Personal Loan Options for Bad Credit: 450 Credit Score or Worse

Having a credit score of 450 or below severely limits your borrowing options, but getting a personal loan may still be possible. Some lenders accept bad credit scores if you demonstrate sufficient creditworthiness in other areas, such as income and spending history. However, such loans typically come with stricter terms and higher costs.

How Bad Is a 450 Credit Score?

Credit scores range from 300 to 850, with higher scores indicating stronger credit. According to the Consumer Financial Protection Bureau (CFPB), a score of 450 would be considered “deep subprime.” Here’s how it categorizes borrowers within all credit score ranges:

That said, there are two dominant credit scoring models in the United States: FICO and VantageScore. Though both have a credit score range of 300 to 850, each calculates scores differently and has its own credit range categories. For example, here’s how FICO grades credit scores:

Meanwhile, VantageScore breaks down scores as follows:

Applying for a Personal Loan With a Poor Credit Score: What to Know

You can still apply for a personal loan with a credit score of 450 or below. However, know that the loan terms will likely be less favorable than they’d be if you had a higher score. This is because a low credit score tells lenders you’ve previously struggled with debt. As a result, you’ll likely face the following:

• Limited loan options: Many banks and credit unions automatically reject applications from borrowers with poor credit, limiting your options to lenders that specialize in bad credit loans.
• Higher interest rates: To lenders, a poor credit score represents a greater risk of you defaulting on the loan, so they offset that by charging much higher interest rates. Over time, this can make your loan much more expensive.
• Higher origination fees: Origination fees are charges you pay to the lender upfront for processing your loan (often withheld from the funds you receive). With a poor credit score, you’re likely to pay 8% of the loan amount or more in origination fees.
• Lower loan amounts: Lenders are typically hesitant to lend large sums to someone with poor credit, so they’re more likely to offer you a lower maximum loan amount, making it harder to borrow enough for larger expenses.
• Shorter repayment terms: To offset the risk of lending to someone with poor credit, the lender may require a shorter repayment period. For example, you may need to pay back the loan within one year instead of several.

How To Find Personal Loans if You Have Bad Credit

With poor credit, your best chance of qualifying for a loan is with a lender for whom credit score isn’t a factor. For example, Upstart extends loans to borrowers with any or no credit score if they meet other requirements, including some related to employment and, potentially, education.

Similarly, Fig Loans offers bad credit emergency loans (a type of personal loan) of up to $500 without looking at your credit score at all. Instead, they look at what your bank statements show about your income and transaction history. However, Fig Loans is only available in five states, and the maximum repayment period is six months.

Besides these two lenders, there are many others willing to work with bad credit borrowers. However, some unsecured lenders still have minimum credit score requirements of 500 or higher, so borrowers with scores of 450 likely won’t qualify.

Alternative Borrowing Options for Bad Credit

If you can’t qualify for a personal loan (or don’t want one), consider other borrowing options for those with bad credit. Just know that these can still come with strict terms and high fees.

Secured Credit Card

A secured credit card requires you to put down a refundable deposit, which serves as your credit limit. It’s a great way to build (or rebuild) your credit, and since the lender can always take your deposit should you default, you can usually qualify with a lower credit score.

Secured Personal Loan

Secured personal loans are just like regular personal loans, except they’re backed by collateral. In other words, you agree to let the lender seize a valuable asset (like your car or house) should you default. This gives the lender more security, making it easier for you to qualify with poor credit.

Co-Signed Loan

A co-signed loan allows another person—usually one with better credit and a higher income—to sign the loan with you. Essentially, they agree to make payments should you fall behind or default, lowering the lender’s risk and augmenting your creditworthiness.

Buy Now, Pay Later (BNPL)

Buy now, pay later (BNPL) is a type of short-term financing for consumer purchases. Typically, either a retailer will have a BNPL option available at checkout, or you'll need to use a dedicated app. Then you repay the debt over a few weeks or months, often with zero interest. You'll want to be careful and avoid taking out multiple BNPL loans, a phenomenon called "debt stacking." Some of these lenders do not provide loan data to the credit bureaus.

Payday Loan

Payday loans are short-term loans designed to cover urgent expenses and are repaid in a lump sum when you get your next paycheck. They generally don't require a credit check, but they can come with extremely high annual percentage rates (APRs) of up to 400%—making them a risky borrowing option best used only as a last resort.

How To Improve Your Credit Score

In order to access additional borrowing options, improving your credit score is your best (and potentially only) option. Start by paying down your current debt and ensure payments are made on time and in full. You may need to commit to a debt repayment strategy, such as the snowball or avalanche methods.

From there, you can work on raising your credit score by getting a secured credit card or secured personal loan that reports your on-time payments to the major credit bureaus.

The Bottom Line

Ultimately, with a credit score of 450 or below, your personal loan options will be few and far between—not to mention expensive. As such, you might be better off putting up some collateral, getting a co-signer, or improving your credit to get the funds you need.