Best Bad-Credit Loans: Top 5 Online Lenders for Personal Loans in 2022

If your credit score is less than ideal, you may find it difficult qualifying for a personal loan. Most lenders perform a credit check with the major credit bureaus as part of your loan application. If they see you have an unfavorable credit history, they may deny your application.

Thankfully, there are several online lenders that offer personal loans for borrowers with bad credit. These bad credit loan providers offer fast funding and an easy application process that only takes minutes to complete. Even better, making regular monthly payments on these loans can help improve your credit score.

However, choosing the best bad credit loan can feel overwhelming. To help you decide, we’ve reviewed the best personal loan companies that cater to borrowers with poor credit. We rated each lender on a variety of factors including interest rate, application process, speed of funds, and eligibility requirements.

Here are our top picks for the best loans for people with bad credit.

5 Best Lenders for Bad Credit Loans

• BadCreditLoans: Best overall
  
• CashUSA: Best for installment loans up to $10,000
  
• PersonalLoans: Best for larger loans up to $35,000
  
• Upgrade: Best for low APRs
  
• Avant: Best for debt consolidation
  

#1. BadCreditLoans: Best Online Loans for Bad Credit

If you’re looking for loans for bad credit, you can’t get much more straightforward than working with a company called BadCreditLoans. This free lending platform can connect you with a lender that will meet your desired loan and qualification terms.

Through BadCreditLoans, you can receive a loan amount ranging from $500 to $10,000, depending on your needs and credit history. While the exact APR you will pay depends on the loan you receive, BadCreditLoans borrowers typically pay APR ranging between 5.99% and 35.99%.

The loan terms you would need to agree to also depend on your lender and loan amount. However, most lenders through BadCreditLoans require a minimum repayment term of 90 days and a maximum period of 72 months.

To find a loan through BadCreditLoans, first head to the platform’s homepage and fill out the short form with your zip code, the last four digits of your Social Security number, and your birth date. BadCreditLoans will walk you through a few more questions, then send your information to its lenders. If eligible, a lender will reach out to you with a loan offer soon after you submit your form.

While you do not need to have perfect credit to secure a loan through this platform, you must meet a few eligibility requirements. These requirements include:

• Be 18 years or older
  
• Have proof of U.S. citizenship, such as a Social Security number
  
• Receive a regular income
  
• Have a checking account in your name
  
• Have a valid email address
  
• Provide work and home phone numbers
  

However, the exact requirements you must meet depend on your specific lender. Some lenders through the platform may have additional requirements for your credit history. Overall, BadCreditLoans is an excellent place to find personal loans for bad credit borrowers.

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#2. CashUSA: Best for Small Loans up to $10,000

CashUSA.com is another lending platform that can connect you to a personal lender that accepts borrowers with bad credit scores. This platform can help you receive a loan to consolidate credit card debt, pay for a vacation, cover a home remodel, or pay for many other personal expenses.

CashUSA.com works with lenders that can provide loans of up to $10,000 straight to your checking account. While your exact APR will vary, you can expect to pay a rate ranging from 5.99% to 35.99%. Additionally, depending on your lender’s loan terms, you can expect your loan duration to range from 90 days to 72 months.

The CashUSA.com application process is simple and takes only a few minutes from start to finish. First, you will need to complete the platform’s online form with information about how much you would like to borrow, your age and citizenship status, your current income, and your financial situation.

Once you complete your application, CashUSA.com will send your information to a range of lenders that offer bad credit personal loans. If a lender is interested in working with you, they will send you a loan offer with details about the loan terms, origination fee, and APR you would need to pay.

If CashUSA cannot connect you to a lender, the company may send you offers for debt relief or credit repair services instead. However, if you decide to accept an offer from a lender, you can receive your funds in your account within one business day. In most cases, your lender can then withdraw your fixed monthly payments from the same checking account, making it easy to repay your loan on time.

