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Having a bad credit score can seem like the end of the world, especially if you need some help with a big upcoming purchase.
However, a low score won’t shut you out of the loan market entirely – it just means you’ll face higher rates and a higher possibility of rejection.
Although it can seem counterproductive to get a loan if you already have bad credit, loans can improve your credit score, help you to consolidate debt, and diversify your credit mix. As long as you’re confident that you’ll be able to meet your payment obligations, taking out a loan can be a smart move, even for somebody with bad credit.
Nonetheless, there are a few things to be aware of, like making sure you’re dealing with a genuine provider who is offering fair terms. It’s well-known that those looking for bad credit loans are a vulnerable market, so there are plenty of scam websites and predatory lenders out there.
19 Best Loans For Bad Credit
- BadCreditLoans.com: Best for Very Bad Credit
- Prosper: Best Peer-to-Peer Loan Option
- OneMain Financial: Best Secured Loan
- Avant: Best Unsecured Loan
- NetCredit: Best For No PrePayment Fee
- Lending Club
- TD Bank
- Capital Good Fund
- Municipal Credit Union
BadCreditLoans.com: Best For Very Bad Credit
It’s clear from the name what BadCreditLoans.com specializes in. The site has been around since 1998 and is a leading name in the subprime sector. They connect borrowers with lenders rather than dictating loans themselves.
You can receive a loan between $500 and $5,000 at an APR from 5.99% to 35.99% for a term of 3 to 60 months. Instead of asking for a specific credit history or collateral, a steady income and checking account is all you need to achieve approval.
- Regulated Income: Must have a regular income
(including disability and social security benefits)
- Checking Account: Must have an active checking account
- No credit history requirements
- Most lenders charge a late fee
Prosper: Best Peer-to-Peer Loan Option
Another peer-to-peer lender is Prosper. Reasonably high credit history is necessary to achieve approval with this provider, but it can be suitable for those who are on the borderline between below-average and average credit.
Prosper offers a wide range of loans: debt consolidation loans, personal loans, and home improvement lines of credit (which use the equity you’ve built up to simplify expenses).
You can borrow from $2,000 up to $40,000 on three- or five-year terms at an APR of 7.0% to 36.0%. There are fees for origination (2.4%-5%), late payments ($15 or 5% of the unpaid amount), and insufficient funds ($15) – but none for prepayment.
- Minimum credit score: 640 (average is 710)
- Minimum credit history: two years (but the average is eleven)
- Minimum annual income: none (but the average is $89,000)
- Maximum debt-to-income ratio: 50%
- Fast funding (within five days)
- No prepayment fee
- Origination and late fees
- No direct payoff to creditors for debt consolidation loans
OneMain Financial: Best Secured Loan
OneMain Financial is a trusted lender that has been around for over 100 years and specializes in personal loans for people with bad credit.
However, you may be asked to give collateral if you have a poor credit score and want a higher loan value – this could be a car, truck, or motorcycle.
You can borrow between $1,500 and $20,000 at an APR between 18.00% and 35.99%. The term lengths can be 12, 36, 48, or 60 months. As well as credit score, OneMain takes into account your income, expenses, other financial obligations, and collateral.
You can also receive personalized service in 1,600 locations in-person if you so wish. To be approved, your state of residence, whether you’ve filed for bankruptcy, income, and expenses, loan purpose, credit history, and financial history will all be considered.
- None stated
- You can receive your money on the same day
- A+ rating from Better Business Bureau
- Co-signing option
- Have to go to a branch to get your loan approved
- Might be offered a secured loan
- Only have branches in 44 states
Avant: Best Unsecured Loan
With a minimum credit score of only 580, Avant loans are suitable for a wide variety of people. A huge advantage is an access to customer support in whichever medium suits you best – phone, email, or messaging services.
Loan values are between $2,000 and $35,000 with an APR between 9.95% and 35.99%, with a term length of 24 or 60 months.
You’ll have to pay an origination fee of 0.95% to 4.75%, but there are no additional hidden fees.
