You may think that a 650 credit score personal loan might be difficult.
But it doesn't have to be.
Getting a personal loan can be a great way to get back on your feet if you are suffering from severe financial times. However, money difficulties often cause a person to lose points on their credit score. As a result, there is a chance you may have a 650 credit score. This score means you are right on the threshold of having good or bad credit and are in a unique loan situation.
While you shouldn't have difficulty getting a loan, you may struggle to find a lender who is willing to take a chance on you. This situation is always frustrating, and one that can lead to many personal heartaches. However, several lenders across the nation are willing to lend money to someone with 650 credit. Even better, they'll provide you with a fair and reasonable repayment schedule.
That's why we've created an informative and engaging list of the best and most high-quality personal loans that you can purchase in 2018. We have investigated each loan provider to learn more about their lending practices. This investigation led us to find several providers who are friendly to those with a 650 credit score and willing to create a more affordable rate of repayment.
So if you or someone you love is looking for a personal loan, it is worth reading through this information. It will help you better understand the nature of a 650 credit score, how it can affect your investment, and which lenders are right for your needs. While you should always talk to a loan professional before making a decision, this article can help streamline your choices and make picking a lending option a more straightforward process.
The Top Four Lenders
LendingTree is probably the best option for those who need a personal loan with a 650 credit score. They require you to fill out just a simple online form before they do a soft credit pull. They will then set you up with multiple different lenders who will work hard to impress you and get your business. While they don't provide loans directly to customers, they are an excellent resource for finding someone who will lend to you.
Let's take a look at the many advantages and disadvantages of working with this company. Honestly, we found very few reasons not to consider this business. As a result, they top our list for people who are looking for a personal loan. For example, the advantages of working with LendingTree include:
- No Fees – Unlike other types of lending services, you don't have to pay anything upfront to apply. You can search for loans that meet your needs and apply them quickly and efficiently. That said, you are going to pay application fees, processing fees, and closing costs when applying for and getting approval on specific loans.
- Broad Variety of Lenders – Unlike other personal loan providers, LendingTree hooks you up with multiple possible companies. In this way, you can find someone willing to work with a person who has a 650 credit score. Even better, you can tweak your rates and find someone who will accept your required interest rate.
- Very Fair to Those With Poor Credit – LendingTree has stated on multiple occasions that they welcome everyone to use their services. Even people with credit scores far below 650 have used them before. That said, they can't guarantee that you will get a loan because their lenders will have different acceptance needs.
- Simple Application Process – Applying with LendingTree is straightforward. All you need to do is fill out an online application to get started. Then, you can pick which lenders and loans you want to consider. Click on the lender, search through their loan options, and fill out the application. It couldn't be much more straightforward.
As you can see, LendingTree increases your chances of finding a great loan that works for your credit score. However, there are a few drawbacks to using this service. While they are less severe than other lenders we found on the market, they are still important to understand:
- Loan Restrictions are Common – While LendingTree sets no limits on the types of loans you can consider, their lenders may create some limitations. For example, some may not let you get a small personal loan but offer a higher-priced mortgage loan. Make sure to carefully read the fine print when applying for any loans here.
- Lack of Competitive Pricing – One problem that someone with a 650 credit score may run into here is a lack of competition between lenders. That's because your credit is at a level that doesn't inspire many lenders. However, even those with excellent or excellent credit have a hard time improving their chances of acceptance or their interest rates when using LendingTree.
While these limitations are a little frustrating, they are understandable. Lenders are a business that is trying to succeed. As a result, they may not be willing to take the same kind of chance on you that they would elsewhere. However, those who are struggling to find a loan usually do quite well with Lending Tree.
Lending Club is a lending group that is perfect for someone with a 650 credit score. Their minimum acceptance level is 600, far below your current rating. Like LendingTree, they use a soft credit check to get your rate. As a result, your credit is not negatively affected when applying for a loan from this company. Their APR rates are usually around 5.99 to 35.80 percent on loans of up to $40,000.
