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Best personal loans for bad credit in December 2024

Dec 11, 2024

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PERSONAL LOANS

BEST EGG: BEST FOR SECURED LOAN OPTIONS

4.6
Est. APR
6.99- 35.99%
Loan term
3-5 yrs
Loan amount
$2k- $50K
Min credit score
600

PERSONAL LOANS

Upstart: Best for limited credit history

4.8
Est. APR
7.40- 35.99%
Loan term
3-5 yrs
Loan amount
$1k- $50K
Min credit score
300

PERSONAL LOANS

Avant: Best for lower credit scores

4.7
Est. APR
9.95- 35.99%
Loan term
2-5 yrs
Loan amount
$2k- $35K
Min credit score
550

PERSONAL LOANS

Upgrade: Best for quick small loans

4.7
Est. APR
9.99- 35.99%
with AutoPay
Loan term
2-7 yrs
Loan amount
$1k- $50K
Min credit score
580

PERSONAL LOANS

ONEMAIN FINANCIAL: BEST FAST-FUNDING BAD CREDIT LENDER

4.4
Est. APR
18.00- 35.99%
Loan term
2-5 yrs
Loan amount
$1.5k- $20K
Min credit score
Not disclosed

PERSONAL LOANS

LendingPoint: Best for low minimum rate with many repayment terms

4.4
Est. APR
7.99- 35.99%
Loan term
2-6 yrs
Loan amount
$1k- $36.5K
Min credit score
600

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Compare rates on personal loans for low credit from Bankrate’s top picks

Use this table to quickly compare key points that make it easier to find the best lender for your credit situation. Ensure you meet the lender requirements so that you can secure a loan that is within your budget. 

LENDER BEST FOR EST. APR LOAN AMOUNT LOAN TERM MIN. CREDIT SCORE
Upstart Limited credit history 7.40%-35.99% $1,000-$50,000 3 - 5 years No Requirement
OneMain Financial Same-day bad credit funding 18.00%-35.99% $1,500-$20,000 2 - 5 years Not specified
Upgrade Quick small loans 9.99%-35.99% $1,000-$50,000 2 - 7 years 580
Best Egg Unique secured loan options 6.99%-35.99% $2,000-$50,000 3 - 5 years 600
Avant Lower credit scores 9.95%-35.99% $2,000-$35,000 2 - 5 years 550
LendingPoint Low minimum rate with many repayment terms 7.99%-35.99% $1,000-$36,500 2 - 6 years 600

A closer look at our top bad credit loan lenders

In the following section, we take a deep dive into lender details to help you decide which lender is best for your credit situation. We explain why each pick stands out against other bad credit lenders and how they compare to industry averages. When available, you’ll see unique proprietary data showing how other fast real Bankrate users received their funds from each company.

Upstart: Best for limited credit history

Upstart
Rating: 4.8 stars out of 5
4.8

Overview: Upstart is Bankrate's pick for overall best bad credit loan for a number of reasons. From its tight funding timeline to its exceptionally low minimum requirements, the lender stands out for credit-challenged borrowing across the board. One major reason it tops the best list is that Upstart doesn’t just look at your credit score. It factors in job history and educational background, which makes it possible for people with bad or no credit history to get approved.

Est. APR
7.40%–35.99%
Loan amount
$1k– $50k
Min credit score
300

OneMain Financial: Best fast funding bad credit loans

OneMain
Rating: 4.4 stars out of 5
4.4

Overview: OneMain Financial offers same-day funding to qualified borrowers — even as soon as one hour after closing. But double-digit minimum APRs make it one of the more expensive bad credit lenders.

Est. APR
18.00%–35.99%
Loan amount
$1.5k– $20k
Min credit score
Not specified

Upgrade: Best for quick small loans 

Upgrade
Rating: 4.7 stars out of 5
4.7

Overview: Upgrade is headquartered in San Francisco and has helped millions of customers access credit. It has a minimum score requirement of 600, and it's one of the two lenders out of all our featured best bad credit loans that offers loans as small as $1,000.

Est. APR
9.99%–35.99%
Loan amount
$1k– $50k
Min credit score
580

Best Egg: Best for secured loans

Best Egg
Rating: 4.6 stars out of 5
4.6

Overview: Since its inception in 2014, Best Egg has funded over 1.1 million loans. Its loans have similar rates, amounts and terms as other bad credit lenders, but it offers personal loans that can be secured by your car or home fixtures.

Est. APR
6.99%–35.99%
Loan amount
$2k– $50k
Min credit score
600

Avant: Best for lower credit scores

Avant
Rating: 4.7 stars out of 5
4.7

Overview: Headquartered in Chicago, Avant has offered solutions to potential borrowers with less-than-perfect credit for over 10 years. Against the wider lending landscape, Avant offers shorter terms and requires a lower minimum credit score than average. 