Eligibility

CashUSA.com has a few eligibility requirements you must meet to gain loan approval through the site. These include:

• Must be 18 years or older
  
• Must be a U.S. citizen
  
• Must have held your job for at least 90 days
  
• Must meet the minimum income requirements set by your lender
  
• Must have a checking account, email address, and work and home phone numbers
  

Overall, using CashUSA.com to connect with a potential online lender is an easy, convenient way to acquire a loan with bad credit.

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#3. PersonalLoans: Quick Personal Loans up to $35,000

While personal loan websites make it easy to secure loans online, many of these sites do not allow you to borrow more than $10,000. If you need a large personal loan and have a low FICO credit score, we recommend checking out PersonalLoans.

PersonalLoans is a lending platform that can connect you with reputable lenders that accept applications from people with less than perfect credit scores. This platform is entirely free to use and can connect you with loan options in just a few minutes.

PersonalLoans facilitates loans ranging from $1,000 to $35,000, an impressive maximum loan amount. This company works with lenders charging APR between 5.99% and 45.99% and requiring repayment terms between three months and 72 months.

To apply for a personal loan through this platform, your first step is to fill out the short online form. This form will include information about your desired loan amount, financial history, income, and other relevant details.

Once you submit your application, PersonalLoans will attempt to match you with one or more third-party personal loan lenders willing to offer you loans. You can then review these loan offers and choose one that suits your needs.

After accepting your loan offer, you can expect to receive your loan proceeds in your checking account within one business day. You can use these loan funds for any purpose, including to consolidate debt or pay for a significant expense.

Eligibility

PersonalLoans has a few eligibility requirements you must meet before requesting to borrow money through the platform. To secure a personal loan, you must:

• Be 18 or older
  
• Receive regular income
  
• Have a valid checking account
  
• Demonstrate a pattern of responsibility through your credit history and credit report
  

Individual lenders may have additional requirements on top of these base-level criteria. Overall, PersonalLoans is one of the best platforms to find large loans for bad credit.

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#4. Upgrade: Best for Low APRs and No Prepayment Penalties

Upgrade is a relatively new online lender that launched in 2017. Unlike most other platforms on our list, Upgrade does not simply facilitate loans with other online lenders. Instead, this platform is a personal loan lender.

Upgrade offers loan amounts ranging from $1,000 to $50,000. These loan amounts typically come with APR ranging from 5.94% to 35.97%, and your loan duration and origination fee will depend on your specific terms. Notably, Upgrade does not charge a prepayment penalty, allowing you to pay off your loan before the repayment period ends if desired.

This personal loan lender uses a quick and easy application process. Simply fill out the form on the Upgrade website to check your loan terms and rate. Doing so will not impact your credit score.

Once you review multiple loan options from Upgrade, you can choose the offer best for your financial goals and income. Upgrade will clearly lay out all of your loan terms to ensure that you understand them before signing your loan agreement. Generally, Upgrade requires a single, fixed monthly payment and charges fixed rates throughout your loan term.

After accepting a loan offer, you can expect to receive your loan proceeds within a few days. Upgrade suggests using these loan funds to refinance credit cards, consolidate debt, fund home improvement projects, or pay for major purchases. Unlike many lenders, Upgrade also encourages borrowers to use loan funds for business expenses.

Eligibility

Because Upgrade is an actual lender rather than a platform that connects you to personal loan lenders, its eligibility terms are a bit more rigid. If you’d like to borrow a personal loan through Upgrade, you’ll need to:

• Have a minimum credit score of 580
  
• Have a maximum debt-to-income ratio of 45% (excluding your mortgage)
  
• Have a minimum monthly cash flow of $800
  

These requirements are on top of meeting basic demographic criteria, such as being 18 or older and having proof of U.S. citizenship. Meeting all the company’s loan requirements should set you up for guaranteed approval.

Overall, Upgrade is a generous personal loan lender that provides personal loans for people with a minimum credit score of 580.

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#5. Avant: Best for Easy Approval

Avant is an online lender that facilitates loans through a third-party bank, WebBank. This company launched in 2012 and typically provides loans for people with moderate incomes and fair to good credit. Still, its generous eligibility requirements make it suitable for people with lower credit scores as well.

