Are you trying to get personal loans for bad credit? It can be a tedious process and some lenders won’t even consider your application. Fret not, in this blog, we have listed the best lenders that offer personal loans with bad credit scores.
Applying for a personal loan can be an arduous process especially if you have a bad credit score. If you have a bad credit score (350 to 579) you won’t be able to apply for a personal loan without a co-signer. Most personal loans require a credit score of at least 670, however, there are some lenders that are a boon for individuals with bad credit. After extensive research, we have found several lenders that are willing to get you a personal loan with a credit score of 580 to 600.
However, the interest rates of personal loans are determined by your credit score and several other requirements. Therefore, it can be hard for you to get favorable rates and terms, especially if you have a poor credit score.
Note: Having a good credit score opens many avenues for you if you are trying to get a personal loan. For example, you can get lower interest rates and get multiple options to choose from. You are more than likely to receive higher interest rates on personal loans or any line of credit with a poor credit score.
Best Personal Loans for Bad Credit in 2024
After carefully researching multiple bad credit lenders, we have compiled a list of the best loans for bad credit. Keep on reading to learn more.
Avant: Best for a Range of Prepayment Options
Avant is a Chicago-based consumer lending platform that was founded in 2012. It offers secured and unsecured loans to individuals with bad credit through a third-party bank (Web Bank).
If you’re trying to get online loans for bad credit, Avant can be a suitable option for you. This lender for bad credit usually offers higher interest rates than some lenders on this list, but allows you to get a loan as quickly as the next business day. Avant also allows its borrowers to change the loan due date up to the day before the deadline.
Moreover, you can also get a secured loan if you don’t qualify for an unsecured loan. Secured loans typically get you lower interest rates but require collateral that you risk losing in case you are unable to repay the loan.
- Minimum credit requirement: 580
- APR: 9.95% – 35.99%
- Terms: 12 to 60 months
- Origination fee: Up to 4.75%
| Pros | Cons |
| Secured and Unsecured Loans Available | Charges an upfront administrative fee |
| Get quick loans as soon as the next day | Charges late and dishonored payment fee |
| The minimum credit score requirement is 580 | The loan amount is limited to $35,000 |
Upgrade: Best for Flexible Loan Amounts
Founded in 2017, Upgrade offers accessible online and mobile banking services. This lender offers loan amounts ranging from $1000 to $50,000 and charges an origination fee between 1.85% and 9.99% of the total loan amount.
This online lender offers a plethora of loan options that you can choose from. Moreover, you can get small loans for bad credit as quickly as the next business day after you have been verified. You can also register for autopay and can even get a discount on your interest rates.
Borrowers on Upgrade are also not subjected to a prepayment penalty so you can reduce the overall cost of the loan if you are able to pay it off early. Besides online loans for bad credit services, Upgrade also offers a dedicated mobile app that streamlines the lending process for borrowers and allows them to check their balances, make payments, and update their personal information.
- Minimum credit requirement: 580
- APR: 8.49% – 35.99%
- Terms: 24 to 84 months
- Origination fee: 1.85% - 9.99%
| Pros | Cons |
| Can receive quick loans as early as the next business day. | Not available in Washington DC or West Virginia. |
| Offers Autopay discount | Charges a $10 late fee and a $10 failed payment attempt fee |
| Borrowers can use loans to cover business expenses | High APR Range. |
Lending Point: Best for Loan Term Flexibility
Lending Point is a lender for bad credit based in Atlanta that offers personal loans to borrowers from over 48 states including Washington DC. This lender offers personal loans ranging from $2000 to $36,500. Moreover, Lending Point also offers some of the most flexible loan terms on this bad credit loan list, ranging from 24 to 72 months. While the minimum credit score requirement is on the higher side (640), Lending Point also evaluates your job history, financial track record, recent credit behaviour, and personal income.
However, you must have an income of $40,000 or higher to qualify for a personal loan for bad credit on Lending Point. You also can’t apply for joint or cosigned loans.
- Minimum credit requirement: 640
- APR: 7.99% – 35.99%
- Terms: 24 to 72 months
- Origination fee: 0.00% - 10.00%
| Pros | Cons |
| Can receive funds on the next business day after verification. | Doesn’t offer loans in Nevada or West Virginia. |
| The approval process doesn’t rely solely on the credit score | Must have a minimum annual income of at least $40,000 |
| No prepayment penalty | Origination fee up to 10% |
Upstart: Best for Quick Approvals
Upstart is not your average lender for bad credit. One of the best selling points of this lender is that it leverages artificial intelligence and machine learning algorithms to determine borrower qualification. The minimum loan amount you can get is based on where you live. Upstart doesn’t offer its services in West Virginia or Iowa.