Est. APR
9.95%–35.99%
Loan amount
$2k– $35k
Min credit score
550

LendingPoint: Best for low minimum rate with many repayment terms

Lending Point
Rating: 4.4 stars out of 5
4.4

Overview: Georgia-based LendingPoint is a fintech company that uses AI to qualify more consumers than more traditional models. Its loans have a fairly limited amount range, but its low minimum APR and additional loan terms set it apart.

Est. APR
7.99%–35.99%
Loan amount
$1k– $37k
Min credit score
600

What are bad credit loans?

If you have poor credit, it can be more difficult to find a lender willing to lend to you, as many lenders have minimum credit score requirements over 600. A bad credit personal loan can solve that problem, as they are typically designed for borrowers who have a credit score at or below 600.

Some lenders have a higher bar for what they consider “bad credit.” That may be because they specialize in loans for good or excellent credit borrowers or just prefer not to take the risk on borrowers with scores below a certain level. Make sure you know that minimum credit requirement before you apply. Some lenders may consider anything under 620 to be bad credit. 

The process of applying for a bad credit loan is much the same as any other personal loan. The only difference is that you’ll likely pay a higher APR and may be offered a smaller loan or shorter term than a good or excellent credit borrower.

Bad credit loan funds can be used for a variety of different needs. 

  • Bad credit debt consolidation loans are often a popular choice to pay off a pile of high-interest credit cards.
  • Bad credit emergency loans are useful for funding urgent expenses, such as car repairs or medical procedures, without depleting your savings account.

Average personal loan rates by credit score

As of December 4, the average personal loan interest rate is 12.29 percent, according to a Bankrate study. Your rate may vary depending on your credit score and financial situation. As a bad-credit borrower, your rates are likely to be above the national average.

Credit rating Credit score Average loan interest rate
Bad 300–629 28.50%-32.00%
Fair 630–689 17.80%-19.90%
Good 690–719 13.50%-15.50%
Excellent 720–850 10.73%-12.50%

How the Federal Reserve impacts bad credit loan rates

The Federal Reserve sets the rate at which banks lend to each other. The higher the rate, the more expensive it is to take out a personal loan. In the November 2024 Fed meeting, the Federal Reserve cut rates by one-quarter of a percentage point. This, along with the September half-point cut, lowered personal loan rates — but only slightly. Since personal loans are more short-term, they aren’t as affected by changes the Fed makes to rates. 

While experts predict more rate cuts in 2025, the recent election may change the future. In the November meeting, Fed Chair Jerome Powell was careful not to give any “forward guidance” on the future of rates.

Even if rates drop, they’ll still be higher for bad credit borrowers than those with good or excellent credit scores. If credit card debt is hurting your scores, it may be worth it to look into a bad credit consolidation loan.

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LEARN MORE ABOUT

Personal Loan Interest Rate Forecast For 2024

Average personal loan interest rates hover around 12 percent in early 2024.

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Pros and cons of bad credit personal loans 

Personal loans for borrowers with bad credit can provide access to quick cash in an emergency or relief from high-interest rate credit card debt. However, there are disadvantages to consider before making a decision. Fully weigh the pros and cons of bad credit loans before taking one out.

Green circle with a checkmark inside

Pros

  • Save hundreds of dollars in interest compared to credit cards.
  • Pay off revolving debt like credit cards and boost your credit score.
  • Get funds within one business day.
  • Avoid putting your car or home at risk.
  • Qualify more easily than with home equity loans.
Red circle with an X inside

Cons

  • Incur origination fees up to 12 percent of the loan amount.
  • Receive funds all at once instead of reusing credit.
  • May not qualify if you don’t have a steady income.
  • Pay higher interest rates and costs than home equity loans.
  • Receive shorter terms than home equity loans or cash-out refinances.

Types of bad credit loans

Personal loans aren't the only type of bad credit loans available. Each serves a different purpose and caters to a specific financial need. 

How to get a personal loan with bad credit 

You can get bad credit loans at the same places you would look for traditional loans, such as banks, credit unions and online lenders. There are five key steps to keep in mind when getting a loan with bad credit.

For a more in-depth explanation as to why these steps are crucial and how to find the loan for your credit situation, visit our guide on how to get a personal loan with bad credit

1. Conduct a financial wellness check

Before you take out a new loan with bad credit, take a broader look at your financial situation. If you’re having trouble paying bills, maybe it’s time to check your monthly spending, see if you can get better deals on auto insurance or pick up a side hustle to earn a few hundred extra dollars each week. A bad credit score may be a warning sign that it’s time to seek assistance in improving your money habits.

2. Check your credit score, income and other debts

Before beginning the process of applying for a personal loan, get familiar with your credit report and your overall credit health. Most lenders use the FICO or VantageScore scoring models. Look for errors like unreported payments or credit card balances you’ve paid off. Dispute them at least 30 days before you plan to apply for the loan to give your report and credit score time to reflect the corrections. 

