520 Credit Score Personal Loan

Writer and editor - Joseph Smith | Updated on 2023-03-05

Anything below a 580 credit score is considered bad by lenders. This means getting financing becomes a lot more difficult, especially when it comes to personal loans that are often unsecured. However, this doesn’t mean that you’re totally locked out of a loan because there are still some options to consider.

How do I get a loan with a 520 credit score?

There are many sources to get a personal loan, from conventional avenues like banks and credit unions to more modern options line online and P2P lenders. Regardless of the source, lenders will always be reluctant to offer a loan to you with a credit score of 520. Nevertheless, you have to keep searching from all available options because there will still be some willing lenders. We have listed lenders that approve loans with a 520 credit score.

Commercial banks are the most difficult to get a loan from with a bad credit score, but credit unions and alternative sources are easier. Online and P2P lenders are particularly flexible when it comes to bad credit loans, but that doesn’t mean you won’t suffer from high interest rates. People who received a loan with bad credit always suffer higher interest rates compared to those with stellar credit scores.

The key here is to shop around until you find the best option for you with the best loan terms. Just ensure that the lenders performing a credit check only do a soft check because a hard check can take a further toll on your credit score. It is only after you have identified the best option that you should approach them with a loan request.

Can I improve my loan terms?

As mentioned, interest rates will be much higher when your credit score is 520, but there are certain strategies to lower this and enjoy better loan terms. One of the easiest ways of doing this is by asking for a shorter term loan. Most personal loans are repaid within 2 to 3 years, but you can look for a short-term loan of even 1 year to ensure you get the approved. This as the lender is taking a lesser risk.

Besides payment terms, you can also increase the chances of getting a loan by requesting only a smaller amount. In general, borrowing less than $10,000 can increase your chances of approval from most lenders. If you do this with multiple lenders, you can end up with a decent loan to cover any expenses you may have. 

How to improve your credit score

Most people quickly forget the trouble they went through after getting a loan, but you shouldn’t. Start working to raise your credit score as soon as possible, and the best way to do so is by paying off the loan provided on time as agreed. Regular and consistent payments for your loan will go a long way to improving your credit score. So will paying off any other loans you may have such as credit cards and bank loans.

Joseph Smith

Joseph Smith
Writer and editor

Joseph Smith is an experienced freelance writer with over 11 years of experience. His area of expertise includes finance, loans and lending. His work has been featured on various large websites including this one.
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