How to Get a Large Personal Loan With Bad Credit

(May 2024)

How to Get a Large Personal Loan With Bad Credit

In This Article

Thinking of getting a large personal loan with bad credit but not sure how to go about it? This article might be just what you need.

Ordinarily, applying for a large personal loan with bad credit sounds impossible. Plus, there is the fear of rejection from your bank, online lender or credit union. These are limiting thoughts that may restrict you from applying for the loan you desire.

Thankfully, no matter your financial situation, there’s a way out. This article will show you all you need to do to get your bad credit loan approved in no time. To get your large personal loan approved with bad credit, here are seven things to keep in mind:

  1. Review your credit score and reports
  2. Plan how you’ll repay the debt
  3. Shop for bad credit loans
  4. Use pre-qualification to your advantage
  5. Add a co-signer if possible
  6. Expect a thorough credit check
  7. Consider secured loans

Let’s get started!

1. Review Your Credit Score and Reports

If you want to get a large personal loan with bad credit, review your credit score first. Before seeking a loan, repair any inaccuracies or pay off any outstanding debt on your credit record. There are several places where you can verify data in your FICO score. But the easiest is Under federal law, you are entitled to a free credit report from the top three credit report bureaus—Experian, Equifax and TransUnion. With this, you should be able to determine your credit score and discover any flaw in your record after you get your report.

2. Plan How You'll Repay the Debt

Make sure you can afford to pay back the loan you apply for, so you don’t end up with loan payments that complicate your budgeting. Better still, you can include your repayment amount in your budget so that repayment doesn’t become a problem.

Higher loan payments—and worse, a default—will only degrade your chances of successfully applying for a loan in the future. Plus, your credit score will suffer as a result.

Therefore, before requesting a large personal loan with bad credit, be sure you have a payback plan based on your income and monthly earnings. Make sure you understand the monthly payment and due dates.

If you’re having problems paying, think about alternate ways to acquire money. In sum: Avoid taking out a large personal loan you cannot repay.

3. Shop for Bad Credit Loans

A poor credit score can preclude you from receiving the best APRs and conditions. But do not think that the poorest rates and terms are the only ones accessible. You can still get a large personal loan with bad credit. Your credit union might be able to offer you a better rate.

Additionally, build a rapport with your local bank or credit union. With that, you offset your bad credit score with your good record of paying on time and holding a reasonable deposit balance in your account—assuming, of course, that your bank or credit union knows you and your expenditure patterns.

4. Use Pre-qualification to Your Advantage

First off, do not confuse pre-qualification with pre-approval. Pre-qualification, on one hand, helps you determine whether or not you are likely to pass for a loan. It is based on the data you provide to your lender. Pre-qualification is good proof of your creditworthiness.

Pre-approval, on the other hand, is the next step in your loan process. With pre-approval, your lender or credit union gives you a conditional agreement to loan you the money you seek.

If you can get a pre-approval, you are more likely to receive your loan. For instance,“…Give your lending institution some information about you so they can pre-approve you through a soft credit inquiry.”

How does pre-qualification work?

If you are not sure how pre-qualification works and how you can use it to your advantage, well, here you have it:

  • Choose the lender or credit union you would want to get your loan from. You can choose one or more lenders. Also, you can either apply online (through an online lender) or in-person (through a credit union or your local bank)
  • Your lender will ask a few questions, including your name, address, income, assets, credit score and debts
  • After this, your lender will review your information the same day and give you feedback on what loan amount and the interest rate you pre-qualify for

Once you pre-qualify for a loan, do not rejoice just yet. It only means that you are one step closer to getting the loan you desire.

Note that pre-qualification from more than one lender increases your chances of finding the best loan you need.

5. Add a Co-signer if Necessary

A co-signer is someone who agrees to sign the loan with you. Your co-signer must be willing to pay your debt if you cannot do so. If you’re having difficulties getting a loan, a co-signer with a superior credit rating and record can help.

However, if you have difficulties repaying your debt, taking out credit with a co-signer might ruin your social connections. If you choose to apply with a co-signer, be sure you both understand what you agreed on.

6. Expect a Thorough Credit Check

While applying for a personal loan, be aware that your creditor will run a credit analysis—also known as a hard pull—which will harm your credit score in the short run.

Too many hard credit pulls in a short time might give the impression that you’re looking for loans you can’t afford to pay back. Be cautious about how many loans you seek, and be ready for a temporary reduction in your credit score owing to the loan application.

Nonetheless, you can raise your credit score in a few months if you make regular loan payments.

7. Consider Secured Loans

With a bad credit score, secured loans may be a better alternative because they allow you to put up assets as collateral to support your loan.

When you apply for large personal loans with a bad credit score, the sad truth is that you will pay more than someone with a better credit score. Banks and lenders often use independent services to determine your credit score.

Bear in mind that these companies deploy credit scoring techniques—such as outstanding loans and repayment records—to estimate your creditworthiness.

So the worse your credit score, the more difficult it is to take out loans. If you have a bad credit score, but are able to get loan approval, you will almost certainly pay a much higher interest rate to compensate for the risk of default.


To get a large personal loan with bad credit, follow through with the above processes. Review your credit score and report, plan how you’ll repay the debt, and shop for bad credit loans.

Also, use pre-qualifications to your advantage. With these, you increase your chances of getting your loan approved in no time. Good luck!

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