How to Get a Loan with Bad Credit (Without Getting Ripped Off)

Legitimate loan options for credit scores under 600. What to avoid, where to look, and how to protect yourself.

Bad credit doesn't mean bad options — it means fewer good ones

The predatory lending industry exists because people with bad credit are desperate. Here's how to get what you need without getting ripped off.

Legitimate options (under 36% APR)

Credit unions

Your best bet. Credit unions are member-owned and typically offer rates 2-5% lower than banks or online lenders for the same credit profile. Many have specific programs for members with impaired credit. Find one at ncua.gov.

Secured personal loans

Offer collateral (savings account, CD, or vehicle) to unlock a lower rate. You're reducing the lender's risk, so they reduce your rate. Typical secured personal loan rates: 8-15% even with poor credit.

CDFI lenders

Community Development Financial Institutions are designed to serve people underserved by traditional banking. They consider your full picture, not just your FICO score. Find one at ofn.org.

Co-signer loans

A co-signer with good credit can dramatically reduce your rate. But understand: they're equally liable for the loan. If you miss payments, their credit suffers too. Only use this option if you're confident in your ability to repay.

⚠️ The 36% APR rule: If any lender offers you a rate above 36% APR, walk away. This is the widely recognized threshold for predatory lending. It doesn't matter what they call it — personal loan, installment loan, flex loan — above 36% is a trap. Read why.

What to avoid

Payday loans — 400%+ APR
Title loans — 300% APR, you lose your car
"Guaranteed approval" offers — the rate is the catch
Tribal lenders online — operate outside state consumer protection laws
Any lender requiring upfront fees — legitimate lenders deduct fees from proceeds

Build your score first if you can wait

If your need isn't urgent, 3-6 months of credit building can move your score 30-50+ points and save you thousands in interest. Visit CreditBoostTips for free strategies.