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Best Personal Loans For Bad Credit

When you have bad credit, many lenders will be hesitant to approve you for a personal loan. Why? because your track record doesn’t show a high probability that you’ll repay the money as agreed. However, there are bad credit loan companies that specialize in extending loans to bad credit borrowers

Loans For Bad Credit
Jessica Walrack
Written by:Jessica Walrack
Personal Finance Writer

A bad credit personal loan might be the right choice if you have a credit score under 580 and have had trouble getting approved by other lenders. But before accepting, be sure to consider the loan rates and terms carefully. You want to be sure that it fits into your budget and is the best deal you can get. Key factors to consider are the loan amount, APR, fees, payment amount, and repayment term.

If you’re not sure where to find personal loans for bad credit, we’ve got you covered. Our team of financial experts reviewed and ranked more than 30 online lenders to help you find the best options. Below are our top six picks for the best personal loans for bad credit.

Our Top Picks Best Personal Loans For Bad Credit

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
payoff_(happymoney)_logo
  • No prepayment or late fees
  • Direct payments to creditors available
  • Free financial resources
Min. Credit Score
Min. Credit Score 640+
Loan Amounts
Loan Amount $5K-$40K
Est. APR
Loan Repayment 24-60 months
discover_logo
  • No origination fees
  • Nine month deferment period
  • Direct payments to creditors with debt consolidation loans
Min. Credit Score
Min. Credit Score 660+
Loan Amounts
Loan Amount $2.5K-$35K
Est. APR
Loan Repayment 36-84 months

How to Choose the Best Personal Loans for Bad Credit

Before we get into our top picks, here’s a closer look at the main factors to consider when analyzing and comparing loan companies for bad credit.

  • Loan features: First, it’s important to look at the basic components of the loan. How much can you borrow? Often, lenders provide a range of loan amounts and approve you for up to a certain amount based on your credit and income. They’ll also offer a specific amount of time to pay the money back such as 12, 24, or 60 months. Keep in mind that longer loan terms mean lower monthly payments but higher overall costs. Some loans may also come with limitations on how you can use the funds so make sure to check on any restrictions.
  • Interest rates and fees - You’ll also want to look at the annual percentage rates (APRs) available as well as the rate they’ll offer you. Additionally, take note of any fees to get the loan such as application or origination fees. It’s also smart to think ahead and look at any fees you may encounter down the line such as prepayment fees, late fees, or returned payment fees. Unfortunately, low interest loans for bad credit aren’t typically a thing.
  • Application process - Next, consider the ease and convenience of the application process. Can you apply online from the comfort of home? Do you need to send lots of documentation? Do they require a hard credit check for a quote? Many lenders perform a soft credit pull to provide you with a loan quote without hurting your credit score, but others will require the hard inquiry. Also, think about how long it takes to get a decision and get the funds.
  • Eligibility requirements - You can save some time by understanding the eligibility requirements of a lender before you apply. Some will require a minimum credit score, residency in certain states, or a certain level of income. If you’re looking to get a loan from a credit union, you’ll likely need to become a member. Further, some lenders will allow you to apply with a cosigner to get better rates while others won’t.
  • Customer support - You don’t want to find out that a lender’s customer service is bad once you have a problem and need them. Instead, look into the quality of service ahead of time. Find out if they have multiple support channels such as phone lines, email inboxes, and live chats.
  • Online user reviews - Reading online reviews from past customers can also help you understand if a lender is a company you want to go ahead with. Trustpilot is a good place to look for reviews. You can find out about red flags like surprise fees and bad customer service before you’re dealing with them first hand.
  • Perks and bonuses - Lastly, don’t forget to look at unique offerings that set a lender apart from the rest. Perhaps, it’s a program that lets you gradually borrow more money. Or, maybe it’s a unique way that the lender analyzes the risk level you present, without relying so heavily on your credit score. On the other hand, it could be payment flexibility if you come upon hard times. Look for the perks and bonuses that might work to your advantage.

Best Personal Loans for Bad Credit for 2022 - Full Overview

Now that you know what to look for when comparing options, which loan company is best for bad credit? We compared over 30 lenders, analyzing their loan amounts, terms, rates, fees, and more. The result? Here are our top six picks for the best personal loans for bad credit in 2022.