Moreover, this lender offers small loans for bad credit with a score as low as 300. It also offers a wide range of loan options ranging from $1000 to $50,000. The application process is seamless and makes it easier for individuals with thin credit histories to qualify for a personal loan. This is because Upstart takes several factors into account including your level of education, employment history, and areas of study.
- Minimum credit requirement: 300
- APR: 5.20% – 35.99%
- Terms: 36 and 60 months
- Origination fee: 0.00% - 12.00%
| Pros | Cons |
| Loans can be used for education-related expenses. | Not available in West Virginia or Iowa. |
| Accessible to borrowers with decent credit score | Limited loan terms |
| Can choose a custom payment date | Charges an origination fee of up to 8% of the total loan amount. |
Lending Club: Best for Applying with a Co-borrower
Founded in 2007, Lending Club is the largest online lending platform on this list of bad credit loans. It has worked with over 3 million customers and offered more than $55 billion in loans. Unlike some other lenders for bad credit on this list, Lending Club also allows borrowers to apply for a personal loan with a co-borrower.
While Lending Club provides high APRs and no discount on autopay, it also offers flexible loan options ranging from $1000 to $40,000. The loan terms are a little less flexible and are limited to three or five-year plans. Moreover, borrowers also incur an origination fee between 3% and 8% of the total loan amount.
- Minimum credit requirement: 600
- APR: 9.57% – 35.99%
- Terms: 36 to 60 months
- Origination fee: 3.00% - 8.00%
| Pros | Cons |
| 15-day grace period in case of late payments | Charges an origination and late fee |
| Allows co-applicants | High APR Range |
| Available to individuals with decent credit scores | Borrowers in Iowa and U.S. territories are not eligible. |
Read Also:- A Complete Overview: Credit Builder Loan
OneMain Financial: Best for Secured Loans
If you are trying to get a personal loan with bad credit, OneMain Financial offers both secured and unsecured loan options for borrowers. It has one of the lowest loan amount caps on this list of bad credit lenders, making it the suitable option for small bad credit loans. It is also regarded as one of the best options for secured loans.
While OneMain Financial’s interest rates are on the higher end, they are lower than most bad credit lenders and loan sharks. The lender also charges a late payment fee ranging from $5 to $30, or a percentage of the entire monthly payment. Moreover, One Main Financial also takes several factors into account such as personal financial history, credit history, annual income, geography, and whether you have filed for bankruptcy.
- Minimum credit requirement: Not specified
- APR: 18.00% – 35.99%
- Terms: 24 to 60 months
- Origination fee: 1.00% - 10.00%
| Pros | Cons |
| Both secured and unsecured loans are available | APR is on the higher end |
| Can change your loan payment due date | Charges late fee |
| No prepayment fee | The loan cap amount is on the lower end ($20,000) |
Happy Money: Best for Avoiding Unnecessary Charges
Happy Money is a bad credit lender and offers personal loans for bad credit specifically to pay off credit card debts. If you have a poor credit score, you may not be eligible for the lowest interest rates, but the personal loan rates are still lower than your credit card.
In order to qualify for a personal loan with this lender, you have to fulfil the following criteria-
- A debt-to-income ratio of less than 50%
- At least three years of credit history
- No record of delinquencies
- Minimum credit score of 640
After verification, you can get your loan within three to six business days. However, one of the best features of Happy Money is that besides its origination fee, it doesn’t charge any late payment fee, prepayment fee, or application fee.
- Minimum credit score: 640
- APR: 11.52% – 24.81%
- Terms: 24 to 60 months
- Origination fee: 0.00% - 5.00%
| Pros | Cons |
No application or late fee | Takes three to six business days to credit the loan amount |
| Offers lower interest rates than credit cards | No joint applications |
| Transparent eligibility requirements | Loans can only be used to pay off credit cards. |
Best Egg: Best for Secured Loans
Best Egg emerges as one of the best platforms for secured loans. Most lenders do not offer secured personal loans for bad credit. But Best Egg allows consumers with bad credit to apply for lower rates by using their home fixtures as collateral. However, in order to qualify for a secured loan, you will need to be a homeowner
Plus, you can also get an unsecured loan at this bad credit lender. Best Egg offers unsecured loans at higher APRs ranging from 8.99% to 35.99%.