- Minimum credit score: 580 (but the average is 600+)
- Minimum salary: none (but the average is $60,000)
- Access to customer support seven days a week
- Receive funds fast
- A+ rating from Better Business Bureau
- Administration fee
- Not available to residents from Colorado, Iowa, Vermont, and West Virginia
NetCredit: Best For No PrePayment Fee
NetCredit is a lender with one of the lowest credit score requirements on this list, at just 500. Naturally, this means it also offers a very high APR and tough additional fees.
You can borrow between $1,000 to $10,000 at an APR between 34% to 155%, while term lengths can be anywhere from 6 to 60 months. Depending on which state you live in, you might also have to pay an origination fee of 5%, and all borrowers have to pay a late payment fee.
However, NetCredit does offer a personal loan report from three of the major credit report agencies, a useful resource for those looking to improve their credit score.
- Minimum credit score: 500
- Minimum income: $20,000
- Low credit score requirement
- Learning resources
- Very high APR
- Late payment and origination fees
- Only available in 14 states
Upstart loans aren’t suitable for people with the worst credit score, but they’re a great option for anyone who finds themselves with a score below average.
They offer general personal loans, as well as loans for more specific purposes: debt consolidation, credit card consolidation, home improvement loans, medical loans, wedding loans, and moving loans. Qualified applicants could benefit from Upstart in reducing high-interest debt. They also boast that their borrowers save 23% compared to credit card rates.
You can receive from $1,000 to $50,000 at an APR ranging from 6.46% to 35.99% on three- or five-year terms. As well as having a minimum credit score requirement, Upstart takes into consideration your education, area of study, and job history.
- Minimum credit score: 620
- Minimum credit history: none
- Minimum annual income: $12,000
- Fast funding – can receive the money within a day
- Accepts borrowers new to credit
- Low minimum APR
- Take into account factors other than credit score
- Origination and late fees
- No secured or co-signed option
Lending Club is an established online lender that has been around for over ten years. It’s a marketplace (or peer-to-peer) lender, which means it connects borrowers directly with lenders hoping to make a good return from offering loans. You can choose between personal loans, business loans, auto refinancing, and patient solutions to work with doctors or dentists for payment plans.
Because Lending Club is a lending marketplace, there’s an option to pay your lender directly and receive a hardship plan. This makes the loan more flexible and can make payments more manageable.
You can have a loan term of either 36 or 60 months, and you can borrow from $1,000 up to $40,000. The APR ranges from 6.95% up to 35.89%, and you also need to pay an origination fee from 1% to 6%.
If you have a low credit score but manage to secure a co-signer with a better score, your requirements could drop to a 35% debt-to-income ratio and 540 credit score. You’ll receive your funds within four days.
- Minimum credit score: 600 (or 540 if you use cosigning)
- Maximum debt-to-income ratio: 40% (or 35% with a cosigner)
- Cosigning option
- Flexibility – can pay the lender directly and receive a hardship plan
- Origination fees
- High APR
Another major marketplace lender is Peerform. Peerform mostly provides personal loans, but it also has a consolidation loan program through invitation only, which offers lower interest rates to trusted borrowers.
You can receive a personal loan with a value between $4,000 and $25,000 at an APR of 5.99% to 29.99%. There’s also an origination fee of 1% to 5%.
Unlike Lending Club, there’s no option to pay your creditors directly, and you can’t apply with a co-signer. It can also take up to two weeks to receive your funds, which is much slower than the majority of lenders, who send the money within a couple of days.
- Minimum credit score: 600
- Minimum income: $10,000
- Maximum debt-to-income ratio: 40%
- A rating from Better Business Bureau
- Can pay automatically or by check
- Only available in 42 states (excludes Connecticut, North Dakota, Vermont, West Virginia, Wyoming, and Washington D.C.)
- Origination fees
- No cosigning option
If your credit score is below average and you’d like some help to build it up, Upgrade could be the one for you – it provides credit-building tools alongside its loans, including credit monitoring and educational resources.
Upgrade offers loans between $1,000 and $50,000 at an APR of between 7.89% and 35.89%. Term lengths can be three or five years. Unfortunately, there are origination fees of 1.5% to 6% of the original amount, plus a late fee of $10.
