Business Insider's personal finance team compared the best personal loans for bad credit, and we'll cover our top picks below.
Your credit score is a key factor in getting a personal loan. If it's too low, some lenders may decide you pose too great a risk and decline to lend you money.
However, it may still be possible to qualify for a personal loan even if your credit isn't in the best shape. The best personal loans for bad credit can provide financial flexibility, allowing you to address needs like debt consolidation, unexpected expenses, or home repairs. Responsible repayment of these loans can also contribute to rebuilding your credit over time.
Remember that even the best personal loans for low credit scores will come with higher interest rates compared with loans for borrowers with good credit. But they can be much safer than other alternatives often resorted to by those with bad credit, such as payday loans, which have exorbitantly high interest rates and can trap you in a cycle of debt.
Best Personal Loans for Bad Credit
- Best for small loan amounts: Upgrade Personal Loan
- Best for easy qualification: Avant Personal Loan
- Best for low credit scores: LendingPoint Personal Loan
- Best for limited credit histories: Upstart Personal Loan
- Best for applying with a co-borrower: LendingClub Personal Loan
- Best for secured loans: OneMain Financial Personal Loan
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Best bad credit loan for small loan amounts
9.99% to 35.99%
$1,000 to $50,000
580
- Small minimum loan amount
- Quick access to funds
- Low minimum credit score
- Origination and late fees
Upgrade is a solid lender if you can qualify for its lowest interest rate. But if your credit isn't in great shape, you may be able to find a better deal elsewhere.
Upgrade Personal Loan- Loan amounts range from $1,000 to $50,000
- Loan term lengths range between 2 to 7 years
- You can get your money within one business day after your loan is reviewed and approved
- Loans made by Upgrade's lending partners
Upgrade offers a low minimum APR. But you'll likely pay a higher rate if your credit isn't in good shape. With a poor credit history, you may end up paying an APR closer to 35.99%. Upgrade's smallest loan amount of $1,000 is lower than many other comparable lenders.
You'll pay an origination fee with Upgrade, which will be taken from your loan proceeds. Upgrade may also charge you a late fee of up to $10. However, you won't pay any prepayment penalties with this lender. Once you accept your loan offer, you should get your funds as soon as the next business day.
Best bad credit loan for easy qualification
9.95% to 35.99%
$2,000 to $35,000
600
- Funds generally deposited by the next business day
- No prepayment penalty
- Multiple types of fees
- High maximum APR
- Low maximum loan limit
Avant Personal Loan is a good personal loan provider, especially if you have a lower credit score and need to receive your loan money quickly. Just be prepared to pay a high APR if you do have a low score.
Avant- Loan amounts range from $2,000 to $35,000
- Loan term lengths range between 2 to 5 years
- Administration fee of up to 4.75%, which will be deducted from your loan proceeds when the loan is funded, and late fee that varies by state
- Loans made by WebBank, member FDIC
Avant is one of the easier lenders to qualify for on our list. The lender states that the minimum credit score is just a guideline and not a requirement, but most Avant borrowers have a credit score between 600 and 700. Avant funds loans quickly — if the company approves your loan by 4:30 p.m. CT Monday through Friday, funds are often put into your account by the next business day.
Avant has excellent customer service hours, with its phone line open at least 13 hours every day of the week. The lender also has a strong mobile app.
Best bad credit loan for low credit scores
7.99% - 35.99%
$2,000 to $36,500
620
- Low minimum credit score required
- No prepayment penalties
- Restrictive loan amount range
- Origination fees
- No loans in Nevada or West Virginia
LendingPoint is a solid option if you need to get a loan with bad credit or you don't qualify for a loan with another lender. However, the range of loan amounts is more limited than what other lenders offer, and if you have good credit, you can likely get a better rate elsewhere.
LendingPoint Personal Loans- Loan amount range $2,000 to $36,500
- Loan term lengths range from 24 to 60 months
- Loans made by FinWise Bank, member FDIC
LendingPoint claims to look beyond your credit score, making it a good option if you can't qualify for other lenders with your credit score. LendingPoint has a quick application process, and you may be approved within one to three business days. You can often get your funds the next business day after approval.
Unfortunately, you're not able to take out a loan if you live in Nevada or West Virginia. You also can expect to pay an origination fee of up to 10%, depending on the state you live in.
Best bad credit loan for limited credit histories
6.70% to 35.99% fixed
$1,000 to $50,000 (borrowers in four states are subject to higher minimum loan amounts: Massachusetts: $7,000, Ohio: $6,000, New Mexico: $5,100, Georgia: $3,100)
300
- Small minimum loan amounts
- No prepayment penalty
- Quick loan fund disbursement
- Only three and five year terms
- Potential for high origination fees
Upstart could be the right lender if you have a strong work and education history, but you have a low credit score or limited credit history. The best personal loan for you depends on your credit score, which will determine what you qualify for and can lower your rate.