1.Upstart - Best for very low to no credit

Upstart is not a direct lender but an AI lending platform that connects you with partner credit unions and banks that provide loans. It’s helpful for those with bad credit because it uses non-traditional factors to predict your creditworthiness. Plus, Upstart can check with various lenders instead of just one, which can improve your odds of approval.

Pros
Low minimum credit score: Scores as low as 300 accepted
Multiple loans: Many lending partners
Wide range of loan amounts: From $1,000 to $50,000
Cons
High APRs: Up to 35.99% APR
Origination fees: Up to around 7% of loan amount


Upstart’s lending partners extend loans ranging from $1,000 to $50,000 with fixed APRs ranging from 5.22% to 35.99%. Included in the APR is an origination fee which can go up to around 7%. You’ll have from 36 to 60 months to repay the loan and, if approved, can get funding as soon as the same day. Upstart is more flexible than many lenders when it comes to its eligibility requirements, only requiring a 300 credit score. Further, it will even approve some borrowers with no credit history and no credit score.

The Bottom Line

Upstart is a good option if you have bad credit or no credit. Most lenders won’t approve borrowers with scores below 500, let alone 300. With its unique underwriting technology and network of lending partners, the odds for approval look pretty good at Upstart.

2.Payoff - Best for paying off credit cards

Payoff, the parent company of Happy Loans, offers a personal loan designed to help you pay off credit card debt (and possibly unsecured installment loans). The lender will analyze your credit, income, and savings to figure out your Payoff plan. Then, upon approval, you can have the money deposited into your account or paid directly to your credit card accounts.

Pros
Low minimum credit requirement: Accepts credit scores as low as 550
Low max APR: Up to 24.99% APR
Wide range of loan terms: From 24 to 60 months
Cons
No delinquencies: Must pay off any delinquencies before applying
Origination fees: Up to 5% of loan amount
Loan restrictions: Designed just for paying off higher interest debt
Larger loans only: Loans start at $5,000


Payoff offers unsecured loan amounts from $5,000 up to $40,000 with terms ranging from 24 to 60 months. They are meant to be used to pay off credit card debt which means you can’t use the money for just anything. The loans currently come with origination fees ranging from 0% to 5% and APRs from 5.99% to 24.99%. If approved, you can expect to receive funds within two to five business days. But to get approved, you’ll need a minimum FICO credit score of at least 550.

The Bottom Line

If you’re struggling to pay off your credit cards, Payoff is designed to help. Even if your credit isn’t great, as long as you aren’t delinquent on any payments and have at least a 550 score, you can likely get approved. By lowering the credit utilization on your credit cards, you’ll likely see your credit score go up which can help you qualify for larger personal loans at better rates.

3.Discover - Best for low fees

While well-known for credit cards, Discover also offers personal loans that can be accessible to borrowers with bad credit. The company doesn’t have a minimum credit score requirement, but will instead analyze your creditworthiness based on a number of factors. Another plus? It doesn’t charge an origination fee which can help you save on your overall borrowing costs.

Pros
Bad credit approval: No minimum credit score requirement
Long loan terms: Up to 84-month terms
No fees: No origination fees
Low APR: Max of 24.99% APR
Cons
Low maximum loan amount: Max of $35,000
Income requirement: Must have $25,000 in household income
Loan restrictions: Can’t use funds to pay off a Discover credit card or a secured loan


The Discover unsecured personal loans range from $2,500 up to $35,000. As for the costs, there are no origination fees, and the fixed APRs range from 5.99% to 24.99%. You can choose from a term of 36, 48, 60, 72, or 84 months. Upon approval, the funds can be in your account as soon as the next day. While there’s no credit score requirement, you do need to have at least $25,000 in annual household income to qualify.

The Bottom Line

Discover’s unsecured personal loans can be great for bad credit borrowers because they are lower cost than many competitors and don’t have a minimum credit score requirement. If you qualify, you can avoid APRs in the 30% range.

4.One Main Financial - Best for borrowers getting denied elsewhere

If you’re not having any luck getting approved for bad credit personal loans, give One Main Financial a try. The lender specializes in extending credit to nonprime customers and will often be the last lender standing for bad credit borrowers. While its terms aren’t the best, they can be better than no loan, which bad credit borrowers may be facing.

