Best 520 Credit Score Loan Options: Compare Rates & Terms

Borrowers with 520 credit scores are less likely to qualify for traditional personal loans. Such a rating is considered low and can be a sign of your past financial mistakes, making lenders wary of you.

However, you can still find loan providers who will approve you, even with a poor credit score. Plus, you can consider several alternatives, such as secured loans and co-sign loans. Here’s a look at the best 520 credit score loan options to borrow online.

Where to Get The Best 520 Credit Score Loan

Editor’s Thoughts: Avant personal loans come with reasonable interest rates between 9.95% and 35.99%. The service has lenient minimum credit score requirements, flexible repayment options, and more than 20,000 5-star reviews on TrustPilot. However, it offers no joint and secured loans. Administration, late, and dishonored payment fees may be charged.

Editor’s Thoughts: Borrowers often use Achieve’s personal loans for debt consolidation due to interest rate discounts and direct payments to creditors. Although the service has a quite high minimum credit score requirement, joint loans can be available for people with low credit. Just be aware of its high minimum loan amounts and potential origination fees.

Editor’s Thoughts: Happy Money offers personal loan options at reasonable rates, making them suitable for covering high-interest debts. However, quite long funding times and the lack of joint or secured loan options may be an obstacle.

Editor’s Thoughts: LendingTree is a trusted connecting service that partners with multiple loan providers. It offers competitive interest rates and has a relatively low minimum credit score and income requirements. However, you may be charged potential fees for loan processing and late or early payments.

Editor’s Thoughts: Borrowing options offered by Discover Personal Loans have competitive rates and repayment flexibility. Additionally, the service offers a free Credit Scorecard, allowing you to review your credit score without affecting it. Just note that eligibility requirements may be strict, and fees for late or missed payments may be charged.

Editor’s Thoughts: OppLoans can be a last-resort option for people with bad and poor credit scores. The service sets no minimum FICO score requirements and allows borrowers to boost their credit by making on-time payments. Two main downsides are extremely high interest rates of up to 160% and alleged acts of loan term misrepresentation.

Editor’s Thoughts: OneMain Financial is known for its convenient loan amounts, flexible repayment terms, and bad credit loan options with or without collateral. The service is more focused on a borrower’s ability to repay the funds, not on their credit scores. However, interest rates and fees can be higher than those offered by competitors.

How to Compare Loans for a 520 Credit Score?

Choosing the right loans for a 520 credit score may give you a headache. Here are some key factors to look at to navigate this financial maze:

• Eligibility requirements. Each lender may set its unique criteria as long as it follows federal and state laws. Make sure you can meet them before applying;
• APRs. Choose a lender with the lowest possible APR and fee ranges available for your initial parameters;
• Repayment terms. Review the repayment options a lender offers to ensure you can choose a convenient schedule; 
• Monthly payments. Make all the calculations in advance to see whether your monthly loan payments meet your budget;
• Lender’s reputation. Review what other customers say about their previous borrowing experience to ensure you choose a trustworthy loan provider.

Is 520 a Good Credit Score?

A 520 credit score falls into the “poor” category, which is between 300 and 579. Such a rating indicates you have a lack of credit history or made some credit or financial mistakes in the past. Therefore, lenders may be wary of you and less likely to approve your loan request. Having a low credit score may also result in higher interest rates and unfavorable loan terms. For example, you may be asked to provide collateral or get a shorter repayment period.

What Can I Get with a 520 Credit Score: Types of Loans

Although problems may arise, there are still some options to consider with a 520 credit score. Below are some of them.

Credit Union Loans

Credit unions are focused on helping the communities they serve, not gaining profit. Therefore, they usually offer personal loan options with lower interest rates and apply more relaxed requirements, including those related to your credit history. To get a credit union loan, you need to be within the credit union’s field of membership. This includes having some common bonds with other members, such as your employment or area of living.

Secured Personal Loans

Unlike an unsecured personal loan, a secured one is always backed by collateral. This means that you need to provide your property as a repayment guarantee. Thanks to this, lenders take on less risk and can get their money back if you default. Therefore, secured personal loans are more accessible for bad and fair credit borrowers.

Auto Loans

Borrowers with credit scores of 520 can get auto financing, provided that they can make a down payment of at least 20%. Additionally, your car will be used as collateral, meaning that a lender can repossess it if you default. To improve your chances of getting approved, consider using a co-signer or ask a dealership about departments that work with low credit borrowers.

Mortgages

While most conventional mortgage lenders usually require an applicant to have a higher credit score, some options for a 520 rating still exist. They include FHA loans, VA loans, and USDA loans. All of them are backed by the government and offer several perks, such as lower down payments and interest rates.

