Easy to Get Loans for Bad Credit

The Bankrate guide to choosing the best personal loan for bad credit

To help you choose the right loan for you, our editorial team has gathered the most important information you need to shop for lenders and make your decision. Bankrate gathered data on loans for individuals with bad credit by comparing lenders and their rates as well as information on how someone with poor credit can get the best possible loan.

The lenders listed here are selected based on factors such as credit requirements, APRs, loan amounts and fees. Bankrate evaluated lenders and options for individuals with bad credit to help people find the best lender and rates for their situation.

What is a bad credit personal loan?

When you apply for a loan, lenders will look at your credit score and credit history to determine how much of a risk it is to them to lend you money. Having bad credit is when you have a low credit score, which can be caused by things like short credit history, late payments or maxed-out credit cards.

If you have bad credit and need a loan, you may need to narrow your search to lenders that offer loans for bad credit. These loans are either secured (backed by collateral like a home or car) or unsecured. Interest rates, fees and terms for these types of loans vary by lender.

Compare bad credit loan rates inJuly 2022

LENDER	BEST FOR	MIN. CREDIT SCORE	EST. APR	MIN LOAN AMOUNT	MAX. LOAN AMOUNT
Upstart	Limited credit history	No minimum credit score requirement	5.40%-35.99%	$1,000	$50,000
OneMain Financial	Secured loans	Not specified	18.00%-35.99%	$1,500	$20,000
TD Bank	Low rate caps	Not specified	6.99%-18.99%	$2,000	$50,000
Avant	A range of repayment options	580*	9.95%-35.99%	$2,000	$35,000
LendingPoint	Small loans	600	7.99%-35.99%	$2,000	$36,500
Upgrade	Fast funding	Not specified	5.94%-35.97% (with autopay)	$1,000	$50,000
LendingClub	Online experience	600	6.34%-35.89%	$1,000	$40,000

*Avant's minimum credit score is 580 FICO and 550 Vantage.

Best loan for limited credit history

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Check rate with Bankrate

Min. credit score:

Not disclosed

Fixed APR From:

5.4% –35.99%

Loan amount:

$1,000–$50,000

Term lengths:

3 to 5 years

Min. annual income:

$12,000

Overview: Upstart developed a reputation for offering fast and fair unsecured personal loans. APRs for Upstart loans vary by state and range from 5.40 percent to 35.99 percent. Loan amounts range from $1,000 to $50,000, and you can choose a repayment term of either three or five years.

Why Upstart is the best for limited credit history: While many loan applications are based primarily on a borrower's credit score and years of credit, Upstart applications also factor in an individual's education, job history and area of study.

Best secured loan

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Check rate with Bankrate

Min. credit score:

None

Fixed APR From:

18% –35.99%

Loan amount:

$1,500–$20,000

Term lengths:

2 to 5 years

Min. annual income:

$7,200

Overview: OneMain Financial offers both unsecured loans and secured loans, which require providing collateral, such as a motor vehicle. Loan amounts range from $1,500 to $20,000. APRs can run anywhere from 18.00 percent to 35.99 percent, and term lengths are 24, 36, 48 or 60 months.

Why OneMain Financial is the best for a secured loan: Many lenders only offer unsecured loans. Borrowers who can't get approved elsewhere may have a better chance of getting a secured loan with OneMain Financial.

Best loan for low rate caps

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Check rate with Bankrate

Min. credit score:

Not disclosed

Fixed APR From:

6.99% –18.99%

Loan amount:

$2,000–$50,000

Term lengths:

3 to 5 years

Min. annual income:

$0

Overview: TD Bank's TD Fit unsecured personal loan offers borrowers anywhere from $2,000 to $50,000 and comes with few fees. Its loans are also funded in as little as one business day.

Why TD Bank is the best for low rate caps: While TD Bank doesn't offer the absolute lowest rates, the cap on its personal loan rates is relatively low at 18.99 percent APR. This could make it particularly appealing for borrowers with poor credit who might otherwise be subject to rates above 30 percent.

Best loan for a range of repayment options

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Check rate with Bankrate

Min. credit score:

550

Fixed APR From:

27.95% –35.99%

Loan amount:

$2,000–$35,000

Term lengths:

2 to 4 years

Min. annual income:

$14,400

Overview: Avant offers unsecured loans of between $2,000 and $35,000 with APRs from 9.95 percent to 35.99 percent.

