Credit range
Borrowing With Bad Credit, Without Getting Burned
Below 580, fewer lenders say yes and the ones that do charge more. Here is what a fair deal looks like at this range, where the line sits between expensive and predatory, and how to work your way up.
By Lendmira Editorial Team Updated 8 min read
- Score range
- Below 580
- Typical APR
- 28%–36%
- Credit union PAL cap
- 28% APR, up to $2,000
- Payday APR, CFPB example
- Almost 400%
The short version
With a credit score below 580, lenders that approve you typically quote personal loan APRs of about 28% to 36%, for smaller amounts and shorter terms than they offer better-scored borrowers. A secured loan, a co-signer or a credit union's payday alternative loan (capped at 28% APR) can bring the price down. Above 36%, and especially with payday and title loans that run to hundreds of percent, the loan itself becomes the risk.
What lenders typically offer below 580
Many banks won't make an unsecured personal loan at this range at all. The lenders that do, mostly online lenders, consumer finance companies and some credit unions, price the higher risk into the rate and limit how much they put on the line. Expect a careful look at your income and existing debts, because those matter more when your score can't vouch for you.
| APR | About 28%–36% when approved; offers above 36% exist and are a warning sign |
|---|---|
| Amount | Smaller than at higher scores; lenders often cut the amount you asked for |
| Term | Shorter terms are common, which keeps the lender's exposure down |
| Origination fee | More likely, and more likely at the high end of the lender's range |
| Approval odds | Low at banks, mixed at online and installment lenders, better with collateral or a co-signer |
These ranges are indicative. Your own offer depends on the lender, your state's rules and the details of your file, such as whether the low score comes from one old collection account or from recent missed payments.
The math: $3,000 over two years at 32%
Take the middle of the range. Borrow $3,000 at 32% APR for 24 months and the payment is $170.84 a month. Over the two years you repay about $4,100, so roughly $1,100 is interest. That is the price of the loan; decide whether what you're paying for is worth it before you look at anything else.
| APR | Monthly payment | Total interest |
|---|---|---|
| 28% | $164.67 | $952 |
| 32% | $170.84 | $1,100 |
| 36% | $177.14 | $1,251 |
The spread between 28% and 36% is about $300 on this loan, which is why it pays to compare at least two or three offers. Run your own numbers in the loan payment calculator before you apply.
Options that cost less than an unsecured loan
Credit union payday alternative loans
Federal credit unions can make PAL I loans of $200 to $1,000 for one to six months once you've been a member for at least a month, and PAL II loans of up to $2,000 for one to twelve months. The rate can't exceed 28% and the application fee is capped at $20.
Savings-secured loans
Many banks and credit unions lend against money you already have on deposit or in a certificate. Because the savings back the loan, approval is easier and the rate is usually far lower. You can't use the pledged money until the loan is repaid.
A co-signer
A co-signer with stronger credit can get you approved or lower your rate. They take on the full debt if you don't pay, plus late fees and collection costs, and a missed payment lands on their credit report too.
Vehicle-secured loans
Some installment lenders accept a car you own outright as collateral. The rate can be lower than an unsecured loan, but the lender can repossess the car if you default.
Secured and co-signed loans shift risk from the lender to you or to someone who trusts you. Secured vs. unsecured loans and cosigners and co-borrowers explain what each side signs up for.
The 36% line, and what sits above it
Federal law already draws a line at 36%. Under the Military Lending Act, active-duty servicemembers and their dependents can't be charged more than a 36% Military Annual Percentage Rate, a figure that counts interest plus most fees and add-on products. Many states set their own limits on small loans; check yours on the state lending rules pages. Our indicative range for poor credit stops at 36% for the same reason: above it, the cost grows fast and the loan is often designed to be renewed.
- Payday loans: the CFPB's example of a $15 fee for every $100 borrowed, due in two weeks, works out to an APR of almost 400%.
- Single-payment car title loans: in a 2016 CFPB study, the typical APR was about 300%, more than four in five loans were renewed on the day they were due, and one in five borrowers had their vehicle seized.