Online Loans

Online loans are issued by alternative lenders and represent more accessible and convenient alternatives to traditional loans. Their main benefits lie in a simple application process, more relaxed eligibility requirements, and fast funding via a direct deposit. However, these unsecured loans tend to be more expensive than regular personal loans.

Credit Cards

Credit cards may be convenient as they allow you to use money when needed and pay interest only for the amount you actually spend. At the same time, they usually have higher costs. Some options for a 520 credit score include secured credit cards, store credit cards (options like Amazon Secured Card may combine these two), and credit card cash advances.

Installment Loans

An installment loan is an alternative to a regular personal loan designed specifically for bad credit borrowers. It typically has a shorter repayment period, a lower loan amount, and a higher interest rate. However, bad credit installment loans still offer some sort of flexibility.

Payday Loans

Payday loans are short-term, high-interest debts that need to be repaid in one lump sum within just several weeks. The due date is usually tied to a borrower’s next paycheck. A payday loan comes with no hard credit report check and can be obtained quickly with any credit. Still, experts recommend using them only as a last resort due to their sky-high APRs of over 400%. 

Credit-Builder Loans

As the name suggests, a credit-builder loan is an option designed specifically for establishing or improving an individual’s credit history. Instead of getting money on hand and then repaying the loan, you need to make your monthly payments upfront. These payments will be deposited into a savings account. You will be able to get the money only after the repayment period ends. Each on-time monthly payment will be reported to major credit bureaus, improving your credit.

Rates & Terms of Loans for a Credit Score of 520

Loans for a credit score of 520 are not created equally. Each lender may set its own unique requirements and take into account other factors, such as your income, debt-to-income ratio, and overall financial behavior. The exact terms and rates may also depend on the loan type. Here are some common details:

• Repayment periods: from several weeks to 60 months;
• Loan amounts: $1,000 to $50,000 (may be even higher for mortgages);
• APRs: 5.99% to 35.99% for regular loans. Some options may have APRs of over 400%;
• Fees: origination fees are usually between 1% and 10%. Late fees and prepayment penalties may be applied.

How to Get a Personal Loan with a 520 Credit Score?

The process of getting a personal loan with a 520 credit score may vary by lender. Here’s the most common scheme:

1. Compare lenders. Look at the eligibility requirements and loan terms and choose several loan providers with the best offers.
2. Pre-qualify. In most cases, this process takes place online and doesn’t affect your credit score. You will be asked to provide some basic personal and financial information.
3. Review your potential loan terms. Choose an offer with the best terms, paying special attention to APRs, repayment terms, and overall trustworthiness.
4. Submit a final application. This typically involves providing supporting documents. Some lenders may allow an online process, while others will ask you to visit a store.
5. Accept an offer. If approved, you need to sign a loan agreement to get the funds.
6. Receive the money. Lenders usually transfer funds via a direct deposit into your active bank account. The process may take from one business day to several weeks.

Eligibility Requirements for a 520 Credit Score Loan

Most lenders set the following eligibility criteria for a 520 credit score loan:

• Be at least 18 years old;
• Be a US permanent resident;
• Have an active checking account;
• Provide income confirmation (the minimum sum varies by lender).

Also, loan providers may pay attention to your debt-to-income ratio and set certain minimum credit score requirements.

Ways to Improve Your Credit Score

Although there are several borrowing options for borrowers with low credit, your FICO rating directly affects your loan rates and terms. The higher the credit score, the better conditions you can expect to get. Therefore, it’s recommended to boost your rating before applying. Here are some steps to take:

• Keep track of your bill and loan due dates. Your payment history is one of the most important factors. By paying on time, you can boost your credit quickly;
• Get a secured credit card or a credit-builder loan;
• Don’t close credit card accounts. This can affect your credit mix and length of credit;
• Pay off some high-cost credit card balances to reduce your credit utilization rate.

Expert tip: Another smart way to reduce credit utilization is by asking a credit card issuer for a higher credit limit.

Alternatives to 520 Credit Score Loans

Still haven’t found what you’re looking for, as none of the options above seem right to you? Consider a few more alternatives:

• Borrowing from family;
• Cash advance apps;
• Pawn shop loans;
• Payday advances.

Methodology

The BadCredify’s assessment process starts with reviewing personal loan offerings from over 40 lenders and financial organizations. We gather information from every lender and cross-check the details on their websites and customer reviews.

Our experts go through the pre-qualification procedure and evaluate the terms offered. We pay special attention to interest rates and fees, repayment terms, safety and convenience, funding times, and eligibility criteria. Then, we choose the lender that offers the best terms based on the factors considered.

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