Why Avant is best for a range of repayment options: Avant's loans offer repayment terms of 24 to 60 months, and with no prepayment penalty, borrowers can save money on interest by paying their loans off early.

Best for small loans

See offers

Check rate with Bankrate

Min. credit score:

Not disclosed

Fixed APR From:

7.99% –35.99%

Loan amount:

$2,000–$36,500

Term lengths:

2 to 5 years

Min. annual income:

$30,000

Overview: LendingPoint operates in 48 states and Washington, D.C., and is known to offer unsecured loans for those with credit scores as low as 600. Loan amounts range from $2,000 to $36,500, and APRs start at 7.99 percent and go as high as 35.99 percent. The repayment terms offered by LendingPoint vary from 24 to 60 months.

Why LendingPoint is the best for small loans: Some lenders with tighter credit requirements have a $5,000 minimum for personal loans, but LendingPoint lets bad credit borrowers take out as little as $2,000.

Best loan for fast funding

See offers

Check rate with Bankrate

Min. credit score:

Not disclosed

Fixed APR From:

6.95% –35.97%

Loan amount:

$1,000–$50,000

Term lengths:

3 to 5 years

Min. annual income:

$30,000

Overview: Upgrade offers unsecured personal loans that can be used for debt consolidation, credit card refinancing, home improvements or major purchases. APRs available from Upgrade start at 5.94 percent and go as high as 35.97 percent. Loan amounts range from $1,000 to $50,000, and terms are 24 to 84 months.

Why Upgrade is the best for fast funding: Loan funds can be available within just one business day of going through the provider's verification process.

Best loan for online experience

See offers

Check rate with Bankrate

Min. credit score:

Not disclosed

Fixed APR From:

6.34% –35.89%

Loan amount:

$1,000–$40,000

Term lengths:

3 to 5 years

Min. annual income:

$0

Overview: If your credit score makes it difficult to get approved for a loan, LendingClub allows you to increase your chances of approval by having a co-borrower. Not every lender offers this option, and it can be a helpful way to qualify for a loan that you wouldn't have gotten otherwise.

Why LendingClub is the best for an online experience: LendingClub has a robust website that features an easy application process and an extensive loans resource center.

What to know about your credit score and securing a loan

When lenders give you money, they need you to pay back the money so they make money instead of losing it. Lenders tend to view people with less optimal credit to be riskier, so people with lower credit tend to see higher APRs.

Estimated APR by FICO score range

CATEGORY	CREDIT SCORE	PERCENTAGE OF PEOPLE IN THIS CATEGORY	ESTIMATED APR
Excellent	800-850	21%	10.3%-12.5%
Very good	740-799	25%	10.3%-12.5%
Good	670-739	21%	13.5%-15.5%
Fair	580-669	17%	17.8%-19.9%
Very poor	300-579	16%	28.5%-32%

What is considered a bad credit score?

There are a few credit-scoring models that you can use to check your credit score, but the FICO credit scoring system is one of the most popular. FICO scores range from 300 to 850, with the scores on the lower end considered poor or fair.

According to FICO, a bad credit score is within the following ranges:

• Fair credit: 580 to 669.
• Poor credit: 300 to 579.

Having a poor or fair credit score can impact your ability to get approved for a loan and can even affect your ability to rent an apartment or purchase a home. If you do get approved for a loan with bad credit, you'll likely be charged the highest interest rates and higher fees. However, there are long-term habits that you can develop to improve your credit score, like paying your bills in full every month and regularly checking your credit report to catch errors.

What makes up a bad credit score?

FICO calculates your credit score using five pieces of information:

If your finances fall short in one or more of these areas, your score will drop. For instance, having a history of late payments will have a huge impact on your score, since payment history contributes the most to your score. Things like bankruptcies, foreclosures and high amounts of debt relative to your income could also result in a bad credit score.

Where can I get a personal loan with bad credit?

When searching for a personal loan with low or bad credit, it is important to consider all of your options before committing to a lender. While bad credit can lead to limitations in the borrowing process, there are still ways to find lenders willing to work with you. Borrowers with bad credit can apply for both online personal loans and loans from direct lenders.