Pros
Subprime lender: Specializes in lending to borrowers with bad credit
Higher likelihood of approval: No minimum credit score requirement
Accepts collateral: Cars, trucks, motorcycles, boats, etc.
Cons
High APRs: Up to 35.99% APR
High origination fees: Up to 10% of the loan amount or $500
Lower loan amounts: Limited to $20,000

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One Main Financial offers loans ranging from $1,500 up to $20,000. The APRs start higher than most lenders at 18% and range up to 35.99%. Further, the origination fee ranges from 1% to 10% or $25 to $500, depending on your state. Loan terms can be 24, 36, 48, or 60 months, and the time to funding is one to two business days.

One Main Financial will accept collateral from borrowers in some cases, which can help you get approved when you otherwise wouldn’t. There are no minimum credit score requirements so approval depends on factors like your income, expenses, credit history, financial obligations, and available collateral.

The Bottom Line

One Main Financial doesn’t offer the most competitive pricing on its personal loans but it will often be an option when other lenders bow out. If you’ve been applying and keep getting denied, applying with this lender is worth a shot. However, be sure to review the rates and terms carefully to ensure they will be manageable for you.

5.Avant - Best for middle-income borrowers with bad credit

Avant offers unsecured personal loans and focuses on middle-income borrowers, which are those that make between $42,000 and $126,000 per year. While the company doesn’t have a minimum credit score requirement, it says that most borrowers have a score of at least 600.

Pros
Lenient approval: No minimum credit score requirement
Good loan range: $2,000 to $35,000
Flexible loan terms: 24 to 60 months
Cons
High APRs: Up to 35.99% APR
Administration fee: Up to 4.75% of loan amount
Average score fair: The average borrower has a score of at least 600


Avant’s personal loans range from $2,000 up to $35,000 with fixed APRs ranging from 9.95% up to 35.99%. You’ll also likely be charged an administration fee which can go up to 4.75%. Avant doesn’t accept any collateral and offers terms from 24 to 60 months. Upon approval, you can have the funds as soon as the next business day.

The Bottom Line

Avant can be a good option if you’re the type of middle-income borrower they serve, even if your credit is less than perfect. While the average borrower has a score from 600 to 700, you could get approved with a lower score. They assess risk on a case-by-case basis. Being so, if you’re getting quotes, Avant is one to give a shot.

Try Avant

6.NetCredit - Best for small loan amounts

NetCredit offers unsecured personal loans for people with bad credit in 36 states. While the rates are significantly higher than what many other lenders offer, the company offers very lenient qualification requirements, loan terms as short as six months, and loan amounts starting as low as $500.

Pros
Lenient qualification: No minimum credit score requirement
Wide range of loan amounts: 24 to 60 months
Wide range of loan terms: 6 to 60 months
Small loan amounts: Starting at $500
Cons
High APRs: 19.9% to 155% APR
Origination fees: Fees in some states
Limited availability: Not available in 14 states

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NetCredit offers personal loans that range from $500 up to $20,000 with APRs ranging from 19.9% to 155%, and origination fees being charged in some states. Loan terms can be as short as six months and as long as 60 months. However, the loans are only offered in 36 states. They aren’t available in Colorado, Connecticut, Iowa, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New York, North Carolina, Pennsylvania, Vermont, Virginia, and West Virginia.

The Bottom Line

If you live in a state where NetCredit extends loans, they can be a good solution to cover a smaller emergency expense. It’s possible to get approved, even with bad credit, and loan amounts start as low as $500. This wouldn’t be the best choice for larger loan amounts because of the high costs.

Best Personal Loans for Bad Credit - Feature Comparison


Company Name

Est. APR

Min. credit score

Loan Amount

Loan term

Upstart

5.22% to 35.99%

300

$1,000 to $50,000

36 to 60 months

Payoff

5.99% to 24.99%

550

$5,000 to $40,000

24 to 60 months

Discover

5.99% to 24.99%

None

$2,500 to $35,000

36 to 84 months

One Main Financial

18% to 35.99%

None

$1,500 to $20,000

24 to 60 months

Avant

9.95% to 35.99%

None

$2,000 to $35,000

24 to 60 months

NetCredit

19.9% to 155%

None

$500 to $20,000

6 to 60 months

What is Considered a Bad Credit Score?