They are considered a peer-to-peer lending company that helps connect you with possible lenders. In this way, they are a lot like LendingTree. While they aren't quite at the same level as that giant, they still offer many benefits, including:
- Simplicity – Applying with Lending Club is effortless and easy to understand. All the lenders here have a transparent communication method that makes it easier for you to plan for and pay your loan. No hidden fees are included with this company
- Fast and Reliable Services – After applying online, you should get a pre-approved offer in just a few minutes. Even better, you can usually get your money in around ten days or less. That kind of fast approval is rare in the lending world.
- Fair Interest Rates – As mentioned above, the APR and interest rates of this company are usually pretty reasonable. While those with bad credit are likely to get a 30 percent interest rate, you are more likely to get an 8-10 percent interest rate with a 650 credit score.
- Widespread Availability –Lending Club is probably the most readily available lending option on our list. It beats out LendingTree in the number of states that accept these types of loans. As a result, you are more likely to get a loan from this company.
While these are great benefits for your lending needs, Lending Club is not a perfect personal loan source for someone with a 650 credit score. The disadvantages of applying with Lending Club include the following minor concerns:
- Tax Documentation is Often Required – If you don't want to share your tax information with the world, Lending Club may not be for you. In some instances, they ask for this documentation before you are approved for a loan.
- Some Stringent Qualification Requirements – Another concern that may drive you away from Lending Club includes their sometimes tough qualification requirements. These include having no more than five hard credit inquiries in the last five months and a 40 percent debt-to-income ratio.
That said, Lending Club is still an excellent choice for a majority of people with a 650 credit score. Like LendingTree, it can provide you with a high-quality loan quickly and without much work. And if you need a personal loan quickly, there's no better provider to consider on this list.
Marcus by Goldman Sachs
Marcus by Goldman Sachs is a type of personal loan that is suited for those with lower credit scores. Typically, they offer loans for debt consolidation and credit consolidation, so keep that in mind before applying for a loan with this company. Their current borrowing limit is about $40,000. Their APR rates are better than Lending Club (6.99 to 23.99 percent), making them an excellent option for you.
Even better, they don't have a set qualification limit for your credit score. As a result, you can apply for a loan with a 650 credit score and receive it. That said, they may reject people if they have missed debt payments in the past and typically prefer applications with a 660 credit score or better. So you're pretty close to receiving their prime borrowing rates! Other advantages of this company include:
- No Origination Fees – As a result, you won't have to pay more than you can afford for this loan. Those with a 650 credit score should be particularly happy about this fact because it makes it even easier for them to qualify.
- Payment Deferment – If you pay your loan payments on time for a year, you can defer your payments. You must qualify for this deferment by meeting specific hardship standards, such as an inability to meet your payments or losing a job.
- Quick Repayment Schedules – You won't have to set up an excessive repayment cycle if you borrow from Marcus. Typically, you will pay back your loan after 36 to 72 months or 3-6 years. In most instances, you can set your repayment rate to one that suits your needs.
- Soft Credit Reports – Unlike other lenders who ask for hard credit pulls, you can use a soft one with Marcus to check your rates. As a result, you can tweak your rates more smoothly and without impacting your credit. Even better, you can check your credit report for any errors that could affect it.
While we are big fans of this lending option, we do have some bad news for you. Several negatives drop it a little on our list. Most of these concerns aren't huge but must be considered before you apply for a loan from them:
- Confusing Qualification Details – Marcus doesn't outline many qualification needs for their loans. While they technically accept applications from people with all types of credit, they may mysteriously turn down someone with a 650 credit score. This confusion can make them very frustrating.
- Weird Late Payment Management – In some ways, Marcus' late payment management is a good thing. If you miss a payment, you won't have to pay a fee or even suffer from worsened credit. However, Marcus will increase your interest rate and cause you to pay more over the life of the loan.
While that strange late payment management method does drop Marcus down a bit on our list, we still think it's a great choice. If you want a lender who is willing to work with people from all walks of life, Marcus is an excellent option.
Last on our list is Best Egg, a personal loan company that offers loans of up to $35,000. Their current credit score minimum is 640. As a result, you should qualify for a loan from this group. However, your interest rate and APR may be higher than you'd like it. While they have the same 5.99 percent minimum APR as the other companies on this list, its maximum is 29.99 percent.