Online personal loans for bad credit

Applying to online lenders can be a good option for borrowers with bad credit, especially if you submit an application through an online lending network. These online networks often allow you to submit a single initial application and then compare offers from responding lenders. Online lending networks make it easier to find the lenders willing to work with you and decide which one will work best for you.

Direct lenders also can offer online personal loans. In this case, you would go directly to a lender you would like to work with that offers online options to apply. In this case, you will want to research beforehand to find lenders that offer bad credit loans.

In-person lenders for bad credit personal loans

If you prefer to get started in person, applying directly with individual lenders is a good option. You can look for local banks and credit unions, especially ones you may already have a working relationship with. As always when applying directly to specific lenders, it is important to figure out which lenders are willing to work with borrowers who have bad credit. Our list of lenders may help you find one that also offers in-person services.

Types of bad credit loans and their uses

There are two main options when it comes to getting a personal loan if you have bad credit: secured and unsecured, but there are many other varieties.

Secured personal loans

Secured loans are those that require collateral, like a home or car. Generally, these loans offer more favorable rates and terms and higher loan limits because you have a greater incentive to pay your loan back. If you have bad credit, it may be easier to get a secured loan than an unsecured one.

Who it's best for: People who feel confident that they will pay back the loan without any problems and will have trouble otherwise qualifying for a loan with a favorable APR.

What to watch out for: If you default on the loan, you risk losing your home, car or other collateral. The most common types of secured loans are mortgages, home equity loans and auto loans, although some lenders offer secured personal loans.

When to get started: When you have considered all of your loan options and are having trouble finding an option that you can afford, you may want to consider getting a secured loan for a better rate.

How to get started: Consider what items you have that could qualify for collateral and look for lenders that will accept collateral of that type.

Takeaway: Secured personal loans can help someone with bad credit get a loan with a better APR, but it does put whatever is used as collateral at some risk.

Unsecured personal loans

Unsecured loans don't require any collateral, and the rate you receive is based on your creditworthiness — meaning they may be harder to qualify for if you have below-average credit.

Who it's best for: Generally, this type of personal loan is the best option for most people.

What to watch out for: Because these loans are not secured by an asset, they typically come with a higher interest rate and lower loan limits. APRs may be far above what you're able to pay, and you may not qualify at all.

When to get started: When you need a loan for a bigger purchase or debt consolidation.

How to get started: Shop around for loans, getting prequalified if possible, to identify the best overall loan for you.

Takeaway: Unsecured loans are the most common type of personal loans, but they can be hard to qualify for or get favorable APRs with if you have bad credit.

Payday loans

Payday loans are short-term loans, typically for $500 or less. They charge incredibly high fees in exchange for fast cash, and repayment is typically due by your next paycheck.

Who it's best for: Generally, it is best to avoid these loans unless there are no other possible options.

What to watch out for: The overall cost of borrowing is high — sometimes up to 400 percent in interest — so it's important to weigh your other options first. Payday lenders can also be predatory, so thoroughly research companies before signing up.

When to get started: Start only after you have considered all other options.

How to get started: Research loan companies to ensure you don't use a predatory lender, and have a plan to make sure you can pay back the loan by the due date so you don't get in more severe debt very quickly.

Takeaway: Payday loans have the potential to put you in more debt due to extremely high interest rates. They can also be predatory, and it's best to start your search for a personal loan with more reputable lenders.

Cash advances

A cash advance is similar to a short-term loan and is offered by your credit card issuer. The sum you receive is disbursed in cash and is borrowed from the available balance on your credit card.

Who it's best for: Cash advances are one of the fastest ways to get money, so they may be worth looking into if you have urgent needs.

What to watch out for: If you have an unsecured credit card, your cash advance interest rate will likely be higher than your card's standard purchase APR and higher than interest rates on personal loans.

When to get started: If you need money quickly and don't have time to wait a few days for money.

How to get started: Contact your credit card company or look up their policies on how to get a cash advance without talking to a representative.

Bank agreements

Depending on your bank's policy, it may approve you for a short-term loan or minimal overdraft agreement. This is, of course, dependent on your banking history and ability to keep your account open. For more information, contact your bank and ask about your options.

Who it's best for: People who have a good relationship with their bank and need to access a small amount of cash as a short-term solution.

What to watch out for: Because bank agreements are not official policies, they are not reliable ways to borrow money.

When to get started: When you have looked at your loan options and find that a bank agreement may be the right decision for you.