You can borrow loan amounts ranging from $2,000 to $35,000 through Avant. Avant’s APR is on the high end of the spectrum, ranging from 9.95% to 35.99%, and its repayment terms range from two to five years. These terms vary by state, but you can check your state’s specific terms on the Avant website.

If you’re interested in requesting a loan through Avant, you can start by checking your loan options on the company’s website. Checking your eligibility is completely free and will not affect your credit score.

After filling out the online eligibility form, Avant will send you an email with your loan offer. You can review all of the loan terms in this email, then redeem your offer by clicking the link in the message.

Avant makes it easy to make monthly payments on your loan. If desired, you can set up autopay, allowing Avant to withdraw your payments automatically each month. This feature ensures that you never miss a loan payment and lower your credit score further.

Eligibility

Avant has the following eligibility requirements you must meet to qualify for its unsecured personal loans:

• Have a minimum credit score of 580
  
• Have a minimum annual income of $20,000 (which can include alimony, child support, and income from other people within your household)
  

You can use an Avant loan to cover most types of expenses. However, you cannot take out an Avant loan to refinance a different Avant loan.

Overall, Avant is a reputable personal lender that offers some of the best personal loans for bad credit borrowers.

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What Is a Bad Credit Personal Loan?

When you apply for a loan, the lender will review your financial history to determine your eligibility for the loan. One of the most significant pieces of evidence lenders consider is your credit score.

Your credit score indicates your financial responsibility with past loans, credit cards, and other economic opportunities. When you have a low credit score, lenders typically assume you may fail to make monthly payments on time or repay the loan altogether, leading them not to want to risk lending money to you.

However, some lenders offer more generous eligibility terms, making these loans suitable for people with bad credit. In exchange for providing loans to people with higher financial risk, these lenders typically charge higher interest rates and implement stricter terms to make the risk worthwhile.

Bad credit personal loans are simply loans with generous eligibility requirements, making them suitable for people with poor credit scores.

How We Ranked the Best Bad Credit Loan Companies

You can find dozens of online lenders offering loans for bad credit borrowers. However, many of these lenders are untrustworthy and may be trying to scam borrowers out of their loan terms. Additionally, working with a shady lender could put you at risk of lowering your credit score further, making it even more challenging to secure a loan in the future.

When we created our list of the best bad credit loans, we reviewed numerous factors to determine each platform’s trustworthiness and safety. Specifically, we considered the following factors that make up loans for bad credit.

Eligibility Requirements

Each lending company has its own eligibility requirements that borrowers must meet to qualify for their loans. Typically, bad credit loans have more generous eligibility requirements than traditional personal loans, allowing people with low credit scores or poor credit histories to qualify for these loans.

Most lenders require borrowers to meet these base-level requirements:

• Be at least 18 years old
  
• Be able to provide proof of U.S. residence, such as through a Social Security number or ID
  
• Have some sort of regular income, whether from a job, alimony, child support, or government assistance
  
• Have an active checking account through a bank or credit union
  
• Provide a valid phone number and email address
  

Many lenders also have minimum income requirements or require you to have at least six months of consecutive employment time. Others require you to meet a minimum credit score requirement, but this minimum is typically much lower than what traditional lenders would ask for.

When we searched for the best personal loan providers to add to our list, we closely examined each lender’s eligibility requirements. We only added online lenders to our list with generous requirements that even individuals with bad credit scores can meet. Additionally, we searched for platforms that work with multiple lenders, giving borrowers a better chance of meeting a lender’s requirements.

Loan Amounts

Personal loan lenders typically determine how much they will loan you based on your credit score and credit history. As a result, if you have a bad credit score, most traditional lenders will not want to loan you more than a few thousand dollars to reduce their risk if you fail to repay your loan proceeds.

However, the best lenders for bad credit borrowers have more generous terms that allow people with poor credit scores to take out larger loans. When we chose the lenders to add to our list, we ensured that each one allowed bad credit borrowers to receive at least $10,000 in loan amounts. Several lenders on our list even permit you to take out up to $50,000 through their online loan applications.

