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While bad credit can make it harder to obtain affordable financing, that doesn’t mean you can’t qualify for a bad credit loan. You just need to look for lenders who offer financial products for people in your credit range.
We ranked and rated our partner lenders to help you find the best personal loans for bad credit.
Note that we do not recommend any lenders offering loans with APRs above 36%. Before turning to those loans, you should see if you can qualify for the lenders on this page, other loans with rates under 36%, or the alternatives highlighted below.
In this guide:
- Best Bad Credit Personal Loans
- Should You Take Out a Personal Loan if You Have Bad Credit?
- What About Payday Loans?
- Bad Credit Loan Alternatives
Best Bad Credit Personal Loan Companies
Bad Credit Personal Loan Options
The following are brief reviews of our personal loan partners that offer loans to those with bad credit.
7.99% – 35.97%
$1,000 – $35,000
Upgrade is a great option for borrowers on the higher end of the bad credit spectrum, as well as those that need smaller loans.
One benefit of Upgrade is that you can check your eligibility and rates without affecting your credit score. Also, eligibility is based more on free cash flow as compared to other lenders, so you may qualify for a lower rate with Upgrade as compared to other bad credit lenders.
- Soft credit pull to check rates: Yes
- Deposit time: As soon as the next day
- Origination fee: 2.9% – 8%
- Late fee: $10
- Repayment terms: 36 or 60 months
6.27% – 35.99%1
$5,000 – $30,0002
Upstart is another good option for borrowers with bad credit as they offer competitive rates, a large range of loan amounts, and funding as fast as one business day3.
You can check your rates without affecting your credit score4 and use the funds for almost any expense. Note that the minimum credit score for Upstart varies based on which state you live in.
- Soft credit pull to check rates: Yes
- Deposit time: As fast as one business day
- Origination fee: 0% – 10%
- Late fee: $5 or 15% of payment (whichever is higher)
- Repayment terms: 36 months or 60 months
>> Read more: How to Get a Loan With No Credit Check
How We Chose the Best Bad Credit Loans
To find the best bad credit personal loans, our Editorial Team analyzed each of our lender partners for BBB rating, Trustpilot rating, interest rates, loan amounts, term lengths, deposit time, origination fees, late fees, other fees, initial soft-credit pull availability, benefits, and more. Learn more about our ratings and methodology here.
If you want to see some other options, check out these reviews:
Should You Take Out a Personal Loan if You Have Bad Credit?
What do you need it for?
If you have bad credit and are considering a personal loan, the most important thing you can do is to consider why you need the loan. If you’re paying off high-interest debt or have a pressing emergency, a personal loan can be a reasonable financing option.
However, because personal loans for bad credit often come with extremely high interest rates and fees, the total cost of the loan rarely merits unnecessary purchases. As such, you may want to consider other options before you use a personal loan to purchase a car, remodel your home, or go on vacation.
Can you improve your credit score first?
If you have bad credit, it’s not the end of the world. You can still qualify for loans from some lenders, but you might decide to wait and improve your credit if you are rejected for a loan or want better interest rates.
There are a lot of ways that you can improve your credit, but not all of them are quick fixes. The best way to improve your credit is to borrow responsibly and repay your debt over time.
If you can boost your score up even 20 points you may be eligible for different lenders and better rates. This can go a long way in how much your loan ends up costing you.
Be prepared for repayment if you do take out a loan
If you do need to take out a personal loan with bad credit, then it’s imperative that you make sure your budget can accommodate repayment obligations for the life of the loan.
By making regular payments, you may find that a personal loan can help build your credit; however, failure to make timely payments can have an adverse effect, leaving your score even lower than it was.
>> Read more: Where to Find Small Personal Loans
What About Payday Loans?
Though a payday loan may seem like an attractive option for those with bad credit, they typically represent one of the most dangerous lending products on the market today.
Payday lenders offer immediate cash in exchange for automatic payment (via postdated check or auto deduction agreement). Repayment, however, includes the loan amount as well as a significant amount of interest, often in the realm of 400%.
These loans often make it even harder to get out of debt and can be detrimental to your financial future.
>> Read More: Alternatives to Get Out of the Payday Loan Cycle
Bad Credit Personal Loan Alternatives
Before taking out a bad credit loan, it’s important to consider if there are cheaper alternatives you can turn to instead. The largest driver of the total cost of your loan (and most financial products) is the interest rate and associated fees.
Here are some guides to other financial products that you may want to explore before taking out a bad credit personal loan:
- Secured Personal Loan
- Secured Credit Cards
- Bad Credit Home Equity Loans
- Peer-to-Peer Loans
- Credit Union Personal Loans
- Personal Lines of Credit
Bottom Line: Finding the Right Bad Credit Loan
Though bad credit can make it harder for you to secure a personal loan, it’s not impossible. There are several lenders who specialize in subprime lending and are eager to work with consumers who have poor or non-existent credit.
However, keep in mind that these bad credit loans typically come with high interest rates and limited terms. As such, it’s best to consider your reason for the loan, and if possible, work on improving your credit score before applying.
1 The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 15% and 36 monthly payments of $33 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
2 Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
3 If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.
4 When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information will be reported to the credit bureaus.
Author: Jennifer Lobb