Upstart- Loan amounts range from $1,000 to $50,000. However, borrowers in four states are subject to higher minimum loan amounts: Massachusetts: $7,000, Ohio: $6,000, New Mexico: $5,100, Georgia: $3,100
- Loan term lengths are either 3 or 5 years
- Can have origination fees up to 8%
- Considers employment and education history when making loan approval decisions
- Loans are made through one of several Upstart-powered bank partners
Upstart has the lowest minimum credit score requirement of any of our top picks, at 300, but if your credit score is low, you might end up paying a high APR. However, Upstart also considers employment history and education history, such as where you went to school and your area of study, when making its lending decisions, which could help borrowers who may not qualify for a loan solely based on their credit score.
Upstart's loan repayment term options are fairly limited — you can choose between a three-year or five-year term. On the bright side, the company usually funds loans within one business day, which is useful if you need your money fast. There are no prepayment penalties with this lender.
Best bad credit loan for applying with a coborrower
9.57% to 36.00%
$1,000 to $40,000
600
- Low minimum loan amount
- Can add co-borrower to loan application
- No prepayment penalties
- Multiple types of fees
- High maximum APR
- Slower access to funds
LendingClub is a solid personal loan provider, especially if you have a lower credit score and want to add a co-borrower to boost your chances of a better rate. However, you could be charged high rates and fees compared to competitors.
LendingClub- Origination fee between 3% to 8%
- You'll get access to your funds within two to four business days
- Loan amount range between $1,000 to $40,000
- Loan terms are between 24 months and 60 months
- Loans made through either WebBank, Member FDIC or LendingClub Bank, N.A., Member FDIC
LendingClub allows you to add a coborrower to your loan application. So, if you're worried about not qualifying for a loan or paying a higher interest rate than you can afford, you may consider this option.
However, it will take a few business days to get your money, which is longer than most of the other lenders on our list. You'll also pay an late fee of 5% of the minimum payment amount or $15 (whichever is greater) of your total loan amount.
Best bad credit loan for secured loans
18.00% to 35.99%
$1,500 to $20,000
None
- No minimum credit score
- Small minimum loan amount
- Quick loan funding
- High interest rates
- High origination fees
- Low maximum loan amount
OneMain Financial's personal loans are a solid option for borrowers who have low credit scores . You may want to consider another company if you have a good credit score, because you can get lower rates elsewhere.
OneMain Financial personal loan- No minimum credit score for approval
- You may be able to get your loan on the same day that you apply
- Loan amounts range from $1,500 to $20,000
- Term lengths of 24, 36, 48, or 60 months
- Loans made by OneMain Financial Group, LCL
- Terms apply. See rates and fees for details and restrictions at https://www.onemainfinancial.com/legal/loan-fees.
OneMain Financial's minimum APR is higher than every other lender on our top picks, but there is no minimum credit score required to apply. If your credit is in particularly rough shape, it may be easier to qualify for a loan with this lender. You may also be able to get your money the same day you apply.
OneMain's standout feature is that it offers secured personal loans (loans backed by collateral such as a house or a car) as well as unsecured personal loans. This is uncommon among personal loan lenders.
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How to Get a Loan With Bad Credit
If you're looking for a personal loan and have bad credit, you'll want to stick to lenders that allow you to prequalify for a loan. This allows you to compare interest rates and terms available without affecting your credit score. This is usually a fast process, so you should do so with several lenders.
After you've prequalified, compare the offers and choose the one that best suits your needs. To complete the full loan application process you'll need documentation, including paperwork like:
- Pay stubs/proof of income
- W-2 forms or tax returns
- Documentation of 401(k)s and other financial accounts
- Photo ID
- Rent/mortgage payment history
- Proof of collateral (if you're pursuing a secured loan)
If you're approved for the loan, the lender will send you the final loan documents to sign off on. Make sure to read everything carefully to understand exactly how much you'll be paying in total for the loan, and be absolutely certain you can afford the monthly payments. Some lenders offer financial tools and resources, such as a loan calculator, to help you determine if loan payments will fit into your budget.
Bad Credit Loan Company Trustworthiness
Whether you're looking for a $5,000 loan or a $10,000 loan, finding a trustworthy lender can help improve your loan experience. To help you make a decision, we've compared each institution's Better Business Bureau score. The BBB measures businesses based on factors like their responsiveness to consumer complaints, truthfulness in advertising, and clarity about business practices. Here is each company's score:
Personal Loan BBB Rating
- Upgrade Personal Loan: A+
- Avant Personal Loan: A+
- Upstart Personal Loan: A+
- OneMain Financial Personal Loan: A-
- LendingClub Personal Loan: A+
- LendingPoint Personal Loan: A+
All of our top picks are rated A- or higher by the BBB. Keep in mind that a high BBB score does not guarantee a positive relationship with a lender and that you should continue to do research and talk to others who have used the company to get the most comprehensive information possible.
Other Loan Options for Bad Credit
Some personal loan lenders, such as Best Egg and OneMain, may accept collateral for a secured loan, which may get you a lower interest rate. However, most lenders focus on unsecured loans, which are based entirely on your creditworthiness. Secured loans may get you a lower interest rate, but it's important to remember that you risk losing your collateral if you end up in a position where you can't afford the monthly payments. This can be financially devastating if you were to put up your car as collateral.