Terms

Every loan has specific repayment terms that you must agree to when you accept your loan proceeds. These terms specify how much time you have to repay your loan in full and what percentage of the loan you must repay each month. For example, a lender may require you to pay back your loan within 10 months and pay 10% of the loan amount, plus interest, each month.

Lenders typically require stricter repayment terms for people with bad credit scores. However, when we researched lenders to add to our list, we searched for ones that allow borrowers to have more generous repayment periods, even if their credit is less than ideal. Each lender that made our list has a maximum repayment period of at least five years.

Interest Rate

Most loans come with interest rates, which are a percentage of the loan amount that you must pay on top of your loan payment each month. Interest is how lenders make money off of loans. Without interest, you and the lender would simply be exchanging the same amount of money back and forth.

Personal loans typically charge interest in the form of APR, which is the “annual percentage rate.” In simple terms, APR is the interest rate you will pay for a whole year. APR sometimes also includes fees you must pay to receive the loan, such as closing costs or origination fees.

Bad credit loan rates are typically higher than the interest rates for traditional personal loans. This is because lenders typically raise interest and charge a higher origination fee if they see you as a financial risk. However, some personal loan lenders have lower APR than others.

The bad credit lenders we added to our list all charge fair APR, making them accessible for a wide range of borrowers. Some of these lenders charge as low as 5%, which is lower than the average loan APR for personal loans.

Speed of Funds

Personal loans are notorious for getting money into your bank account quickly. If a bad credit personal loan requires several weeks of processing time before you receive your loan, you may not gain access to the money when you need it, making the loan useless.

Speed of funds was one of the most important aspects we considered when determining the best loans for bad credit. Each of the loan options on our list comes with a fast online application process and can allow you to receive your loan amount within a few business days. Often, you can see your funds in your account within one day after your application goes through.

Application Process

Sometimes, personal loan companies require you to go through an extensive application process and provide several pieces of evidence to submit your application. Unfortunately, if you have a bad credit score, you may need to apply to several lenders before gaining approval. Filling out several lengthy applications will take a significant amount of time.

As a result, we searched for lenders with short, easy applications. All of the lenders on our list only require you to fill out a few pages of information and advertise that their applications take just a few minutes to complete.

Additionally, because most of these lenders guarantee approval if you meet their eligibility requirements, you won’t need to worry about filling out multiple applications to receive your personal loan. If you want to save even more time, you can apply through one of the lending platforms on our list that connects borrowers to multiple lenders.

How To Get an Online Loan With Bad Credit

The modern lending industry has made it incredibly easy to take out a personal loan. Even if you have a bad credit score, you can apply for numerous personal loans right from your computer or mobile device, receive fast approval, and see your loan proceeds in your bank account within days. You don’t even need to visit a bank or credit union to take out these loans.

While every bad credit loan company can determine its own lending process, you can typically follow this process to get an online loan with bad credit:

Fill out the application on the lender’s website: Typically, you will need to specify your desired loan amount, your purpose for the loan, your monthly or yearly income, and your credit score as part of your application.

Await loan approval: Once you submit your application, the lender will review your information and determine whether you meet its requirements. Most lenders also perform a hard credit check, which may lower your credit score by a few points. This step typically takes a few days at most.

Review your terms: Once the lender sends you an offer, we recommend reviewing the APR, loan duration, origination fees, monthly payments, and penalties closely before accepting the offer.

Receive your funds: Within a few days of your initial application, you will receive the loan amount in your checking account.

If you have applied for bad credit loans in the past to no avail, you may need to change a few pieces of your application to improve your eligibility. Here are a few tips to help you receive approval for an unsecured personal loan:

Improve your credit score: Even though consumers with bad credit can often receive unsecured loans, you may not qualify for any loans if your credit score is too low. Taking time to improve your credit score can increase your chances of being eligible for a loan. The first step in improving your score is requesting a copy of your credit report from the three credit bureaus.

Add a co-signer: When you apply for a loan through a bank or credit union, your lender may encourage you to add a co-signer to your loan agreement to reduce the risk that you will fail to repay the loan. A co-signer would be responsible for your monthly payments if you stopped repaying your loan.

Evaluate your budget: If you are having trouble receiving approval for a considerable loan amount, you may want to evaluate your budget and lower the amount of money you request through a loan. If you do not make enough money to repay a significant loan, no lender will approve your loan application.

Pay off other loans: If you currently owe money on one or more personal loans or credit cards, lenders may decide that your credit utilization rate is too high to loan you additional money. Additionally, a steep debt-to-income ratio can make lenders hesitant to work with you. Paying off these loan amounts first may give you a better chance of securing a personal loan through an online lender.

Consider a secured loan: Most of the lenders on our list exclusively offer unsecured loans, meaning you do not need to put up any collateral to receive them. However, if you are struggling to obtain loan approval, you may want to apply for a secured loan instead.

How To Identify a Bad Credit Loan Scam

Unfortunately, loan scams are relatively common in the online loan industry. You no longer need to go through credit unions or legitimate banks to receive an online loan. Sometimes, it can be challenging to determine whether a lender is trustworthy and honest or is trying to scam you.

However, falling for a loan scam can be detrimental to your financial health. Loan thieves can take money from your bank account, sell your personal information, and even steal your identity. At the very least, loan scams can lower your credit score further, decreasing your financial opportunities.

Thankfully, untrustworthy loan companies often have a few tell-tale signs that indicate they are trying to scam you. Here are several ways you can identify bad credit loan scams.

Claims of Instant Approval

No legitimate lender can instantly approve your loan application. Even the most generous lenders need to take time to review your credit history through your credit report and determine your financial responsibility. If a company claims to approve loan applications instantly or sends you an instant approval email, you can assume it is a scam.

Requests for Origination Fee in Cash or From Debit Account

Most lenders deduct your origination fees, application fees, and other associated charges from your loan amount. For example, if you request a $10,000 loan amount and must pay a 1% origination fee and 1% application fee, the lender will actually give you $9,800, deducting those fees from your loan.

However, scammers often attempt to make money by requesting that you pay your origination fee and other expenses upfront with cash or a debit card. This request ensures that the scammers receive some money from you before you figure out their deceptive practices.

Generally, if an online lender requires you to pay your origination fee yourself and does not deduct it from your loan amount, you can assume the loan is a scam.

Shady Advertising Methods

Legitimate lenders do not reach out to people blindly to tell them about their loans. Trustworthy lenders already have plenty of customers and do not need to use cold calls to remain profitable. If a lender ever calls or emails you out of nowhere to tell you about its loans, you can assume it is trying to scam you.

No Registration in Your State

Even the trustworthy lenders on our list do not offer unsecured personal loans to citizens of every U.S. state. This is because lenders must receive registration in each state to provide loans within that area.

You should always check that a lender has the necessary registrations within your state before accepting its loan. If you find any unauthorized lenders, we recommend reporting them to the Consumer Financial Protection Bureau.

Unsecured Website

When you apply for an online loan, you should make sure the website you are applying through is secure and safe before providing any personal information. One easy way to determine a website’s security is to examine its web address.

If a website has “HTTPS” at the beginning of its URL, it is probably safe. However, if the site has a flag that says, “Not Secure,” we recommend finding a different online loan provider.

No Listed Address

Whether you are applying through a credit union, bank, or general lender, you should always verify that the lender corresponds to a physical address. If a lender does not list an address on its website, it may be untrustworthy.

Types of Loans for People With Bad Credit

If you have a bad credit score, you have a few options to secure a loan aside from the online personal loans on our list. However, each loan type has its own advantages and disadvantages, and understanding it is essential to gaining the most benefits from your loan.

Here are the different types of loans you can receive with a bad credit score.

Secured & Unsecured Personal Loans

The two primary types of personal loans for bad credit are secured loans and unsecured loans.