How to get started: Contact your bank.

Takeaway: If you'd like to set up a bank agreement, the best way to find out your options is to contact your bank directly and ask about its policies.

Home equity loans for poor credit

Home equity loans disburse a lump sum of money upfront, which you pay back in fixed monthly installments. These loans use your home as collateral.

Who it's best for: Someone who needs a lot of money upfront or who wants to use their home equity to make home improvements that increase the home's value or otherwise improve their financial position.

What to watch out for: Because your home is collateral for the loan, if you fail to make the monthly payments on time, you risk losing your home.

When to get started: After you have shopped around for personal loans and determined collateral will be the best option for you.

Takeaway: Home equity loans can be ideal for reasons that require a large sum of money upfront, like larger home improvement projects or debt consolidation.

HELOCs for poor credit

HELOCs are similar to home equity loans in that they are based on your home equity and secured by your home itself. HELOCs, however, are functionally similar to credit cards in that they allow you to borrow only as much as you need, when you need it, then repay funds with a variable interest rate.

Who it's best for: Homeowners who need to borrow some cash some at a time rather than all at once.

What to watch out for: As with a home equity loan, you use your home as collateral, which puts you at risk if you don't make the payments on time.

When to get started: When you know you'll need small amounts of cash over a period of time and can pay back what you borrow.

How to get started: Find lenders that offer HELOCs and search for the ones that work with people with bad credit.

Takeaway: A HELOC is a valid loan option for people with bad credit because you'll secure the loan with your home. It's also a good option if you don't need all of your funds upfront.

Student loans for bad credit

While not a type of personal loan, a student loan may meet your needs if you're trying to pay for education costs like tuition, textbooks and room and board. Many personal loan lenders do not allow you to use funds for education, so you'll have to start your search with dedicated student loan lenders for bad credit.

Who it's best for: Students who need money for their education. Student loans are sometimes the only way to get funding if you need to pay for your college tuition or related expenses.

What to watch out for: Student loans are not offered by many personal loan lenders, and if you have bad credit, you'll almost certainly need a co-signer to qualify.

When to get started: When you become a college student and other funding options such as scholarships or family aid aren't enough to cover your costs.

How to get started: Look for student loan lenders that offer loans for people with bad credit or offer co-signer opportunities.

Takeaway: Unlike the other options on this list, student loans can only be used for one purpose, but almost all student loan lenders accept co-signers if you have poor credit.

How to spot bad credit loan scams

• Guarantees without approval: Reputable lenders generally want to see your credit report, income and other information before extending an offer. If you come across a lender that isn't interested in your payment history, you might be getting lured into a bad situation.
• No registration in your state: The Federal Trade Commission requires that lenders be registered in the state where they do business. Research whether the business is licensed in your state.
• Poor advertising methods: Phone calls and door-to-door solicitation are not considered legitimate advertising practices for trustworthy lenders. Similarly, loan offers that pressure you into taking action immediately are designed to get you to accept without due consideration.
• Prepayment: While application, origination or appraisal fees are common loan charges, these charges are often deducted from the total amount of your loan. If a lender requires you to provide cash or a prepaid debit card upfront, it's not legitimate.
• Unsecured website: A lender's site should be secure, meaning the website address should begin with "https" and feature a padlock symbol on any page where you're asked for personal information.
• No physical address: A reputable lender should have a physical address listed on its website.

Frequently asked questions

Methodology

To select the top bad credit personal loan lenders, Bankrate considers 15 primary factors, with extra weight given to flexibility of eligibility criteria. Since bad credit personal loans can be tied up with extremely high fees, we also give more weight to the APR ranges offered and fees.

Overall, Bankrate reviewed 33 lenders and pulled the top eight. Each of the eight have a Bankrate rating that is broken down into three buckets: availability, affordability and customer experience. The categories are scored based on several data points adding up to a potential total of 300 points.

• Availability: Eligibility requirements, online application availability and turnaround time are considered under this category.
• Affordability: This encapsulates the fees, penalties and minimum and maximum interest rates charged by the lender.
• Customer experience: This covers customer service hours, online access and mobile apps.

Consider both the Bankrate ratings and the best-for category for each lender when evaluating which might best fit your needs.

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Source: https://www.bankrate.com/loans/personal-loans/bad-credit-loans/

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