How to Get a Low-Interest Personal Loan with a Low Credit Score

Securing a personal loan with a low credit score can feel like an uphill battle, especially when you are looking for competitive interest rates. In 2026, while lenders have tightened their criteria, new fintech options and credit union programs have emerged to help borrowers with less-than-perfect credit. By following a strategic approach, you can still find affordable financing to meet your needs.

Understand How Credit Scores Affect Your Rate

Your credit score is the primary tool lenders use to determine your risk level. Higher scores usually unlock the lowest rates, while lower scores (below 600) often lead to higher interest charges to offset the lender's risk. However, your score is not the only factor; your income and debt-to-income (DTI) ratio also play significant roles.

Top Strategies to Secure a Low-Interest Loan

1. Apply with a Co-signer

If your credit score is low, applying with a co-signer who has excellent credit is the fastest way to lower your interest rate. The lender considers the co-signer’s credit history, which reduces the overall risk and often results in much better loan terms.

2. Look into Credit Unions

Unlike big banks, credit unions are member-owned and often more flexible with their lending criteria. They may offer lower rates for personal loans to members with lower credit scores compared to traditional financial institutions.

3. Opt for a Secured Loan

A secured loan requires collateral, such as a savings account or a vehicle. Because the lender has an asset to claim if you default, they are usually willing to offer a lower interest rate even if your credit score is not ideal.

Best Lenders for Low Credit Scores in 2026

1. Upgrade

Upgrade is popular for its fast funding and willingness to work with borrowers who have average to lower credit scores. They provide clear paths for debt consolidation and personal expenses.

2. OneMain Financial

Specializing in "near-prime" borrowers, OneMain often offers secured loan options that help those with lower scores get approved for the funds they need.

3. LendingPoint

LendingPoint uses data beyond just your credit score to evaluate your application, making it a great choice for individuals with a steady income but a shorter credit history.

Steps to Improve Your Approval Odds

• Check for Errors: Review your credit report for mistakes that might be unfairly lowering your score.
• Reduce Debt-to-Income: Pay down small credit card balances before applying to show you have more disposable income.
• Compare Multiple Lenders: Use pre-qualification tools to check rates from at least three different lenders without affecting your credit score.

Conclusion

Getting a low-interest personal loan with a low credit score requires patience and research. By leveraging co-signers, collateral, or specialized lenders, you can secure the funds you need while building a stronger financial future. Always ensure you have a clear repayment plan to protect your credit for the long term.