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Best Personal Loans For Bad Credit

When you have bad credit, many lenders hesitate to approve you for a personal loan. Why? Because your track record shows them that you’re highly unlikely to repay the debt. However, there are bad credit loan companies that specialize in lending to borrowers with bad credit.

Loans For Bad Credit
Jessica Walrack
Personal Finance Writer

Reviewed by: Dahna Chandler, Award-Winning Business Finance Journalist and Brand Storyteller

Fact Checked by: Dr. JeFreda R. Brown, DBA, CFEI, and a highly respected financial expert

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. Before accepting, consider the loan rates and terms carefully 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 unsure where to find personal loans for bad credit, we can help. 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 provide our top choices, consider these factors 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? Lenders offer a range of loan amounts and approve you for a certain amount based on your credit and income. They’ll provide repayment terms like 12, 24, or 60 months. Longer loan terms mean lower monthly payments but higher overall costs. Some loans also come with use limitations, so check for such restrictions.
  • Interest rates and fees - Look at the annual percentage rates (APRs) available and the rate they’ll offer you based on your credit and financial picture. Determine if there are application, origination, late or returned payment, or other fees. Know if there are prepayment penalties and recognize low interest loans for bad credit aren’t available.
  • Application process – Learn if you can you apply online and whether the lender requires significant documentation. Know before applying if the lender will do a hard credit check for a quote. While many lenders perform a soft credit pull to pre-qualify you without hurting your credit score, some require the hard inquiry. Consider how long it takes to get a decision and get the funds.
  • Eligibility requirements - Understand the lender’s eligibility requirements before applying. Some require a minimum credit score, residency in certain states, or a certain income. Borrowing from a credit union, you’ll likely need to become a membership. While some lenders allow cosigners, others won’t.
  • Customer support – Find out if a lender’s customer service policies work for you before you apply. Determine if they have multiple support channels like phone, email, and live chats.
  • Online user reviews – Use online review sites, like Trustpilot, to assess the lender’s reputation. Learn any negative experiences prior borrowers had with the lender,like surprise fees and bad customer service before becoming a customer.
  • Perks and bonuses - Look for unique offerings from the lender that make applying worthwhile, like a program that allows you to borrow more as your credit improves. See if that lender analyzes the risk you present, without relying heavily on your credit score or if they offer payment flexibility during hard economic times.

Best Personal Loans for Bad Credit for 2022 - Full Overview

Now that you know how to compare options, you can choose the company that is best for bad credit loans. 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 determine your creditworthiness. Because Upstart identifies multiple potential lenders for you, it 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 personal loans review
Upstart’s lending partners extend loans ranging from $1,000 to $50,000 with fixed APRs ranging from 5.22% to 35.99%. The origination fee is up to 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’s offers loans to borrowers with credit scores as low as 300 and approves borrowers with no credit history or 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 But with its unique underwriting technology and network of lending partners, borrowers with credit scores as low as 300 have higher odds of approval than with other lenders .

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 determine your Payoff plan. Upon approval, get funds  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 review

Payoff offers unsecured loan amounts from $5,000 up to $40,000 with terms from 24 to 60 months, but their loans are only for paying off credit card debt. The loans have origination fees from 0% to 5% of the loan amount and APRs from 5.99% to 24.99%. Once approved, you can receive funds within two to five business days. The minimum FICO score for approval is 550.

The Bottom Line

If you’re struggling to pay off your credit cards, Payoff can help, even without great credit. As long as you have no payment delinquencies and at least a 550 score, you could get approved for a loan. If you lower credit utilization on your credit cards before applying, any credit score increase can help you qualify for larger personal loans at better rates.

3. Discover - Best for low fees

Discover offers personal loans  accessible to borrowers with bad credit. They don’t require  minimum credit score, instead analyzing your creditworthiness based on other factors. The lender  doesn’t charge an origination fee which can help you save on your 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
discover personal loans

Discover unsecured personal loans range from $2,500 up to $35,000 with no origination fees, and a fixed APR between 5.99% and 24.99%. Choose from terms of 36, 48, 60, 72, or 84 months. Next day funding is available upon approval. While there’s no credit score requirement, Discover does require a minimum of $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 minimum credit score requirements. If you qualify, you can avoid APRs above 24.99%.