This rate places it a bit above Lending Club but not quite as good as Marcus. However, they also ask for an origination fee after you qualify. This rate is usually set at about 0.99 to 5.99 percent. Expect a rate on the higher end from this company if you have a 650 credit score. Advantages of working with Best Egg include:
- Soft Credit Pull – Like all the lenders we've discussed so far, Best Egg checks your score softly. As a result, your credit won't suffer.
- Very Fast Application Rate – While Best Egg is not quite as fast as Lending Club, you should still get approved in just a few hours and get your money in around two weeks.
- Competitive Interest Rates – While a 650 credit score won't get you the best interest rate from Best Egg, you are likely to get a lower rate than when borrowing from other companies on this list.
- Inexpensive Late Fee – If you miss a payment after borrowing from Best Egg, you only have to pay $15. This rate is one of the lowest in the industry, as $25 is the typical late fee amount.
A few problems still offset these benefits. We already mentioned the origination fee that this company charges. That fee alone dropped Best Egg to the bottom of this list. However, it does have other problems to consider, such as the fact that falling below a 660 credit score is likely to skyrocket your interest rate.
That said, Best Egg is still one of the top sources for a personal loan that we could find. Those with a 650 credit score are welcome here and are likely to receive a loan that meets their needs without breaking the bank too much.
How You Can Get Your Personal Loan Approved
Our list of high-quality lenders should give you a pretty good idea of which companies you can trust for obtaining a high-quality and fair personal loan. However, there is still a concern that these lenders will reject your application. That's because there are many reasons people with a 650 credit score don't get the loan that they want. Most of these influences are usually pretty easy to understand and avoid.
So don't hesitate to read through the tips we have outlined below. They have been carefully researched and are known to be effective ways of improving your chances of loan approval. While none of them is a fool-proof way to boost your chances of a personal loan, they help get you on the right track for approval and give you increased insight into the whole process.
Improve Your Credit Score
This tip cannot be emphasized enough. You need to work to improve your credit score and get it out of the 650 range. If you make your payments on time and can pay off a smaller source of debt, you'll see your score gradually improve.
While you need to get to 690 to achieve a good credit rating, even five or six extra points will impress your lender. Even better, a free credit report can help you find errors. If you successfully dispute these errors and get them off of your report, you can boost your credit exponentially almost immediately.
Pre-qualification performs a soft check on your credit that can grant you an increased chance of improving your chances of a loan. You'll have to divulge your income, monthly debt obligations, where you live, where you went to college, and other personal information.
Pre-qualification provides lenders with a chance to streamline the personal loan process and impresses them when you qualify. However, failing to qualify during this process can decrease your chances of approval. That's why you must make sure you are certain you can meet the demands set up by your lender before applying for pre-qualification.
Increase Your Income
While this step may be easier said than done, it can help improve your chances of personal loan approval. That's because you will have more money to make your loan payments. This increased income will impress lenders and show them that you are improving your life.
It also makes it more likely that they'll approve your loan. Consider taking side jobs or a part-time position to boost your chances. Even an extra 0 a month will make lenders more likely to approve your private loan application without delay.
Shop Around and Haggle With Different Lenders
Don't accept the first loan offer you get from any lender. This exclusion includes the lenders we have already discussed. Taking your first offer will make you seem desperate or easy to fool. As a result, lenders may have second thoughts and take back their offer.
Always be willing to haggle a little bit on the cost and talk to other lenders. Usually, you can get them to create better terms if you are willing to fight a little bit. Even better, you may be able to create a bidding war between lenders that gets you a higher-quality loan at a fairer price.
Consider a Secured Loan
People with a 650 credit score may be going to lenders looking for an unsecured loan. An unsecured loan is a safer option because it won't require any down payment or collateral. Unfortunately, you may not have much choice here. There's a good chance many companies may deny you the chance of even applying for an unsecured loan.
As a result, a secured loan is often a better choice for those in your position because they are usually cheaper and have fairer interest rates for people with a 650 credit score. Paying these loans back will also increase your credit score and make unsecured loans easier to obtain.
Find Someone to Co-Sign
If you can find a person with better credit than you, you can ask them to co-sign the loan with you. This means that they are liable to repay the loan if you fail to do it. Many people may balk at this act, but others will be willing to trust you.
