The minimum credit score for a personal loan varies per lender. Every financial institution has different qualification requirements.
Traditional bank loans have some of the strictest qualification requirements, which is why they are hard to get for many people. Eligible borrowers typically have to have credit scores higher than 670, which is a good credit rating. Bank loans are unsecured, so the lender has to risk default when providing financial relief. If you have a low credit score, the bank or credit union will likely deny your application to offset the financial risk.
However, there are alternative loan options that have far more flexible qualification requirements. Applying for a loan online with bad credit doesn’t have to be a hassle. Bad credit loans are meant for people that have low credit scores! A bad credit loan is any loan option that provides fast financial relief to people that don’t meet the minimum credit requirement for traditional bank loans. Personal loans and payday loans are two of the most common bad credit loan options.
Payday loans are short-term loans that provide small loan amounts for financial emergencies. While this seems like a quick solution to unexpected expenses, payday loans have several drawbacks. Payday loans have to be repaid within two weeks, which can make the repayment process a struggle. Many borrowers end up stuck in a cycle of debt due to short repayment periods and high-interest rates.
Personal loans provide a lump sum that borrowers can repay in monthly installments. The repayment length can last a few months or years, depending on the borrower’s preference. Between payday loans vs. personal loans, a personal loan is a superior option because you could get decent interest rates, more time to repay, and higher loan amounts.
Online personal loans work just like traditional personal loans but offer far more perks. Online loans allow you to start and finish the approval process right from home. There is no need to travel to a brick-and-mortar location or spend time waiting in line. Online personal loans provide a faster process, so you can get financial relief in as little as one business day!