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Best Installment Loans For Bad Credit

When you have bad credit, your loan options are limited. Many turn to predatory payday loans to get the cash they need. But that’s not the only option. Installment loans for bad credit present another opportunity to access funding quickly.

Best Installment Loans For Bad Credit
Eric Rosenberg
Financial Writer

When you have bad credit, your loan options are limited. Many turn to predatory payday loans to get the cash they need. But that’s not the only option. Installment loans for bad credit present another opportunity to access funding quickly.

The best installment loans for bad credit offer borrowers a more affordable option when compared to payday loans. Instead of paying sky-high interest rates and fees, online installment loans provide the funding you need without requiring a good credit score. But even with installment loans, you still need to watch out for high interest rates and fees. Take the time to shop around for a loan that offers you the best interest rates and fees. Shopping around can save you thousands!

Luckily, shopping around doesn’t need to be too challenging. Our team of financial experts reviewed and ranked more than 30 online lenders to help you get funded.

Our Top Picks for Best Installment Loans For Bad Credit

 upgrade_logo
  • Funding as soon as the next day
  • Can be approved with fair credit
  • Variety of discounts on rates
Min. Credit Score
Min. Credit Score Not disclosed
Loan Amounts
Loan Amount $1K-$50K
Est. APR
Loan Repayment 24 to 84 months
upstart review
  • Loans can be funded in one busines day
  • Prequalification with a soft credit check
  • Accepts borrowers with fair credit
Min. Credit Score
Min. Credit Score 600+
Loan Amounts
Loan Amounts $1K-$50K
Est. APR
Loan Repayments 36-60 months
universal-credit_logo
  • Fixed interest rates
  • Get money to your bank in just one day
  • Quick online application
Min. Credit Score
Min. Credit Score Not Disclosed
Loan Amounts
Loan Amount $1K-$50K
Est. APR
Loan Repayment 3-6 years

How to Choose the Best installment Loan for Bad Credit?

When choosing the best installment loan for bad credit, there are several key factors. Although our experts have curated a list, it’s important to know what makes a good or bad installment loan. Our experts used these parameters to rank lenders, and you can too:

  • Loan Features - The loan amounts offered and loan use limitations are a big consideration. You want to ensure you can borrow enough and can spend it on the purpose you have in mind. Additionally, look at the loan terms to ensure the monthly payments fit into your budget.
  • Interest rates and fees - The interest rate and fees will determine how much it costs to borrow the funds. Watch out for prepayment penalties and factor origination fees into your budget. If you see a triple-digit interest rate, steer clear.
  • Application process - The invasiveness of the application requirements and the funding speed will play a big role in your choices. Also, check if the lender will perform a soft-pull or hard-pull on your credit score.
  • Qualification process - Look over the qualification process. Make sure you need the minimum credit score, income, and membership requirements before applying.
  • Customer support - If you have questions about your loan, find out who you can contact. Generally, a live customer service representative and multi-channel support options are ideal.
  • Online user reviews - Find out what actual customers say through independent review sites like Trustpilot.
  • Perks and Bonuses - Determine what special offerings the lender provides. A few perks include payment flexibility, advertising transparency, and advanced technology.

Best Installment Loans for Bad Credit in 2022 - Full Overview

After careful review by our experts, we’ve narrowed the list of the best installment loans for bad credit. Let’s take a closer look at the top options on the market today for bad credit borrowers.

1. Upgrade - Best for debt consolidation

Upgrade offers personal loans with set repayment terms. Although you can manually pay this bill each month, you have the option to set up automatic payments. If the original due date doesn’t work for you, Upgrade lets you customize the due date. With no prepayment penalties to worry about, you can make extra payments when possible. The relatively high loan amounts and one-day funding make it an ideal choice for debt consolidation. It’s an especially good choice if you have multiple credit card balances with high interest rates attached. You can consolidate all of those variable loan payments into a single loan payment with a lower interest rate attached.
Pros
Rate discount for checking account users
0.5% autopay discount
High Trustpilot score
Allows joint loans
One-day funding
Cons
Steep origination fees
No co-signers allowed

upgrade

As you consider your options, here’s a quick look at Upgrade’s features:

  • Loan terms: Two to seven years
  • Loan amounts: $1,000 to $50,000
  • Interest rates: 5.94% to 35.97%, with Autopay as of June 2022
  • Credit score requirements: 560
  • Prepayment fee: N/A
  • Origination fees: 2.9% to 8%
  • Late payment fees: Up to $10 if your payment is not received within 15 days of the due date
  • Income requirements: N/A
  • Turnaround time: One-day funding available, after your application is approved.
  • Loan uses: Major purchases, home improvement, refinancing credit cards, and debt consolidation

The Bottom Line

Upgrade offers installment loans that can help you cover a variety of financial needs. But the lender is the best fit for borrowers looking to consolidate debt. With one manageable payment, you might be able to reduce the amount you pay for interest.

2. Upstart- Best for those with no credit

If you don’t have a credit score at all, accessing funding is very challenging. But with Upstart, you won’t need a credit score to apply. Instead, the lender will willing to work with borrowers who don’t have enough information on their credit reports for a score. Plus, they work with borrowers who have a credit score as low as 300. As a note, Upstart is not available in Colorado, Connecticut, Iowa, New York, Nevada, Maine, Maryland, Vermont, West Virginia, or Washington D.C. Here’s what to keep in mind with Upstart:
Pros
Next business day funding
Accepts borrowers with no credit
Accepts borrowers with 300 credit score
Cons
Must have a regular source of income
Origination fee of up to 8%
Can only choose between two loan terms

upstart

Here’s a quick look at Upstart’s features:

  • Loan terms: Three or five years
  • Loan amounts: $1,000 to $50,000
  • Interest rates: 5.4% to 35.99%, as of June 2022
  • Credit score requirements: 300. Also accepts applicants with no credit score
  • Prepayment fee: N/A
  • Origination fees: 0% to 10% of the loan amount
  • Late payment fees: 5% of the unpaid amount or $15, whichever is larger if your payment isn’t received within 15 days of the due date.
  • Income requirements: Must have a full-time job, a full-time job offer starting in 6 months, a part-time job, or another regular source of income
  • Turnaround time: Next business day funding available, after your application is approved.
  • Loan uses: Major purchases, weddings, vacations, home improvements, medical costs, debt consolidation, and more.

The Bottom Line

Upstart offers a large range of loan amounts. But the real appeal is that it works with borrowers that don’t have a credit score at all. If you have a thin credit file or low credit score, this lender is one of the best options out there.

3. Universal Credit - Best for large loan amounts

Universal Credit is a subsidiary of Upgrade. So, you’ll find that Universal Credit loans share similarities with Upgrade loans. With a maximum loan amount of $50,000, you can cover most personal loan funding needs through Universal Credit. Here’s what to keep in mind with Universal Credit:
Pros
One business day funding available
Autopay discount available
Can adjust your payment date
Cons
Origination fee of up to 8%
Relatively high APRs

universal credit
Here’s a quick look at Universal Credit’s features:

  • Loan terms: Three to five years
  • Loan amounts: $1,000 to $50,000
  • Interest rates: 8.93% to 35.93%
  • Credit score requirements: No minimum requirement listed
  • Prepayment fee: N/A
  • Origination fees: Up to 8%
  • Late payment fees: Up to $10 if your payment is not received within 15 days of the due date
  • Income requirements: N/A
  • Turnaround time: One-day funding available, after your application is approved.
  • Loan uses: Major purchases, weddings, vacations, home improvements, medical costs, debt consolidation, and more.

The Bottom Line

Universal Credit offers an easy way to compare multiple loan offers. Its partner banks and lenders will originate the loans you secure through the platform. But you can easily see what loan options you have available.

