Check Your Personal Loan Rates
Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.
It's possible to get a loan even if you have bad credit. While your credit score will keep you from getting a great APR, you can still find interest rates that are much lower than those you’d likely find on payday loans. Our recommendations for the best bad-credit personal loans have flexible eligibility requirements and lower rates than alternative sources like payday lenders.
Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.
By: Hanneh Gundersen
As of Tuesday, August 11, 2020
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The loan lenders listed here are selected based on factors such as credit requirements, APRs, loan amounts, fees and more.
| Lender |
Best for:
|
Min. Credit Score
|
Est. APR
|
Min. Loan Amount
|
Max. Loan Amount
|
|---|---|---|---|---|---|
| Bad Credit Loans |
Poor credit scores
|
Not specified
|
5.99%–35.99%
|
$500
|
$5,000
|
| Upstart |
Limited credit history
|
600
|
4.66%–35.99%
|
$1,000
|
$50,000
|
| OneMain Financial |
Secured loans
|
Not specified
|
18.00%–35.99%
|
$1,500
|
$20,000
|
| TD Bank Personal Secured Loan |
Credit building
|
Not specified
|
Starting at 5.67%
|
$5,000
|
$50,000
|
| Avant |
Unsecured loans
|
580*
|
9.95%–35.99%
|
$2,000
|
$35,000
|
| LendingPoint |
Flexible repayment options
|
585
|
9.99%–35.99%
|
$2,000
|
$25,000
|
| Upgrade |
Fast funding
|
620
|
7.99%–35.97%
|
$1,000
|
$35,000
|
| LendingClub |
Online experience
|
600
|
10.68%–35.89%
|
$1,000
|
$40,000
|
Avant's minimum credit score is 580 FICO and 550 Vantage.
Bad credit refers to a low credit score or a short credit history. Things like late payments or maxed-out credit cards are financial missteps that can lower your credit score.
Bad-credit loans are an option for people whose credit reflects some financial missteps or people who haven’t had time to build a credit history. These loans are either secured (backed by collateral like a home or car) or unsecured. Interest rates, fees and terms for these types of loans vary by lender.
Various banks, credit unions and online lenders offer loans to those with weak credit, but the threshold for what’s considered a “creditworthy borrower” varies by institution. Some lenders have stricter requirements than others, which makes it important to shop around thoroughly when looking for a loan.
| Category |
Credit Score
|
Percentage of people in this category
|
Estimated APR
|
|---|---|---|---|
| Excellent |
800–850
|
21%
|
10.3%–12.5%
|
| Very good |
740–799
|
25%
|
10.3%–12.5%
|
| Good |
670–739
|
21%
|
13.5%–15.5%
|
| Fair |
580–669
|
17%
|
17.8%–19.9%
|
| Very poor |
300–579
|
16%
|
28.5%–32%
|
There are a few credit-scoring models that you can use to check your credit score, but the FICO credit scoring system is one of the most popular. FICO scores range from 300 to 850, with the scores on the lower end considered poor or fair.
According to FICO, a bad credit score is within the following ranges:
Having a poor or fair credit score can impact your ability to get approved for a loan and can even affect your ability to rent an apartment or purchase a home. If you do get approved for a loan with bad credit, you'll likely be charged the highest interest rates and higher fees. However, there are long-term habits that you can develop to improve your credit score, like paying your bills in full every month and regularly checking your credit report to catch errors.
Getting a personal loan with bad credit isn’t impossible, but it requires diligent research to find the most affordable loan possible. Here are a few steps to get a personal loan if you don’t have strong credit.
In today's financial climate, one of the most important things you can do to protect your financial health is to do your research before you apply for a personal loan, especially if you have bad credit. “I can’t stress enough the importance of educating yourself as a consumer and shopping around for the right financial product to assist you with your goals,” says Leslie Tayne, a debt resolution attorney. “A low credit score does mean you have limited options, but it doesn’t mean you don’t have many options. There are products that assist borrowers with low or bad credit.”