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

If you’re getting decline by other lenders for  bad credit personal loans, One Main Financial is an alternative. The lender specializes in extending credit to non-prime customers and may be a final option for  bad credit borrowers. But, expect terms consistent with your credit profile.

Pros
Poor Credit lender: Specializes in bad credit borrowers
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
onemain financial personal loans

One Main Financial offers loans ranging from $1,500 up to $20,000 with APRs from t 18% to 35.99%. Origination fee range 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 accepts collateral from some borrowers, which can enhance your loan approval odds.. They require no minimum credit score, so approval depends on 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 may be an option if other lenders would decline your loan application.. Be sure to review their rates and terms carefully to ensure their loan is manageable for you.

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

Avant targets its unsecured personal loans to middle-income borrowers, who earn between $42,000 and $126,000 per year. While the company doesn’t require a minimum credit score, 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 personal loans review

Avant’s personal loans range from $2,000 up to $35,000 with fixed APRs from 9.95% to 35.99%. They charge an administration fee of up to 4.75%. Avant doesn’t accept collateral and offers terms from 24 to 60 months. Funds are available as early as the next business day upon approval.

The Bottom Line

Avant can be a good option if your income is within their stated range, 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, and they assess risk on a case-by-case basis.

Try Avant

6. NetCredit - Best for small loan amounts

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

Pros
Lenient qualification: No minimum credit score requirement
Wide range of loan amounts: $500 to $20,000
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
NetCredit Review

NetCredit offers personal loans from $500 up to $20,000 with APRs between19.9% and 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 where NetCredit extends loans, they may be an ideal solution for covering small emergency expense since loan amounts start at $500. Avoid these loans at larger loan amounts because of their high costs.

Best Personal Loans for Bad Credit - Main Features

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 poor, and one between 580 and 669 is fair. Any credit score under 670 is below the average U.S. consumer credit score and lenders will consider that borrower a higher risk.

What Affects Your Credit Score?

The biggest factor affecting credit score is your payment history. Any late or missed payment lowersr credit score. Credit utilization–the amount of credit you’ve used in comparison to your available credit–is another significant  factor in your credit score. The less available credit you’ve used, the higher your credit score may be.

Other factors include your credit mix or type of credit, the average age of your accounts, and the number of  recent credit inquiries. For credit mix, it’s  best to have both revolving and installment accounts and to keep your accounts open as long as possible to increase the age of your accounts. Also, 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 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%.
  • Payday loans: Payday loans are typically small, short-term, high-cost loans that are repaid in increments out of the borrower’s paycheck until satisfied. The set payments come directly from the borrower’s checking account. Since qualification is often income-based, they’re accessible to borrowers with bad credit. Because of their high costs for  short term loans, they’re usually  considered  predatory, and some states prohibit them. Borrowers risk multiple overdrafts if the full amount of each payment can’t be drafted from their checking account each pay period. This often leads to overdraft fees, can cost borrowers their checking account, and lead to collection both from the payday lender and the borrowers bank. 
  • Car title loans: Car title loans are lump sum loans secured loans where lenders use your vehicle’s title as collateral. You usually must  own your vehicle outright to use it as security for a title loan. These loans often come with high APRs and short terms which can make repayments more difficult. If you default, the lender can repossess your vehicle.

How to Get a Loan with Bad Credit

Start with determining the bad credit loan companies where you will qualify for a loan. Most companies post their eligibility requirements online. Make a shortlist of lenders that may suit your needs. 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.
  • Go through  pre-qualification: Most lenders pre-qualify with a soft credit check on their site. This involves providing your monthly income  and expenses, and other required income.
  • Review your offers: Lenders review  your application and let you know if you’re approved. If you are, they’ll show you  how much you can borrow, along with the fees, APR, and terms. Compare offers: Look at your offers side by side to see which loan fits your budget and purposes most closely.
  • Accept the loan: Follow the lenders process to accept the offer. You may have to verify your income by sending bank statements or connecting your bank account and send other documents related to monthly expenses or collateral offered to secure the loan. Then, you’ll usually need to e-sign documents.
  • Receive the funds: Upon full approval, 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?

Borrowers with bad credit can get a personal loan from banks, credit unions, and online lenders. In most cases, the best bad credit loans are available through online lenders like the six lenders above. specialize in lending to bad credit borrowers, have lower overhead costs because most don’t have physical branches, and have more lenient loan qualification requirements.