A stable income and a low debt-to-income ratio are also crucial to getting approved for a bad credit loan. A salaried or full-time hourly job gives you a better chance at approval than variable income from tips or self-employment. 

3. Compare bad credit lenders

Community banks, credit unions and online lenders may offer bad credit loans. Keep a close eye on fees which may vary significantly between lenders. It’s smart to use a personal loan calculator to help you determine whether the new debt payment will fit into your monthly budget.

Check into secured loans if you don’t qualify for unsecured loans. They may be easier to get approved for, since they require collateral like a car or home. Just remember the bank could repossess your asset if you can’t pay the loan back. 

4. Get prequalified

Prequalifying involves entering some basic information about yourself, including your name, address and income. You also authorize the lender to perform a “soft credit check,” which won’t harm your credit score. Based on the information you provide, the lender will present a list of loan offers that you might qualify for. 

At this point, add a co-signer if necessary. This is a close family member or friend who agrees to sign onto the loan with you. Co-signers, if creditworthy enough, can help you get a better rate, a higher loan amount or improve your approval odds. 

5. Be prepared for a hard credit check

When you apply for a loan, the lender initiates a hard credit check — also called a hard pull. These credit inquiries affect your credit score by temporarily decreasing it by up to 10 points. If you apply for multiple loans outside of a two week period, it may result in additional hard credit checks.

6. Get your funds

Once you have a finalized offer from the lender, review the loan agreement in full. The time to receive your funds after signing will vary based on the lender you choose, but can take as little as one business day. You’ll need a valid bank account for the lender to deposit your funds into.

Ask the experts: If I get a bad credit personal loan, can I refinance it later?


Nationally recognized student financial aid expert

"You may be able to refinance a bad credit personal loan, depending on your specific circumstances. You might qualify for a new loan at a lower interest rate if your credit score has improved or prevailing interest rates have decreased. If your income has increased or you’ve paid down other debt, your debt-to-income ratio may have decreased, making you more attractive to potential lenders. Adding a cosigner with very good or excellent credit can help you qualify for a lower interest rate. Lender criteria may vary, so it pays to shop around."

Senior writer, Loans

"It may be worth it to refinance a bad credit personal loan if your scores have improved enough to get a much lower rate. First, determine if your lender charges a penalty for paying the loan off early. If they do, a refinance may not make financial sense because the prepayment penalty costs will eat into your refinance savings. Second, if the lender charges fees for your refinance, calculate your refinance breakeven point. For example, if a refinance will save you $50 per month but costs you $1,000, it will take you 20 months to recoup the refinance costs. Refinancing makes sense if you plan to keep the loan for more than 20 months. Finally, avoid extending your term if possible. An example of this would be if you have three years left on a five-year personal loan term, try to refinance to a new loan with a three-year term, so you don’t start the five-year payoff clock again."

Alternatives to bad credit loans

Bad credit loans carry a reputation for high interest rates which can lead to long-term financial damage. Before committing to a loan you're not positive you can manage, consider the alternatives.

How to spot bad credit loan scams

Avoid potential scams while shopping lenders by being aware of these eight signs of a personal loan scam.

  1. The lender guarantees approval: If you come across a lender that doesn’t ask about your payment history before assuring you that you'll be approved, you might be dealing with a predatory lender.
  2. The lender charges upfront fees: Reputable lenders don’t ask for any money to approve you or give you funds. Most deduct fees from the amount funded and provide easy-to-understand written disclosures that give you all the details about the loan you’re taking out.
  3. The lender pressures you to act immediately: If a lender claims it can press charges if you don't accept or claims that the offer expires within the same day, it’s a scam.
  4. The lender gives you unsolicited offers: Unsolicited loan offers via email, phone calls, and door-to-door solicitation are not legitimate advertising practices of trustworthy lenders.
  5. The lender doesn't have clear contact information: If it's difficult to find the lender’s contact information or you receive emails and texts with clickable links or strange email addresses, it’s a red flag for a scammer.
  6. The lender has no physical address: Although online lenders exist, all reputable institutions should have a physical address listed as its headquarters on the website. 
  7. The lender isn't registered in your state: The Federal Trade Commission (FTC) requires that lenders be registered in the state where they do business. Research whether the business is licensed in your state.
  8. The website is not secure: 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.
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Bankrate insight

If you get involved in a bad credit loan scam, dispute the charge with your bank or credit card issuer, change your passwords, monitor your accounts and report the scam to the FTC.

FAQs about bad credit loans

How we chose our best bad credit loan lenders

Bankrate's trusted personal loans industry expertise

48

years in business

45

lenders reviewed

20

loan features weighed

900

data points collected

To select the best personal loans, Bankrate’s team of experts evaluated over 40 lenders. Each lender was ranked using a meticulous 20-point system, focusing on four main categories: