Bad Credit Loans: Compare Online Options for 2020

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 lenders according to the weighted averages of five data categories to find you 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 Loan Companies
• Should You Take Out a Personal Loan if You Have Bad Credit?
• What About Payday Loans?
• Resources to Help You Improve Your Credit Score
• Bad Credit Loan Alternatives

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Find a Bad Credit Personal Loan

• Minimum credit score: 600
• Accepts joint loan applications
• Loans from lendingclub-perl-46-amountlow to lendingclub-perl-46-amounthigh

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• Minimum credit score: 580
• Get funding as soon as the next business day

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• Minimum credit score: 580
• Fast funding and flexible repayment options

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Best Bad Credit Personal Loan Companies

The following are brief reviews of personal loan companies that offer loans to those with bad credit. Click a lender to jump down to its review:

1. OneMain Financial
2. Avant
3. LendingPoint
4. Upstart

1) OneMain Financial

Overview

OneMain Financial offers personal loans to a range of borrowers, including those who have poor credit. You can fill out some information online to receive personalized rates and terms. This process involves a soft credit check that won’t damage your credit score.

To fully complete the process of taking out a loan, you must visit your local branch. You may be offered a secured or unsecured loan.

OneMain Financial uses a variety of information to determine eligibility, including income and credit history; however, they do not have a minimum credit score requirement.

Rates, Terms, & Fees

• Loan Amounts: $1,500 – $30,000
• Loan Terms: 24, 36, 48, or 60 months
• APR Range: 16.05% – 35.99%
• Origination Fee: Varies by state
• Early Repayment Fee: None
• Minimum Credit Score: None

The Verdict

Because OneMain Financial looks at an applicant’s entire financial history, not just a credit score, consumers with bad credit may still qualify for a personal loan. Though the rates aren’t as competitive for prime borrowers, the 35.99% rate max is still lower than those associated with some subprime lenders.

2) Avant

Overview

Avant offers personal loans to borrowers with bad credit in 46 states across the nation. You can get started online by submitting your name, address, Social Security number, and salary information. After that, you may receive your funding as soon as the next business day.

While there is no minimum credit score stated on the website, Avant says that most of its customers have a credit score between 600 and 700. You will also need a minimum income of $20,000 to qualify.

Rates, Terms, & Fees

• Loan Amounts: $2,000 – $35,000
• Loan Terms: 24 – 60 months
• APR Range: 9.95% – 35.99%
• Administration Fee: Up to 4.75%
• Early Repayment Fee: $0
• Minimum Credit Score: None

The Verdict

Compared to many other bad credit loan lenders, Avant offers reasonable rates and an easy application process. Avant is also a reputable company with great customer reviews across the web.

3) LendingPoint

Overview

LendingPoint offers personal loans to borrowers with a credit score of at least 585 and an annual income of $20,000.

Rates are reasonable for borrowers with low credit scores, making this loan potentially a good option for debt consolidation or emergency expenses.

Like many other online lenders, you can receive your loans quickly; sometimes as soon as the next business day. LendingPoint also gives you the choice of making bi-weekly payments or payments every 28 days which can help you fit repayment into your budget.

Rates, Terms, & Fees

• Loan Amounts: $2,000 – $25,000
• Loan Terms: 24 – 48 months
• Fixed APR Range: 9.99% – 35.99%
• Origination Fee: 0% – 6%
• Early Repayment Fee: $0
• Minimum Credit Score: 585

The Verdict

While LendingPoint’s rates are higher than those of lenders who target consumers with prime credit, they are a good option for those with poor credit.

If you apply, be sure to check what fees are included with the loan and factor that into the total cost of the loan to help make your decision.

4) Upstart

Overview

Upstart offers loans with decent rates and a wide range of loan amounts. While the website states a minimum credit score of 620, Upstart says it will accept applications from those with insufficient credit history.

The application process can be completed online and you can receive your money as soon as the next business day. To see your estimated rates and terms, you just have to submit your name, address, Social Security number, and income.

Rates, Terms, & Fees

• Loan Amounts: $1,000 – $50,000
• Loan Terms: 3 or 5 years
• APR Range: 6.53% – 35.99%
• Origination Fee: 0% – 10%
• Early Repayment Fee: $0
• Minimum Credit Score: 620 (but those with insufficient credit may be accepted)

The Verdict

To start, note that Upstart may be harder to qualify for than some of the other lenders listed on this page. If you are eligible, however, you may receive lower rates as compared to other lenders.

When applying, be sure to check what your origination fee is. This is important when determining the total loan cost and the difference between 0% and 10% is considerable.

One last benefit is that Upstart offers a 10-day grace period before late fees are charged. While it’s always smart to stay on top of your payments, if you fall behind a few days, you won’t have to pay the consequences.

>> Read more: How to Get a Loan With No Credit Check

How We Chose the Best Bad Credit Personal Loans

To find the best bad credit personal loans, our Editorial Team analyzed each product by BBB rating (10%), fixed APRs (20%), loan amounts (10%), term lengths (15%), deposit time (15%), origination fee (15%), initial soft-credit pull (10%), and customer support (5%). Learn more about our ratings and methodology here.

If you want to see some other options, check out these reviews:

• Mariner Finance
• Stilt
• Backed Loans
• Upgrade
• LendingClub

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 time, your best bet is to work on improving your credit score before you apply for a personal loan.

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 

Resources to Help You Improve Your Credit Score

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.

Here are some helpful articles to get started on raising your credit score:

• 8 Ways to Rebuild Credit
• How to Build a Good Credit Score
• How to Check Your Credit Score for Free

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
• 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.