Alternatives to Bad Credit Loans

Even the best bad credit loans can be expensive, so consider 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 know you, which can work to your advantage when borrowing money. If you need better loan terms than you can get with a lender, consider asking people who trust you to repay them for a personal loan.
  • Credit cards: Some lenders also offer credit cards to people with bad credit. In some cases, you must put down a security deposit but then can earn an unsecured credit line as you make faithful payments for a certain amount of time. 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: If your financial need is not an emergency, work on fixing your credit and wait. Get a secured credit card to establish a positive credit line and make all your payments on time, and in a short time, you may qualify for better rates and terms on a loan than you can get with loans for bad credit.

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 often can borrow 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 usually are on  the high end of the ranges lenders provide to account for the risk you present. But they 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, if they’re your only option. They also can work as a tool for improving your credit, provided you make your payments on time, and help you get loans with better rates and terms  in the future.

How to Avoid Personal Loan Scams

Scammers about in the personal industry, especially for borrowers with bad credit. The best way to avoid scams is applying through a reputable lender websites Here are some red flags that are warnings you’re on a scammers website:

  • Incorrect or unsecure URL: Scammers often create websites that look very similar to a legitimate lender’s website to steal your information. Check website URLs carefully to be sure you’re on the true lender’s website and make sure they start with “https” and you see a lock symbol at the beginning of the URL. 
  • Personal email address: If you receive an email from someone pretending to represent a lender that uses a personal email address, especially from a free email provider, be wary. Lender representatives use email addresses that end with the company’s website URL (e.g. name@avant.com)
  • No credit check: Lenders must run a credit check, even if just a soft inquiry, to verify your identity. If a lender does not require any credit check, stay away.
  • Upfront payments: Most personal loans today require upfront payments. Application and origination fees get deducted from your loan proceeds. If a lender is trying to get you to pay something before you can get your loan funded, that’s a big red flag.

Go to  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 your risk of getting  scammed.

Conclusion

If you currently have bad credit and need a loan, there are a number of lenders that will consider lending to you — no matter your credit score. Above are six of the best loans for bad credit currently on the market. Applying is simple and you can get an answer within minutes. The downside of bad credit loans is you’ll  likely get smaller loan amounts with higher interest rates than if you had fair or better credit. But, if you pay your loans on time, you’ll add positive credit activity to your credit reports. That can help you improve your credit score and position you for better rates and terms 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 willing to lend to borrowers with poor credit scores. Shop around to find the best offers for your financial 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 depends on a number of factors such as your credit score, income, expenses, current debt, and more. To find out, you can pre-qualify  with lenders and get quotes, without hurting your credit score.

How to improve my credit score?

To improve your credit score, you’ll need a mix of both revolving and installment credit accounts open and active for which you make all of your payments on time. eep your credit card balances low, and pay off any 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 resulting in hard inquiries on your credit report.

What are the risks of a bad credit loan?

A bad credit loan can be risky because it usually comes with higher costs than standard personal loans. The lenders are taking more risk lending to you, so they charge you more to borrow money. Before you apply,  look at your budget to ensure you can make your loan payments on time, in full. Defaulting on loans could lead to a far worse credit situation.

Can I get a loan with bad credit?

While there are no guarantees, it is possible to get a loan with bad credit. Many bad credit lenders still approve borrowers despite poor credit scores because they look at their broader financial picture. Each lender will have other eligibility requirements besides credit scores you must meet. The lenders listed above are usually more lenient when determining your qualification for a loan.

About the Author

Jessica Walrack

Written by: 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

More about me
Dahna Chandler

Reviewed by: Dahna Chandler

Award-Winning Business Finance Journalist and Brand Storyteller

Institutional Finance, Wealth Management Firm Operations & Business Development Specialist

More about me
Dr. JeFreda R. Brown

Fact checked by: Dr. JeFreda R. Brown

DBA, CFEI and a highly respected expert in personal and business finance

Dr. JeFreda R. Brown is more than a financial consultant: she’s an avid teacher and subject matter expert who helps people—individuals and groups in a business setting—master the skills they need to achieve lasting financial wellbeing. As Founder and CEO of Xaris Financial Enterprises, it is her passion and life goal to help others develop and maintain financial wellness.

More about me

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