- Minimum credit score: 620
- Minimum salary: none (but the average is $30,000)
- Minimum monthly cash flow: $800
- Receive funds quickly (within one day)
- Credit-building tools
- Fees for late payment and origination
- Not available in all states (excludes Colorado, Iowa, Maryland, Vermont, and West Virginia)
350 may be almost the lowest credit score possible, but that’s all you need to secure a loan with OppLoans.
Its loan values fall between $500 and $4,000 at an APR of 59% to 199%; this makes the lower bound for OppLoans is higher than the upper bound for most other companies. Loan terms are between 9 and 36 months. You’ll face an origination fee of up to 3% and a late payment of $10.
- Minimum credit score: 350
- Minimum salary: $18,000
- Very lenient requirements
- Origination and late payment fees
- Extortionate APR
MoneyMutual specializes in short-term loans that you can receive the funds for very quickly, ideal for emergency situations. MoneyMutual isn’t a lender itself, but rather an agency that will connect you with lenders, so exact terms vary between lenders.
You can borrow up to $2,500 and receive the money within 24 hours, but the APR and loan term you’ll be able to obtain depends on the lender, so you’ll need to fill in an inquiry to find out. Nonetheless, almost two million consumers use the site, so it’s doing something right.
- Get the money quick – within a day
- The maximum loan value is small
- Lack of transparency about standard loan terms
It can be tough to find a loan if you’ve filed for bankruptcy recently, but LendingPoint is one of the few companies to accept people in this situation. It takes a variety of contextual factors into consideration, such as job history, income, and whether your credit behavior is improving.
Their APR is higher than average – between 9.99% and 35.99% – but for those with a very poor credit history, there are limited options available. Loan values are between $2,000 and $25,000, with a term length between two and four years.
- Minimum credit score: 585
- Minimum salary: $20,000
- Option to pay twice a month
- Accepts customers who have filed for bankruptcy
- High APR
CreditLoan is a hub to connect borrowers with the right lenders while focusing on financial education – its website is full of resources like interest rate calculators, mortgage information, and more.
Credit Loan offers auto loans, bad credit loans, personal loans, and student loans. You can receive a value between $250 and $40,000, but the exact loan conditions depend on which lender you are matched with.
- Can receive funds within 24 hours
- Educational resources
- Won’t find out loan conditions until you apply
Claiming to be ‘America’s most convenient bank,’ TD bank provides secured personal loans and home equity loans to its customers, as well as options for small businesses.
For those with a bad credit score, a secured loan is the best option – you’ll need a credit score of at least 660 for an unsecured loan, but there’s no credit score requirement for those offering collateral.
You can borrow from $5,000 to $50,000 for a term of 12-60 months. The interest rate is variable: TD bank uses a prime rate as indicated in the Wall Street Journal plus 2.00%. Currently, the APR is 7.42%, but it won’t exceed 18.00%. There’s also a $50 origination fee, but there are no hidden fees.
- Must use TD Bank savings, Money Market Savings or Certificate of deposit account as collateral
- 24/7 customer service
- Low APR
- High origination fee
- No fixed interest rate
The only stated requirement for Oportun is the need to have some form of regular income. It offers personal loans and auto loans. Another option is OportunPath, which gives you help between paychecks by letting you check your daily balance via text and receive quick top-ups with no fees.
They provide loans from $300 to $9,000 at an APR from 20.00% to 67.00%. Loan payments make up around 5% of borrowers’ incomes on average, which is higher than most other lenders.
However, there’s also the chance to receive free financial education with the UnidosUS scheme, and the chance to discover local nonprofit and government services.
- Regular income
- No origination fee
- Financial education available
- Auto repayment
- High rates
- Not available in all states
Capital Good Fund
Unlike other providers and marketplaces, Capital Good Fund is a nonprofit and social change organization trying to solve the problem of poverty by providing fair loans to those who need them the most. Unfortunately, it only currently serves four states: Florida, Delaware, Rhode Island, and Massachusetts
Capital Good Fund provides emergency loans, personal loans, auto purchase loans, auto refinance loans, immigration loans, and even hurricane loans to its customers. There’s also an opportunity to receive financial coaching and a Credit Builder Program to improve your credit score – you’ll be given a 0% loan to achieve this.