4. Oportun- Best for small loan amounts

Sometimes you just need a small loan to make ends meet. Instead of resorting to a payday loan with triple-digit interest rates, a personal loan through Oportun with a reasonable interest rate is a better option. You can borrow between $300 to $10,000 through this lender. And you won’t find any interest rates higher than 35.99%. Here’s what to keep in mind with Oportun:
Pros
One business day funding available
Autopay discount available
Can adjust your payment date
Cons
Origination fee of up to 8%
Relatively high APRs

oportun

Here’s a quick look at Oportun’s features:

  • Loan terms: 12 to 52 months, varies by state
  • Loan amounts: $300 to $10,000
  • Interest rates: Up to 35.99%
  • Credit score requirements: None
  • Prepayment fee: N/A
  • Origination fees: Applies to loans, but different fee amount in each state
  • Late payment fees: Up to $10 if your payment is not received within 15 days of the due date
  • Income requirements: N/A
  • Turnaround time: Same day funding available, after your application is approved.
  • Loan uses: Home improvements, car repairs, rental deposits, medical bills, and more

The Bottom Line

If you are looking for a smaller loan with reasonable interest rates, Opportun is a great option.

5. Fiona - Best for comparison shopping

Fiona is not a lender. But the comparison shopping platform can help you easily compare multiple loan options in a single place. The comparison tool uses a soft credit check, so it won’t hurt to explore your options. After a few quick questions, you’ll see the available rates and loans. If you accept an offer, you’ll finalize the application process directly with the lender. Here’s what to keep in mind with Fiona:
Pros
Compare multiple loan options in one place
Simple search tool
Soft credit check
Cons
Not a direct lender
Must finalize your application with a lender

fiona
Here’s a quick look at Fionas’s features:

  • Loan terms: Varies based on lender
  • Loan amounts: Varies based on lender
  • Interest rates: Varies based on lender
  • Credit score requirements: None
  • Prepayment fee: Varies based on lender
  • Origination fees: Varies based on lender
  • Late payment fees: Varies based on lender
  • Income requirements: Varies based on lender
  • Turnaround time: One-day funding available, after your application is approved.
  • Loan uses: Home improvements, car repairs, rental deposits, medical bills, and more

The Bottom Line

Fiona makes it easy to shop for a personal loan. A little bit of shopping could save you a substernal amount of money in interest payments.

Try Fiona

6. Avant - Best for customer support

Avant doesn’t list a minimum credit score requirement. But the company says it is willing to work with customers at various points of the credit spectrum. After you obtain a personal loan, it’s nice to know there is customer support to walk you through any questions. With Avant, you don’t have to worry about being left in the dark when you have personal loan questions. The high Trustpilot score of 4.7 out of 5 stars shows that most customers are happy with their experience. In fact, just 7% of customers gave Avant an average or below rating. As an important note, Avant paid a settlement to the Federal Trade Commission in 2019 due to allegations that Avant was mistreating its customers. The lawsuit detailed overcharging for the loans and charging inappropriate late fees. But the high customer ratings of Avant seem to make this mistreatment a thing of the past. Here’s what to keep in mind with Avant:
Pros
Next day funding available
Soft credit check to prequalify
No minimum credit score requirement
Cons
High administrative fee
No co-signers allowed

avant
Here’s a quick look at Avant’s features:

  • Loan terms: 24 to 60 months
  • Loan amounts: $2,000 to $35,000
  • Interest rates: 9.99% to 35.99%
  • Credit score requirements: No minimum requirement listed
  • Prepayment fee: N/A
  • Administration fees: Up to 4.75%
  • Late payment fees: $25 if overdue by 10 days
  • Income requirements: N/A
  • Turnaround time:  Next business day funding available, after your application is approved.
  • Loan uses: Home improvements, debt consolidation, and other expenses.

The Bottom Line

Avant provides ample customer support options for the duration of your loan. If you want access to a responsive customer service team with your installment loan, then Avant is an option worth considering.