Another bad credit loan alternative worth considering is a joint personal loan or coborrower loan. This means that you find someone to take out the loan with you (ideally with a better credit score). The main benefit of having a co-borrower is that you may qualify for better loan terms because both your credit scores and income will be taken into account during the loan application process. The drawback to this type of loan is that both you and your coborrower will be negatively affected if you fail to repay the loan.
Avoiding Loan Scams
It's important to watch out for predatory lenders that target borrowers with bad credit with loans at exorbitant interest rates that can trap you in a cycle of debt. A common red flag is when a lender pressures you to "act immediately." A reputable lender understands that the decision to take out a personal loan requires time.
Cash advances and payday loans are among the most frequently seen examples. They're advertised as fast and helpful ways to get money to cover an unexpected expense without requiring a credit check. However, these borrowing methods often end up saddling borrowers with loan terms and interest rates that severely damage their long-term financial health. Car title loans, which allow the lender to take ownership of your car if you can't pay, are also frequently associated with predatory lending.
Improving Your Credit With a Loan
Getting a personal loan with bad credit can help you improve your credit score. While it may sound counterintuitive, there are several ways this can happen based on how credit scores are calculated.
For example, when you make payments on a loan, they're reported to the major credit bureaus. Your payment history accounts for more than a third of your overall credit score, so making your payments on time will have a positive impact.
If you use a personal loan for debt consolidation, it can also help improve your score. With a debt consolidation loan for poor credit, you roll multiple debts into a single loan with one monthly payment. This can reduce your credit utilization ratio, which determines about 30% of your credit score.
How to Choose a Personal Loan When You Have Bad Credit
To get the best personal loan for bad credit scores, consider what is most important to you. Many borrowers prioritize the lowest personal loan interest rate but also consider any fees, the minimum credit score needed, and the accessibility of the lender's customer service. You'll also want to make sure you're able to select a term length that works for you and that your loan's purpose is allowed by the lender you choose. Depending on your situation, you might also look for loans for bad credit with instant approval so you can get the funds as soon as possible.
See the latest personal loan interest rates »
For bad or poor credit loans specifically, you'll want to understand if you qualify for a loan or if you may need to add a cosigner to boost your chances of being eligible.
Why You Should Trust Us: How We Reviewed Loans for Bad Credit
Each personal loan we review has a numerical rating on a 1-5 scale. This rating is a weighted average taking into account several important criteria for choosing the best loan for you: interest rates, fees, term lengths, funding speed, and more.
Each category's weighting is based on its importance to your borrowing experience. Rates and fees have the most direct impact on the overall cost of your loan, so we weigh those the most heavily. See our personal loan rating methodology page to learn more.
FAQs
Which loan is easiest to get with bad credit?
To get a loan with bad credit, your best bet and easiest option is one that is either secured with collateral or one in which you have a more creditworthy borrower cosign with you. That way, the lender will have less risk of not getting its money back.
Are bad credit loans legitimate?
Personal loans for bad credit with a reputable lender are safe. Search for personal loans that are backed by a Member FDIC bank or NCUA-accredited credit union. Also, familiarize yourself with common personal loan scams so you know how to avoid them.
What are alternatives to bad credit loans?
While a bad credit loan can be a solid option to get money fast, there might be cheaper avenues available to you, including: borrowing from friends or family; getting a paycheck advance; seeking aid from a local nonprofit or charity.
Can I get a bad credit loan online?
You can get a loan online even if you have bad credit. Lenders including Avant, LendingPoint, and Upgrade, are among those that offer bad credit loans online.
What is the lowest credit score you can have and still get a loan?
Some lenders, such as Upstart, claim that you only need a credit score of 300 to receive a loan. However, most lenders require a credit score of around 600 to qualify for a bad credit loan.
OneMain Financial Personal Loan disclosure: Not all applicants will be approved. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral) and your state of residence. If approved, not all applicants will qualify for larger loan amounts or most favorable loan terms. Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. APRs are generally higher on loans not secured by a vehicle. Highly-qualified applicants may be offered higher loan amounts and/or lower APRs than those shown above. OneMain charges origination fees where allowed by law. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $500. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Visit omf.com/loanfees for more information. Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB's Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase cryptocurrency assets, securities, derivatives or other speculative investments; or for gambling or illegal purposes. Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: $3,100. North Dakota: $2,000. Ohio: $2,000. Virginia: $2,600. Borrowers in these states are subject to these maximum loan sizes: North Carolina: $9,000 for unsecured loans to all customers, $9,000 for secured loans to present customers. Maine: $7,000. Mississippi: $15,000. West Virginia: $14,000. Loans to purchase a motor vehicle or powersports equipment from select Maine, Mississippi, and North Carolina dealerships are not subject to these maximum loan sizes. Example Loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07. Time to Fund Loans: Funding within one hour after closing through SpeedFunds must be disbursed to a bank-issued debit card. Disbursement by check or ACH may take up to 1-2 business days after loan closing.