The requirements vary slightly between states and loans. You can get from $300 to $20,000 at a rate of 7% to 24% APR for a term of one to four years. Because the loans are designed to be accessible, your character, ability to pay, and financial situation is taken into account as well as credit history.
- Must have an income
- Proof of purpose for the loan
- Chance to improve credit score
- No origination or late fees
- Only serve in four states
Municipal Credit Union
Municipal Credit Union is a financial cooperative owned by its members, which means you’ll effectively be borrowing from other members. This results in lower standards to obtain a loan in return for being a credit union member. Unfortunately, joining the credit union can be tricky for some people – you can only join if you have the right residency area, employer, or community organization or have a family member in the union. If are able to become a member, all you need is $5 to open an account.
You can borrow from $1,000 to $50,000 at an APR of 5.95% of 7.95% (much lower than other bad credit loan providers). However, you will have to pay a late payment fee of $25 if you miss a payment. Term lengths can be between one to six years.
- Minimum salary: $15,000
- Established credit union
- Very low APR
- Must be a credit union member for a loan
Can I Get A Loan with Bad Credit?
Most of the time, all it takes to receive a loan is an easy online application, but having a bad credit score can make the process more complex.
Credit scores can range anywhere between 300 and 850. The exact definition of ‘bad credit’ differs depending on who you ask, and each credit agency has a different scoring system, but generally, anything below 630 is considered to be ‘bad.’
If you have bad credit, you’re not the only one – around 30% of Americans are in this group.
This market is too large for loan providers to ignore.
How To Get a Loan with Bad Credit
A credit score is made up of payment history (whether you pay bills on time), credit utilization (the amount of available credit you use), credit history (how long your accounts have been open), the types of credit used (credit cards, loans and/or accounts), and new credit (recently opened accounts). However, many bad credit lenders will consider other factors, such as education history or yearly salary.
As well as seeking out bad credit lenders who consider additional factors, you can sometimes boost your chances by getting a cosigner: somebody who will agree to pay off the debt if you don’t make payments. Having a cosigner with a good credit score can lower the credit requirements for a loan.
You may need to take out a secured loan, which means you’ll need to offer the lender collateral they can use in case you don’t make your payments – for example, a car. Since you’ll need to verify that you own collateral, this can draw out the process.
Some bad credit providers also prefer to speak to customers face to face before offering them a loan.
Since rejection rates are higher for people with bad credit, you also need to make use of the ‘soft pull’ credit checkers most providers offer; unlike the ‘hard pull’ that results from making a formal application, these won’t harm your credit score.
Who Else Will Give Loans with Bad Credit?
All of the companies named above provide loans to people with bad credit. You could also try going to a local bank or credit union.
Applying for a loan and receiving the funds from the comfort of your own home might sound appealing, but you may be able to get better terms by visiting a local institution instead. You’ll be dealing with a loan officer rather than an automated system, and showing up in person is a great way to prove you’re serious about improving your credit rate and sticking to the terms. There are also banks and credit unions who are keen to help their local community.
Another advantage is that your chances of approval increase if you have a checking account with a local institution due to having a transaction history. You may even get tips on improving future applications and credit score.
Can You Get a Personal Loan with a Credit Score of 550?
Various lenders are willing to give personal loans to clients with credit scores as low as 550. In fact, many providers don’t even have a minimum credit requirement at all.
The following companies all consider applicants with a credit score of 550 or less:
However, the bad news is that a lower credit score means you’ll be paying a larger APR, and most of the bad credit specialists charge fees too.
People with Poor Credit Can Get a Loan
Whether you choose to go to an online lender, peer-to-peer marketplace, or local institution, there are various options out there for people with poor credit scores to secure a loan.
If you do go ahead with applying for a bad credit loan, use the opportunity to rebuild your credit score – this means it’s of key importance for you to meet all your payments. Improving your credit score ensures you can secure a loan with better terms in the future.