- Minimum credit score: 600
- APR: 5.99% – 29.99%
- Terms: 36 to 84 months
- Origination fee: 0.99% - 8.99%
| Pros | Cons |
| With secured loans, home fixtures are collateral | Charges an origination fee |
| Flexible repayment terms | Can lose home fixtures if you fail to make regular payments |
| Offers unsecured loans | Consumers must own a house to qualify for a secured loan |
Universal Credit: Best for Multiple Options
If you are looking for multiple personal loans for bad credit, you should definitely check out Universal Credit. It offers personal loans between $1000 to $50,000 through its partners.
While Universal Credit offers personal loans for bad credit, it does have some shortcomings. Firstly, it charges high APRs that are well above the market average. Secondly, it also charges a 5.25% to 9.99% origination fee for all personal loans.
Repayment terms range from 3 to 7 years.
- Minimum credit score: 580
- APR: 11.69% to 35.99%
- Terms: 3 to 7 years
- Origination fee: 5.25% - 9.99%
| Pros | Cons |
| Easy to qualify for a personal loan | High APRs |
| Next-day funding | A high origination fee of 5.25% - 9.99% |
| No prepayment penalty |
What are Personal Loans for Bad Credit?
When lenders receive an application for a personal loan, they evaluate various factors including your credit score to determine your creditworthiness. More often than not, lenders require a minimum credit score of 580 to qualify for a personal loan. However, some lenders offer personal loans for bad credit, meaning you can still qualify for a loan even with a poor credit score.
Bad credit loans are particularly for individuals with a credit score of 579 or less. While there are many types of loans for bad credit, unsecured personal loans are the most common. However, these loans typically come with higher interest rates and APRs than traditional loans due to poor credit history.
How to Compare Personal Loans for Bad Credit?
While it can be tough to get a loan for bad credit, there are multiple options available online. Here is how you can compare different bad credit loans.
Compare the Range of Interest Rates
Since interest rates largely depend on your credit score, you are likely to land on the top end of the range if you have bad credit. When comparing loans with bad credit, make sure to compare the maximum rate.
Prequalify with a Lender
If possible, you can try to prequalify with a lender. Most lenders offer the opportunity to prequalify for a personal loan. This will allow you to learn about loan limits, rates, and repayment options. All you need is to submit details like income statement, desired loan use, and housing situation. Moreover, prequalifying only requires a soft credit check which doesn’t affect your credit score.
Check for Additional Fee
While some lenders don’t charge any hidden fees, most lenders charge origination fees, late payment fees, prepayment fees, and more. When comparing personal loans for bad credit, ensure to check the fee structure and hidden fees besides the potential interest rate you receive.
Customer Support Options
One of the most important things to check before signing the loan agreement is the customer support services provided by the lender. While it may not seem like a big deal, it can be a boon if you encounter payment issues or face financial hardships during your loan tenure.
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How to Get a Loan for Bad Credit?
While it is possible to get a personal loan for bad credit, it is recommended to work on your credit and get better interest rates. However, if you still need to get an online loan for bad credit, here is how you can get one.
Track your Credit Score
First and foremost, it is important to track your credit score to determine which lenders you qualify for. If you have a bad credit score, you can find ways to improve your credit score online. Your credit score is generated by the information in your credit report. You can also request your credit report from AnnualCreditReport.com.
Find Lenders that Consider More than Credit Score
It will be easier to qualify for a personal loan with lenders that don’t evaluate your creditworthiness solely on your FICO score. For example, some lenders also evaluate various factors like income, education level, employment history, housing, etc.
Prequalify for Loan
You can prequalify for a loan online and check whether you will be approved for a loan and what rates you are eligible for. Don’t be alarmed as it is only a soft credit check and won’t affect your credit score. This is one of the best ways to explore your options and determine how much it will cost you in the long term.
Compare Loan Offers
After you have received personal loan offers, the most important thing to do is compare the offers and select the option most suited to you. This means reviewing interest rates, APRs, lender fee structure, and available loan terms.
Submit an Application
After finding the best option, you have to submit a formal application. It will trigger a hard inquiry which will temporarily affect your credit score. Once approved, the loan amount will be credited to your account in a few business days. If your application is denied, you will be notified of the factors that contributed to the rejection of your application.
Types of Personal Loans for Bad Credit
Traditionally, there are two types of bad credit loans- secured loans and unsecured loans. However, there are some other options for loans for bad credit.
Secured & Unsecured Bad Credit Personal Loans
Traditional personal loans are either secured or unsecured.