Scams that target bad credit
A low score makes you a target, because scammers know you've probably been turned down before. The FTC lists the signs of an advance-fee loan scam:
- An offer that ignores your credit. Legitimate lenders check your credit; an ad promising a loan no matter your history is a red flag.
- A fee before you get the money. Any upfront fee the lender wants before granting the loan is a cue to walk away.
- Payment by wire, gift card or cryptocurrency. Those methods are hard to reverse, which is why scammers ask for them.
- A phone call you didn't ask for. It's illegal for telemarketers to promise you a loan and ask you to pay for it upfront.
Credit repair offers work the same way. The FTC says companies can't remove accurate negative information from your report, and it's illegal for them to charge you before they've done the work. If you've paid a scammer, act quickly and report it at ReportFraud.ftc.gov. More warning signs are in our guide to loan scams.
Borrowing safely now, and moving up to fair credit
- Borrow the smallest amount that solves the problem, over the shortest term you can afford. At 32%, every extra month costs real money.
- Check the lender's license with your state regulator or NMLS Consumer Access, and read the APR and total of payments on the disclosure before you sign.
- Set up automatic payments timed to your payday. A new installment loan paid on time is one of the things that can help your score.
- Pull your credit reports and dispute anything that isn't yours. Funditia explains how to dispute credit report errors.
- Work on the score itself. Funditia's guide on how to improve your credit score covers what moves it and how long it takes.
Crossing 580 usually opens more lenders and lower prices; see what changes on our fair credit page. Once you get there, refinancing a high-rate loan can be worth checking.
Common questions
Can I get a personal loan with a 500 credit score?
Possibly, but fewer lenders will consider it, and the ones that do typically quote APRs near the top of the 28%–36% range or ask for collateral or a co-signer. A savings-secured loan or a credit union PAL is often easier to get.
What is a payday alternative loan?
A small loan from a federal credit union: up to $1,000 (PAL I) or $2,000 (PAL II), repaid over one to twelve months depending on the type, at no more than 28% APR with an application fee of $20 or less.
Is it a scam if a lender asks for a fee before I get the loan?
Treat it as one. The FTC says any upfront fee a lender wants before granting the loan is a cue to walk away. Legitimate origination fees are disclosed in your loan documents and usually taken out of the loan amount.
Will a bad-credit loan help me rebuild credit?
It can, if the lender reports to the credit bureaus and you pay on time every month. A late payment does the opposite, so only borrow an amount whose payment fits your budget with room to spare.
Sources
- FTC Consumer Advice — What To Know About Advance-Fee Loans
- Consumer Financial Protection Bureau — What are my rights under the Military Lending Act?
- Consumer Financial Protection Bureau — What is an APR and why is it higher than the interest rate for my payday loan?
- Consumer Financial Protection Bureau — CFPB finds one-in-five auto title loan borrowers have vehicle seized (May 18, 2016)
- eCFR — 12 CFR 701.21, loans to members (payday alternative loans)
- National Credit Union Administration — NCUA Board extends loan interest rate ceiling (2026)
- FTC Consumer Advice — Cosigning a Loan FAQs
- FTC Consumer Advice — Fixing Your Credit FAQs
- NMLS Consumer Access — lender license lookup
Facts on this page were checked against these sources on October 13, 2026. The PAL rate limit is 10 percentage points above the federal credit union ceiling, which the NCUA has set at 18% through September 10, 2027.
What a loan with bad credit could cost you
The numbers below are a typical starting point. Change them to match the offer in front of you, then see what lenders would actually quote.
For every $1 you borrow, you repay —. An example, not an offer: your APR depends on your credit, income and state.
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Keep reading
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By credit score
Fair credit
Scores of 580–669: APRs of about 18%–30%, wide offer spreads, and when a loan beats your card.
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Loan type
Payday loan alternatives
Credit union PALs up to $2,000 at 28% APR or less, paycheck advances, payment plans and local help.
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Debt help
Loan scams
Upfront fees, gift card demands and fake collectors: how to spot loan scams and where to report them.