A secured loan requires you to put up some sort of collateral to receive your loan amount. Collateral can include any high-value asset you own or make payments on, such as your house, car, property, or fine jewelry. If you fail to make your loan payments on time, your lender can seize your collateral and sell it to repay your loan.

Secured loans are typically easier for people with poor credit to receive because they come with less risk to the lender. However, failing to repay these loan amounts can be expensive, so you should make sure you can afford your monthly payment before agreeing to a secured loan.

Meanwhile, unsecured loans do not require any collateral. As such, these loans typically have higher interest rates than secured loans. Additionally, if you have a poor credit score, you may struggle to find unsecured loans with fair terms.

Payday Loans

Payday loans are short-term loans that use your next paycheck as collateral. Typically, these loans are for the total amount of your next paycheck.

When you apply for a payday loan, you typically need to give the lender access to your checking account or write them a post-dated check that they can cash when you receive your next paycheck. In theory, payday loans allow you to receive your paycheck a few days or weeks in advance, giving you access to a small amount of cash to pay for necessary expenses.

However, payday lenders typically charge outrageous interest rates that require you to pay back double or triple your original loan amount. If you already spent the cash from the loan, you may have trouble paying back your loan plus interest, requiring you to take out another loan. Additionally, payday lenders often charge prepayment penalties if you attempt to pay off your loan early.

Many consumers who take out payday loans fall into an endless cycle of debt because of these high interest rates.

Cash Advances

Cash advances are short-term loans you can sometimes receive through your credit card company. When you take out a cash advance, you essentially borrow money against your remaining balance on your credit card. Typically, credit card companies provide you with these funds by allowing you to withdraw them from an ATM using your credit card.

Cash advances can provide you with a fast way to receive a small amount of money. However, these loans typically have higher interest rates than your credit card’s usual APR, making them more expensive in the long run.

HELOCs for Poor Credit

Taking out a home equity line of credit (HELOC) is another way to receive a loan if you have a poor credit score. HELOCs are essentially secured loans that use your house as collateral. However, these loans act similarly to a credit card, as you can choose to borrow only as much as you need at a given time, then repay your borrowed amount with interest.

If you’ve had trouble qualifying for an unsecured loan, searching for HELOCS for people with poor credit may expand your opportunities. However, you should be sure that you can afford to pay back the loan amounts you withdraw, as your house would be on the line in this loan type.

Car Loans

If you need money to purchase a car, you can consider taking out a car loan through a dealership or credit union. Car loans provide you with the funds you need to pay for a new or used vehicle and use your new car as collateral. As such, if you fail to repay your loan on time, the dealership or lender has the right to seize your vehicle.

Like most personal loans, car loans tend to have higher interest rates the lower your credit score is. However, many lenders do not have any minimum credit score requirement for car loans, making them accessible for people with bad credit.

Car loans also tend to come with a prepayment penalty. A prepayment penalty may leave you with an additional fee for attempting to pay off your loan faster than anticipated.

Personal Loans vs. Payday Loans

If you’re looking for loans for bad credit, you may be unsure whether personal loans or payday loans are right for your needs. While a loan from a payday lender may be easier to qualify for than a personal loan for bad credit, it will likely be much more expensive.

As you may have noticed from our list, even the most expensive personal loans have an APR of around 36%. However, the average payday loan APR is upwards of 660%. While payday loans may be easy and convenient, they are often not worth this steep APR.

Some credit unions have begun offering payday alternative loans (PALs) with much lower interest rates. These loans can provide you with a small, short-term loan amount with a maximum interest rate of 28%, making them much more affordable than payday loans.

Frequently Asked Questions

Can You Use Personal Loans for Debt Consolidation?

You can take out a personal loan for debt consolidation or credit card consolidation. Some lenders offer specific debt consolidation loans, which allow you to pay off the balances on multiple loans, essentially combining them into a single loan amount. However, you can also use general personal loans as debt consolidation loans if you’d like.

Once you receive a loan amount from a lender, they can’t really control what you do with the money. As such, you can use your loan amount for debt consolidation or pretty much any other purpose.

