingTree, let you prequalify for a loan with a soft inquiry first. Soft inquiries have no impact on your credit score.
If a lender denies you for a personal loan, focus on improving your credit. Every credit report is different, but making payments on time and reducing credit card balances are often wise places to start. Even small signs of progress can help.
You could also consider strategies like applying for a smaller loan amount, applying for a secured personal loan or adding a co-applicant to strengthen your financing application. It may also be worth reviewing fair credit personal loans, bad credit personal loans or personal loan alternatives to find the funding you need in different ways.
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