Typically, parents or grandparents with rich savings accounts are a good choice for you in this situation. That's because a co-signer shows a lender that someone is willing to take a risk on you and will take over debt if you can't. That assurance makes them more likely to lend to you.
Never Consider Payday Lenders
If you are struggling to find a lender who is willing to take a chance on you, you must stay patient and avoid desperation when applying for loans. That's because you can always find someone who will provide you with a loan.
And never talk to a payday lender for any lending purpose. They create challenging repayment cycles that are almost impossible for some to meet. In some instances, their rates may be nearly usurious. Even worse, failing to pay these loans back will decrease your credit and make other personal lenders avoid you.
Consider Your Spouse's Income
When you are going out for a personal loan, you may be able to add your spouse's income into your on the application. That's because many lenders consider you and your spouse as a joint account.
Reporting their income with yours increases your debt-to-income ratio and makes a loan more appealing to the lender. As a result, they may be more willing to provide you with a loan. Make sure that you are accurate when reporting two incomes, or you might break the law and get into legal trouble.
Refinance Other Sources of Debt
Those with a lot of debt should find a way to refinance or settle it down to one monthly payment. This act helps to decrease your amount of debt and makes you a more appealing borrower. Just as importantly, it can reduce your debt-to-income ratio and provide you with an easier path to personal loan repayment.
However, be aware that refinancing your debt creates a newer, and sometimes longer, payment cycle. For example, getting stuck in a 30-year payment plan is likely not to appeal to many people.
Hire a Financial Adviser
A financial adviser can help get your financial information in order and present it simply and coherently. For example, they may find other sources of income or savings that you forgot to mention.
They can also negotiate with the lender to create a fairer repayment cycle for you. While they may seem expensive at first, they are more than worth it for those with a 650 credit score. In some instances, they may take no direct payment but ask for a percentage of the loan. This amount is usually no more than 10 or 20 percent.
Getting the 650 Credit Score Personal Loan That You Deserve
As you can see, getting a personal loan with a 650 credit score is not an impossibility. However, you do need to take the time to sort through the lending options available to you. After all, choosing a company that sets a low rate may make life even more difficult for you. Even worse, it could cause severe damage to your credit if you can't make the payments.
However, a fair loan with a solid repayment schedule will improve your credit by diversifying the types of debt that you possess. Even better, regularly making your payments will further boost your score by showing that you are a capable borrower who can pay back what you owe. If you pay back all of your personal loans, you will find your credit score soaring even higher.
So don't hesitate to contact one of the lenders on this list to talk to them about what they have to offer. You might be surprised to learn how fair these lenders can be to people stuck in your credit situation. Many are willing to take a risk if you can show them you have a good job and can quickly make your payments. In this way, you can get your life back on track. This process will allow you to become the person you were destined to become before being hit by financial difficulties.
The Problems Caused By a 650 Credit Score Personal Loan
While a 650 credit score is nothing to be ashamed of possessing, it is by no means a great score. One point lower, and you'd fall into the category of poor credit. Falling in this range will make it a lot harder for you to get the personal loan you desire.
However, fair credit like yours is still better than falling into lower categories. A 650 credit score puts you in the cool position of being able to increase your credit score to a good range. As a result, it should be possible for you to get a personal loan while possessing a 650 credit score. That said, you may not get the exact loan you initially wanted to purchase.
That's because lenders often look at someone with a 650 credit as someone who has had credit issues in the past. For example, you may have missed a few credit card payments or possess a high car payment. As a result, lenders may see problems on your credit report and worry that you'll fall into those patterns of behavior again.
That said, most lenders are likely to give you a chance to show you are a worthwhile borrower. Showing a lender that you have a good job or a recent history of debt repayment can help out your chances here. Even with these improvements, you may run into problems when applying for a personal loan with a 650 credit score, such as:
- Higher interest rates
- Shorter repayment cycles
- Harsher down payments
- Struggles to pay back your loan
- Lender worries and rate adjustments during the life of your loan
These concerns are caused by understandable concern from the lender. Many loan providers are very conservative about who they lend to and may consider you too low for their threshold. However, a growing number of companies are trusting those with 650 credit scores and are willing to offer them alternative loans.
Michael launched Wealth of Geeks to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.