Can You Get a Bad Credit Loan Without a Credit Check?

You cannot receive a personal loan without a credit check. Lenders must check your credit score to determine your interest rates and terms. However, the type of credit check lenders perform can vary.

Some lenders only perform a soft credit check for loan applications, which would not impact your credit score. However, lenders often perform a hard credit inquiry as part of your application, which may lower your credit score by a few points. Most lenders report loan applications to credit reporting agencies, such as the three major credit bureaus.

It can sometimes be challenging to know whether a loan application will impact your credit score. As such, we recommend waiting to apply for a loan until you are sure you need one.

What Are Bad Credit Loans Mostly Used For?

When you apply for loans for bad credit, you must state what you plan to use your loan amount for. Even though lenders can’t verify that you use your loan for bad credit as intended, it’s always smart to plan how you will use your loan amounts to avoid defaulting on your loan.

People take out these unsecured loans for a range of reasons. Here are the most common uses for bad credit loans:

Debt Consolidation

If you feel overwhelmed with extensive loan payments or credit card debt, you may want to consider taking out a large unsecured loan with a lower interest rate than what you currently pay on your debt. This practice, known as debt consolidation, can also make it easier to manage your debt, as you will only need to keep track of one payment.

Student Loans

While federal student loans typically have lower interest rates than loans for bad credit, not everyone can qualify for student loans. If you are looking for a way to pay for school, a loan for bad credit could give you the supplemental income you need.

Medical Bills

Many people use their personal loan amounts to tackle medical bills that their health insurance did not cover.

Car Repairs

If your car needs an expensive repair and you do not have enough money in your savings account to cover the expense, a personal loan can give you the fast funds you need to fix your car.

Home Renovation

People often use small personal loans to cover the costs of major home renovations. This use is especially practical if you plan to sell your house, as your increased property value could make it easier to pay off your loan after the sale.

What Is Considered a Bad Credit Score?

A “bad” credit score isn’t simply a matter of opinion. Credit bureaus categorize credit into specific credit score ranges that allow lenders and other financial institutions to evaluate a person’s financial responsibility. According to Experian, these ranges are as follows:

• Exceptional: 800-859
  
• Very good: 740-799
  
• Good: 670-739
  
• Fair: 580-669
  
• Poor: 300-579
  

If your credit score falls in the “fair” credit score range, you may be able to qualify for the loans on our list. However, lenders like Upgrade and Avant have a minimum credit score requirement of 580. If your score is below 580 and in the “poor” range, you may have more trouble finding a loan.

Some lenders also consider your entire credit report rather than just your credit score. Your credit report provides details about the financial activities that make up your score.

If lenders see that you have defaulted on several loan amounts in the past, they may hesitate to work with you. However, if your score has decreased due to prepayment penalties, you may have a better chance of securing a loan.

What Interest Rate Can I Expect on a Bad Credit Loan?

The interest rate a lender charges you plays a significant role in your ability to pay off your loan amounts on time. If your interest rate is too high, you may be unable to afford your monthly payments, leading to a cycle of debt that is difficult to end.

The bad credit loans on our list charge APR ranging between 5% and 36%. We recommend filling out several applications on a few different platforms to find a loan with the lowest interest rate possible. However, keep in mind that the lower your credit score, the higher your interest.

Final Thoughts

If you have a low credit score, qualifying for a personal loan can be challenging. Most traditional lenders have a minimum credit score that you must meet to become eligible for their loan amounts. Failing to meet this minimum credit score requirement may immediately disqualify you from loan applications.

However, numerous online platforms offer loans specifically for people with bad credit. These loans have higher APR and stricter terms than traditional loans, but they may be worth the fees if you are in serious need of fast cash.

You can also take a few steps to improve your eligibility for a personal loan, such as by adding a co-signer to your loan application and lowering your debt-to-income ratio. However, if you want to gain access to more affordable loans, we recommend focusing your efforts on increasing your credit score. Doing so will broaden your financial opportunities significantly.