Try Avant

7. OneMain Financial - Best for secured loan options

OneMain Financial is willing to work with bad credit borrowers. But depending on your credit situation, you may be offered a secured installment loan instead of an unsecured installment loan. Essentially, a secured installment loan means that you tie an asset of value to the loan. If you don’t keep up with the loan payments, then OneMain Financial has the right to seize the asset. As a borrower with bad credit, providing security for a loan can help you tap into better interest rates. But when working with OneMain Financial, you won’t find a break on interest rates. The costs of borrowing are relatively high with OneMain Financial. But if you need a loan quickly, this lender is an option to consider. Here’s what to keep in mind with OneMain Financial:
Pros
Choose your payment date
Secured loans available
Joint loans available
Fast funding
Cons
Relatively high interest rates
Origination fee up to 10%

OneMain
Here’s a quick look at OneMain Financial’s features:

  • Loan terms: 24, 36, 48, or 60 months
  • Loan amounts: $1,500 to $20,000
  • Interest rates: 18% to 35.99%
  • Credit score requirements: No minimum requirement listed
  • Prepayment fee: N/A
  • Origination fees: $25 to $500 or 1% to 10% of loan amount, varies by state
  • Late payment fees: $5 to $30, varies by state
  • Income requirements: N/A
  • Turnaround time: One-day funding available, after your application is approved. Or branch pick up the same day.
  • Loan uses: Debt consolidation, medical bills, weddings, funerals, moving, vacation, sports equipment, home improvement, and more

The Bottom Line

It’s undeniable that OneMain Financial has high interest rates and fees. But the ability to secure your personal loan to an asset you already own can help you tap into the funds you need quickly. But make sure to weigh the costs of borrowing before moving forward with this lender.

Best Installment Loans for Bad Credit - Feature Comparison

Here’s a quick look at the best installment loans for bad credit.

Company Name

Est. APR

Min. credit score

Loan Amount

Loan term

Upgrade

5.94% to 35.97%, with Autopay

560

$1,000 to $50,000

Two to seven years

Upstart

5.4% to 35.99%

300. Also accepts applicants with no credit score

$1,000 to $50,000

Three or five years

Universal Credit

8.93% to 35.93%

No minimum requirement listed

$1,000 to $50,000

Three to five years

Oportun

Up to 35.99%

No minimum requirement listed

$300 to $10,000

12 to 52 months, varies by state

Fiona

Varies

No minimum requirement listed

Varies

Varies

Avant

9.99% to 35.99%

No minimum requirement listed

$2,000 to $35,000

24 to 60 months

OneMain Financial

18% to 35.99%

No minimum requirement listed

$1,500 to $20,000

24, 36, 48, or 60 months

What are installment loan for bad credit?

An installment loan for bad credit starts when the borrower receives a lump sum payment for the principal amount. From there, an installment loan requires regular monthly payments for the duration of a defined loan term.

Although each lender has different credit requirements, you can find many lenders that are willing to offer installment loans to bad credit borrowers. In general, lenders offering these loans charge higher interest rates and fees to compensate for the higher perceived risk.

Reasons to Get an installment loan for bad credit

If you have bad credit, there are plenty of reasons to consider an installment loan. Here are a few of the reasons why an installment loan might be the perfect fit for bad credit borrowers:

  • Relatively attractive APRs - Although APRs vary widely based on the lender, the rates for installment loans usually top out around 36%. That’s significantly lower than the interest rate associated with payday loans, which is another popular option for bad credit borrowers.
  • Fixed payments over time - When you accept an installment loan, you’ll know exactly what your monthly payment will be for a set period of time. The certainty of this option allows you to choose a loan that fits your budget.
  • Variable loan amounts - Loan amounts vary based on the lender. But you can find options ranging from a few hundred dollars to a few thousand dollars.
  • Loan payments might be reported - Some lenders will report your installment loan payments to the credit bureaus. If you are consistently making on-time payments, this could give your score a boost.

How to Get an installment loan for bad credit?

The process of getting an installment loan varies based on the lender. But in general, here’s what you can expect when qualifying and applying for an installment loan.