Secured loans require you to provide something of value as collateral like your house, car, or other valuables to secure the loan. If you fail to make regular payments, the lender will repossess the collateral.
This is also the reason why these types of loans come with favorable terms like lower interest rates and fewer qualification requirements.
On the other hand, unsecured loans do not require any collateral. Since there is no collateral involved, these loans have higher qualification requirements and interest rates than secured loans. All the loans on this list are unsecured personal loans for bad credit.
Student Loans for Bad Credit
Student loans for bad credit are one of the best options to cover those educational expenses. However, private student loans require good credit to qualify. If you have a poor credit score, you can get a federal student loan, which typically does not require a credit check.
Moreover, with federal student loans, you get various perks like flexible repayment terms, and relief if you work in public service or choose certain repayment plans.
Auto Loans for Bad Credit
As the name suggests, an auto loan is a type of personal loan that uses a vehicle as collateral. If you fail to make regular payments, the lender can repossess your vehicle. Much like personal loans for bad credit, the qualification requirements for auto loans depend from lender to lender.
While it is best to have a credit score of at least 670 to get decent loan terms, you can still get one if you have a poor credit score as long as you meet the debt-to-income requirements.
Payday Loans for Bad Credit
Payday loans are smaller short-term loans that you repay as soon as you get your next paycheck. Most of these loans do not require a credit check, which is great for people with bad credit scores.
However, that does not make this a good option. Payday loans generally come with sky-high fees and a lot of risk. It is best to explore personal bad credit loans before you resort to payday loans.
Home Equity Loans for Bad Credit
Home equity is calculated by subtracting your remaining mortgage balance from your home’s current market value. If you have enough home equity in your home, you can get a home equity loan or a home equity line of credit(HELOC).
Both options let you borrow against your house. This means that if you fail to make payments, the lender can repossess it. However, it is hard for people with bad credit scores to qualify for these loans. Most lenders require a credit score of at least 600 to 620. You can find a special lender who is willing to make an exception but it is not very common.
If you have a credit score of less than 600, you might have to opt for hard money lenders like private investors. While they are more flexible, they are also quite expensive.
Read Also:- Best Mortgage Lenders for Bad Credit
How to Identify Bad Credit Loan Scams?
While many good lenders offer personal loans to people with bad credit, there are also some individuals who take advantage of such borrowers. Scammers and fraudsters specifically target people with poor credit scores as they typically have fewer options. Here is how you can identify how someone is scamming you-
- Requires you to pay a fee upfront before getting the loan
- Advertising campaigns like “no credit check.”
- Unsolicited and unwanted phone calls from someone offering you a loan
- No fee disclosure before applying
- Lack of reviews or fake reviews
- The lender does not possess a valid license
- Names with copied logos or grammatical errors. For example- JP Morgan Chase instead of the actual JPMorgan Chase.
Final Words
While it is a tedious process to get a personal loan with bad credit, there are plenty of lenders that offer personal loans to individuals with bad credit. Getting a personal loan can actually help you boost your credit score by enhancing your credit mix. However, you must remember to make timely payments each month. If you default on payments and fail to repay the loan, you can lose your collateral and get negative marks on your annual credit reports.
We have listed the best lenders for bad credit in this blog. You can choose the one that is most suitable for you.
Frequently Asked Questions(FAQs)
Ans. Typically, it is better to have no credit than to have a bad credit score. A bad credit score indicates that a borrower has a history of defaulting on payments or has a low debt-to-income ratio, which makes them a credit risk for the lenders. Whereas having no credit score simply means that you have no credit history. While most lenders don’t entertain individuals with no credit score, there are plenty of products and services, particularly for first-time borrowers.
Ans. There are many factors that make up a bad credit score. However, the two biggest factors include payment history and the total amount you owe. Missing your payments can also negatively impact your credit score, the damage exponentially increasing the longer your payment is delayed.
Ans. After you submit a loan application, the lender will request a copy of your credit report from one of the three major credit bureaus. This request is known as a hard inquiry and temporarily lowers your credit score by a small margin. While hard inquiries remain in your credit report for two years, their impact on the credit score only remains for a single year.
Ans. Most borrowers do not accept applications from borrowers with low credit scores. However, some lenders accept applications with a co-signer- someone who agrees to pay the loan if the primary borrowers cannot.
Ans. If you have a bad credit score and want to qualify for a loan, you can take some time to improve your credit score. Some easy ways to do that are to pay off your existing debts, reduce your overall credit usage, and make regular timely payments.
