The best way to get a personal loan with a 500 credit score is to research lenders that cater to borrowers with low credit scores. You may be surprised to learn that there are several different loan options for poor credit and many different lenders that offer them. The most common examples include personal installment loans, online payday loans, and title loans.
A personal installment loan is a good option for a borrower with a poor credit score. Whether or not you can be approved for one with a 500 credit score will likely depend on the specific lender. So your first step will always be to research lenders and find a trustworthy one that’s willing to work with you.
Personal installment loans are unsecured loans that a borrower pays back over time (anywhere from several months to a couple of years in some cases). They’re often a good alternative to shorter-term loans like payday and title loans because you have more time to pay them off. You can also usually get larger loan amounts with a personal installment loan, compared to payday loans.
A payday loan is one of the most common financial products for borrowers with 500 credit scores and below. These are unsecured, short-term loans that a borrower pays back within two weeks, or by their next payday. Because the repayment period is short, and the interest rate is high it can be difficult to pay off on time.
A title loan is a secured loan. This means you can only get one by offering up collateral. The collateral in this case would be the title to your vehicle. The lender would then issue you a loan based on a fraction of the value of the vehicle. Once you pay it off, you get your title back. But if you can’t repay the loan, the lender is legally allowed to sell your vehicle to recover their loss.
Out of the three common examples listed above, we always recommend personal installment loans. They’re usually easier to manage and budget for since you have a longer repayment period. And you won’t have to worry about risking your vehicle or other types of collateral.