  • Determine what you need - The first step of shopping around for an installment loan of any kind is to determine exactly how much you need to borrow. Add up the expenses you plan to cover to determine what size loan you want. Additionally, take a close look at your monthly budget. You’ll want to make sure that any monthly loan payment you sign up for fits.
  • Check your credit score - Next up, check your credit score. You might already know that your credit score is bad. But it’s important to see exactly where you stand. As you explore your loan options, you can quickly eliminate any that you don’t qualify for.
  • Shop around - With your credit score and needs in mind, it’s time to shop around for a loan that fits your needs. Additionally, take a close look at the interest rates and fees attached to any particular loan. Make sure you are comfortable with the cost of borrowing.
  • Gather your documents - When you find a loan that meets your needs and budget, gather the documents you’ll need for the application. The exact requirements vary based on the lender. But a few common requirements include your Social Security number, government-issued ID, pay stubs to verify your income, and proof of your address.
  • Submit your application - With all of your documents readily available, your loan application should be a smooth one.
  • Accept funding and start payments - If the lender approves your loan application, you should receive the funds quickly. Make note of your payment due date so you can start making on-time payments immediately.

Where to get an installment loan for bad credit

The right installment loan for your situation will vary. But if you have bad credit, here are three different places to start your search:

  • Online lenders - Online loans for bad credit could be the perfect solution. Typically, these offer a fast application process and speedy funding time. If you don’t mind completing the process entirely online, then an online lender is a streamlined solution.
  • Banks - Although many banks aren’t willing to provide a loan to bad credit borrowers, some are. If you are already a customer at a bank, they are especially likely to work with you.
  • Credit unions - If you have a credit union membership, or qualify for one, then definitely consider this opportunity. Many credit unions are able to offer very competitive rates on personal installment loans, even to low credit borrowers.

With any of these lenders, take a close look at the attached APRs and fees. You don’t want to overpay!

How Bad Credit Installment Loans Impact Your Credit Score

A bad credit installment loan can have a positive or negative impact on your credit score. The exact impact will depend on how you manage your installment loan.

  • A positive impact: If you consistently make on-time payments, and your lender reports them to the credit bureaus, an installment loan can have a positive impact on your credit score.
  • A negative impact: You can expect a small negative impact on your credit score when a lender performs a hard credit inquiry to approve your loan. Beyond that, making late payments that are reported to the credit bureaus will have a negative impact on your credit score.

Ultimately, you can use a bad credit installment loan as a tool to improve your credit score. But it’s a double edge sword that can have both positive or negative consequences.

Alternatives to bad credit installment loans

A bad credit installment loan is not your only borrowing option. A few other choices include:

  • Buy now, pay later (BNPL) companies: If making a purchase, a BNPL option allows you to split up your cost into small payments. Usually, this doesn’t involve a hard credit inquiry.
  • Payday alternative loans (PALs): Traditional payday loans often come with triple digit APRs. But PALs offered through credit unions offer smaller loan amounts and relatively reasonable interest rates.
  • Credit union loans: Many credit unions are willing to work with members that have bad credit. If you qualify for membership in a credit union, this is an option to look into.

Conclusion

The best installment loans for bad credit offer a relatively affordable borrowing solution. Although you’ll still find relatively high interest rates, these are usually more affordable options than the alternatives.

As you search for the best installment loan for your situation, make sure to compare all of your options. The right lender could help you save hundreds or thousands in interest rates and fees.

Frequently Asked Questions(FAQ)

What is the easiest loan to get with bad credit?

If you have bad credit, payday loans and online installment loans with no credit check are likely the easiest to qualify for. However, a payday loan will come with extremely high interest rates and fees. Plus, you’ll find a very short repayment timeline.

If possible, seek out a different funding solution. An option with reasonable interest rates and longer loan terms is better for your finances in the long term.

Installment loan for bad credits vs payday loans

Payday loans can have APRs in the triple digits and must be repaid in a single lump sum after a few weeks. In general, you’ll only be able to borrow a few hundred dollars through a payday loan.

In contrast, an installment loan for bad credit often allows for larger loan amounts and a longer repayment timeline. With lower interest rates attached to installment loans, these are typically a more affordable borrowing solution.

Can you get a loan with a 550 credit score?

The credit requirements for a loan vary based on the lender. Some lenders are willing to approve loans for borrowers with a 550 credit score. However, you should expect higher interest rates attached to your loan if you have a credit score of 550.

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