According to myFICO, a credit score that’s lower than 580 is considered poo. If your score is between 580 and 669, it is considered fair but not yet good. Any score below 670 is below the average score of U.S. consumers so will mean it’s riskier to lend to that borrower.

What Affects Your Credit Score?

The biggest factor in your credit score is your payment history. If you have any late or missed payments, your score will drop. Additionally, credit utilization, or the amount of credit you’ve used in comparison to how much you have available, is another big factor. The less credit you’ve used, the better.

Other factors include your credit mix, the average age of your accounts, and your recent credit inquiries. It’s best to have a mix of revolving and installment accounts, keep your accounts open as long as possible, and avoid too many hard credit inquiries.

What Are the Types of Loans for Bad Credit?

There are various types of loans you may be able to get with bad credit, including:

  • Personal loans: Personal loans are lump-sum term loans that you repay over a set period of time. Loans from finance companies for bad credit will typically range from $1,000 to $50,000, have terms from 24 to 84 months, and APRs up to 36%. Personal loans are a good choice because they can help you get a lump sum of money that can be repaid over several years. The downside is, that you will still have to qualify and undergo a credit check to get funding.
  • Payday loans: Payday loans are typically small, short-term, high-cost loans that are repaid out of the borrower’s upcoming paycheck. Qualification is often income-based so they are accessible for borrowers with bad credit. Because of the high costs and short terms, these have been called predatory and are prohibited in several states.
  • Car title loans: Car title loans are secured loans that give you a lump sum loan that is secured by your vehicle’s title. You usually have to own your vehicle free-and-clear to use it as collateral. These loans often come with high APRs and short terms which can make repayments more difficult. If you default, the lender can take ownership of your vehicle.

How to Get a Loan with Bad Credit

To get a loan with bad credit, you’ll first need to figure out which of the bad credit loan companies you’ll likely qualify with. Most post their eligibility requirements online or you can find them in reviews like this one. Make a shortlist of lenders that look to be a good fit. While each will have a slightly different application process, here are the common steps you’ll encounter:

  • Visit each lender’s website: Visit the websites of the lenders from your shortlist.
  • Click apply: Most lenders want you to apply so they have a button right on their home page to check your rate, get a quote, or something similar.
  • Complete the application: From there, you’ll complete the application which often involves providing your personal, income, and expense information, and undergoing a soft credit check.
  • Review your offer: Once the lenders receive your application, they’ll let you know if you’re approved or not. If you are approved, you’ll be able to see how much you can borrow, along with the fees, APR, and terms. Take note of all of your offers.
  • Compare offers: Compare all of your offers side by side to see which is the best.
  • Accept the loan: When you find a loan that fits your budget and needs, follow the steps provided by the lender to accept the offer. You may have to verify your income by sending bank statements or connecting your bank account. Then, you’ll usually need to e-sign documents.
  • Receive the funds: Lastly, the lender will send you the funds. Often, they’ll direct deposit them into your bank account within one to two business days.

Where Can I Get a Personal Loan with Bad Credit?

You can get a personal loan with bad credit from select banks, credit unions, and online lenders. In most cases, the best bad credit loans are going to be available through online lenders. Several specialize in lending to bad credit borrowers, have lower overhead costs, and have more lenient qualification requirements. Being so, browsing the six lenders above can help you get some of the best offers available right now for borrowers with bad credit.

Alternatives to Bad Credit Loans

Even the best bad credit loans can be on the expensive side. If you would rather not use them, you could try one of these alternatives:

  • Borrow from friends and family: Lenders don’t know you personally so can only look at your financial records and history to assess the level of risk you present. Friends and family members, on the other hand, do know you which can work to your advantage. If you are in need of a loan but need better terms than you can get with a lender, consider asking someone you know who trusts you.
  • Credit cards: Some lending companies also offer credit cards to people with bad credit. In some cases, you need to put down a security deposit but then can earn an unsecured credit line. While credit cards typically have high APRs, you can cut your borrowing costs by paying off the balance as quickly as possible.
  • Work on your credit: Another option, if the financial need is not an emergency, is to work on your credit and wait. You could get a secured credit card to establish a positive credit line and make all your payments on time. From there, within a few months, you may qualify for better rates and terms.

