The Average Credit Score for Personal Loans

When you apply for a personal loan, your chances of getting a low interest personal loan rate are much higher if you have very good to excellent credit (a score of 740 or higher), compared to those in the fair credit range (580 to 739). 

There is no set average credit score for personal loans, but the average FICO credit score was 714 in March 2026. Understanding how your score impacts your loan — and what you can do to improve it — can help you secure the most affordable financing possible.

What credit score is needed for a personal loan?

If your credit score is in the 800-plus range, you’ll have the best chance at securing a lender’s lowest advertised rates, the largest loan amounts and the most flexible repayment terms. However, you might still qualify for a lender’s best personal loan rates or terms with a FICO score of 740 or higher.

Since each lender sets its own eligibility requirements, the credit score you’ll need to qualify varies by lender. Most lenders require a minimum score of around 580 to qualify, but of course you’d be quoted less competitive rates and terms.

Here are a few examples from common lenders to guide your search and ensure you qualify for — and receive — the best rates possible on a personal loan.

How does your credit score affect your personal loan rate?

Improving your credit score before you apply for a personal loan can increase your chances of qualifying for lower interest rates. Pay down existing debt and keep balances low on your credit cards to quickly improve your credit score. 

The cost of your loan is directly impacted by the APR you qualify for. The difference between bad credit and excellent credit can mean spending thousands of dollars more. For example, this is how the math works out for a $10,000 personal loan repaid over five years. 

Over the life of the loan, the lower APR will save close to $10,000 in addition to a significantly lower monthly payment. 

Personal loans for bad credit

Bad credit personal loans are designed for borrowers with poor credit, and lenders may place more emphasis on your income, employment history or education to determine your eligibility. 

If you have bad credit, you can expect higher interest rates, lower loan amounts and fewer lender options. It’s not unusual for applicants with bad credit to be offered an annual percentage rate (APR) as high as 35.99%. 

Generally, the minimum credit score needed to qualify for a personal loan is 580, though some lenders accept scores as low as 300. If you qualify, ensure that you can afford to repay the loan as agreed. You should also watch for signs of predatory lending by verifying a lender’s credentials and checking borrower reviews before applying.

How to prepare for a personal loan before applying

There are a number of steps to take before applying for a personal loan to improve your odds of qualifying for a loan and to understand the cost of borrowing. 

• Check your credit score. Know your credit score in advance to gauge what rates you’ll likely qualify for. Your bank or credit card issuer — and some third-party platforms — may offer free access, or you can check your score with the credit bureaus for a fee.
• Compare lenders. Shopping around and comparing lenders will help you identify the most competitive loan terms possible, which can save you money over the life of the loan. Look for the best personal loan rates, including competitive APRs, low fees and favorable terms.
• Read the fine print. Many loans charge origination fees, prepayment fees and other penalties. Reading a loan’s fine print gives you a better understanding of what you’re signing on for and can help you determine whether you’re comfortable with the loan terms before proceeding. 
• Prequalify when possible. Prequalifying for a loan allows you to assess what sort of interest rates you may qualify for. This information can help you determine whether you can afford the loan payments. 
• Calculate affordability. Use your prequalification or estimated rates based on your credit score with a personal loan calculator to determine what your monthly loan payments might look like. This can help you ensure the loan truly fits your budget.

Other factors that impact loan eligibility 

While your credit score may be one of the most important factors a lender considers when reviewing a loan application, it is just one piece of financial information. Lenders may also consider other information, like your income and current debt. 

• Income: You’ll need to have proof of sufficient income to repay a loan, and some lenders may have a minimum monthly or annual income requirement you’ll need to meet in order to qualify for a loan. 
• Employment: Lenders like to see stable employment, often two years or more. This means you will need to submit proof of employment, such as W-2s, pay stubs or tax returns. 
• Debt-to-income ratio: Your debt-to-income (DTI) ratio is the total monthly debt payments as compared to your monthly income before taxes. Most lenders like to see a DTI under 33%.

Some lenders are also willing to consider nontraditional factors when reviewing an application, such as your education and employment history. Eligibility is based on a wide variety of data points, so reach out to potential lenders if you’re unsure what will be checked.

Bottom line

Before taking out a personal loan, check your credit score and have a clear understanding of your overall financial health. Consider the APRs offered, compare lender requirements and calculate your monthly payments based on what you’re eligible for.

To minimize damage to your credit score, prequalify with at least three lenders. Review the loan terms carefully before selecting the best lender for your needs.