Individuals with poor credit scores can still access personal loans, though borrowing limits are typically capped at $10,000 to $15,000. Lenders prioritize risk assessment, resulting in higher interest rates and stricter eligibility criteria.
- Max loan amount for bad credit borrowers: $15,000 (common cap: $10,000)
- Average loan size for subprime applicants: $7,800 in 2026
- APR range for bad credit loans: 18% to 36%
- Required income threshold: $40,000+ for $10,000 loan eligibility
- Debt-to-income ratio cap: 40% for approval
- Default rate among subprime borrowers: over 15% annually
Borrowers with bad credit—defined as a FICO score below 600—face tighter lending standards when pursuing personal loans in 2026. Despite these challenges, several financial institutions offer loan products tailored to lower credit profiles. Loan amounts generally range from $5,000 to $15,000, with most lenders capping approvals at $10,000 for applicants with credit scores under 620. The average loan size for applicants with subprime credit is $7,800 as of early 2026, reflecting a trend toward conservative lending. Interest rates for these borrowers range from 18% to 36%, with some alternative lenders charging over 30% APR on loans exceeding $10,000. Borrowers who provide collateral or secure a co-signer may access up to $20,000, though such arrangements are less common. Lenders use multiple factors beyond credit scores, including income verification and debt-to-income ratios. Applicants earning $40,000 annually may qualify for a $10,000 loan if their monthly debt payments do not exceed 40% of gross income. Those with higher incomes or stable employment may receive slightly larger disbursements, but approval remains discretionary. Market impact is evident in the growth of non-prime lending platforms, with several fintech lenders reporting a 22% year-over-year increase in subprime personal loan originations. This expansion suggests rising demand, but also raises concerns about borrower over-leverage. Consumers should evaluate repayment capacity carefully, as default rates among subprime borrowers remain above 15% annually.