Bad Credit Loans Rates, Amounts, and Terms

The best bad credit loans can offer a far better borrowing solution than payday or car title lenders. You can often get thousands of dollars which can be repaid over several years with APRs below 36% (in most cases). While the loan amounts may be lower than personal loans for good credit, they are often higher than payday loans and car title loans. Additionally, the APRs will usually be on the high end of the ranges lenders provide to account for the risk you present, but will be much lower than the APRs you’ll face with payday loans and car title loans. Overall, bad credit personal loans are worth considering. They aren’t the worst but aren’t the best. That said, they can work as a stepping stone to help you improve your credit, prove you’ll meet your payment obligations, and earn better loans in the future.

How to Avoid Personal Loan Scams

Unfortunately, there are people out there that might try to scam you using personal loans. The best way to avoid a scam is to go to a reputable lender’s website, ensure it’s the correct URL, and apply there. A few red flags that could warn you of a potential scammer include:

  • Incorrect URL: Scammers will sometimes create websites that look very similar to a legitimate lender’s website in an attempt to steal your information. Be sure you go directly to the actual lender’s website and check the URL carefully to be sure.
  • Personal email address: If you receive an email from someone on behalf of a lender that is using a personal email address, be wary. Representatives will use email addresses that end with the company’s name (e.g. name@avant.com)
  • No credit check: Lenders need to run a credit check, even if it’s just a soft inquiry, to verify your identity. If a lender does not require any credit check whatsoever, stay away.
  • Upfront payments: Most personal loans today don’t come with any kind of upfront application fee. They may have an origination fee but often that can be deducted from your loan proceeds, rather than being paid upfront. If a lender is trying to get you to pay something before you can get the loan proceeds, that’s a big red flag.

While there are scammers out there, there is also a wide selection of legitimate lenders, like those that made our list above. By opting for well-known, reputable lending companies, and going directly to their websites, you can greatly reduce any risk of being scammed.

Conclusion

If you currently have bad credit and need a loan, there’s a whole lineup of lenders that will consider lending to you — no matter your score. Above are six of the best loans for bad credit currently on the market. Applying is simple. You can get an answer within minutes without leaving your couch. The downside is that it’s likely going to be a smaller loan amount with higher rates than you would get if you had fair or better credit. However, in some cases, the high cost is worth it. Plus, if you pay it on time, you’ll add a positive credit line to your account. That can help you improve your score and put yourself in a better position for your future borrowing needs.

Frequently Asked Questions (FAQ)

What are the best ways to get a loan with bad credit?
The best way to get a loan with bad credit is to find reputable lenders that are willing to lend to borrowers with poor credit scores. Shop around and get quotes to find the best offer available for your situation.
How much can I borrow with bad credit?
Many bad credit lenders offer loans for tens of thousands of dollars. However, the amount you can borrow with bad credit is going to depend on a number of factors such as your credit score, income, expenses, current debt, and more. To find out, you can apply with lenders and get a quote, usually without hurting your credit score.
How to improve my credit score?
To improve your credit score, you need to have a mix of both revolving and installment credit accounts open and active. Additionally, make all of your payments on time, keep your credit card balances low, and pay off any outstanding delinquent accounts. It’s also important to keep your accounts open as long as possible and to not get too much new credit at once.
What are the risks of a bad credit loan?
A bad credit loan can be risky because it will usually come with higher costs than standard personal loans. The lenders are taking more risk in lending to you, so they charge you more to borrow the money. The most important step you can take is to look at your budget and ensure you are going to be able to make the payments. If you end up defaulting, it could make your credit situation much worse.
Can I get a loan with bad credit?
It is possible to get a loan with bad credit. Many bad credit lenders will still approve borrowers despite poor credit scores because they look at their wider financial picture. That said, there are no guarantees. Each lender will still have eligibility requirements that must be met. The lenders listed above are known for falling on the more lenient side when it comes to qualification.

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About the Author

Jessica Walrack

Jessica Walrack

Personal Finance Writer

Started freelance writing about 9 years ago after leaving a career in retail sales and management. Fell in love with writing content and copy and have been doing it ever since

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