There are two main options when it comes to getting a personal loan if you have bad credit: secured and unsecured. But if you're having trouble qualifying for a traditional personal loan, you have other options.
Standard personal loans can be secured or unsecured. Secured loans require collateral, like a home or car. Generally, they offer more favorable rates and terms and higher loan limits, since you have greater incentive to pay back your loan in a timely manner. And if you have bad credit, it may be easier to get a secured loan than an unsecured one.
If you default on the loan, however, you risk losing your home, car or other collateral. The most common types of secured loans are mortgages, home equity loans and auto loans, although some lenders offer secured personal loans.
Unsecured loans don’t require any collateral, and the rate you receive is based on your creditworthiness — meaning they may be harder to qualify for if you have below-average credit. Since it’s not secured by an asset, this type of loan typically comes with a higher interest rate and lower loan limits, but you don't risk losing your assets if you fall behind on payments.
Pros: Personal loans tend to come with high loan limits, and you don't necessarily need any collateral to qualify.
Cons: If you opt for an unsecured personal loan, APRs may be far above what you're able to pay, and you may not qualify at all.
Takeaway: Secured loans and unsecured loans can both be useful tools to get the funds you need, but weigh the pros and cons of the different types to make sure you're not putting your assets at risk.
Payday loans are short-term loans, typically for $500 or less. They charge incredibly high fees in exchange for fast cash, and repayment is typically due by your next paycheck.
Pros: Payday loan lenders don’t run credit checks, so it's easier to get approved with them than with other lenders.
Cons: The overall cost of borrowing is high — sometimes up to 400 percent in interest — so it's important to weigh your other options first. Payday lenders can also be predatory in nature, so make sure to thoroughly research any potential companies you're looking into before signing up.
Takeaway: Payday loans have the potential to put you in more debt due to extremely high interest rates. They can also be predatory, so make sure to do your research before reaching out.
A cash advance is similar to a short-term loan and is offered by your credit card issuer. The sum you receive is disbursed in cash and is borrowed from the available balance on your credit card.
Pros: The fees and interest rates of a cash advance are typically lower than those of a payday loan.
Cons: If you have an unsecured credit card, your cash advance interest rate will likely be higher than your card’s standard purchase APR.
Takeaway: A cash advance can be a useful way to pay off any unexpected expenses but is not recommended for frequent use. Because there is no grace period, interest accrues immediately, which can put you in an unfavorable financial position.
Depending on your bank’s policy, it may approve you for a short-term loan or minimal overdraft agreement. This is, of course, dependent on your banking history and ability to keep your account open. For more information, contact your bank and ask about your options.
Pros: If you have a good relationship with your bank and need access to a small sum of cash, a bank agreement could be a good short-term solution.
Cons: Because these bank agreements are not official policies, they are not reliable ways to borrow money.
Takeaway: If you'd like to set up a bank agreement, the best way to find out your options is to contact your bank directly and ask about its policies.
Like personal loans, home equity loans disburse a lump sum of money upfront, which you pay back in fixed monthly installments. These loans use your home as collateral, meaning the lender has the right to seize your home in the event that you don't make payments. However, because this is a type of secured loan, interest rates may be lower than what you'd find in standard personal loans.
Pros: Because home equity loans are secured by your home, they may be easier to acquire for people with bad credit.
Cons: Since your home is collateral for the loan, if you fail to make the monthly payments on time, you run the risk of losing your home.
Takeaway: Home equity loans can be ideal for things that require a large sum of money upfront, like larger home improvement projects or debt consolidation.
HELOCs are similar to home equity loans in that they are based on your home equity and secured by your home itself. HELOCs, however, are functionally similar to credit cards in that they allow you to borrow only as much as you need, when you need it, then repay funds with a variable interest rate.
Pros: HELOCS allow you to take out how much you need, when you need it. So if you're planning smaller home improvement projects spread out over a period of time, a HELOC could be what you need to fund those projects.
Cons: As with a home equity loan, you use your home as collateral, which puts you at risk if you don't make the payments on time.
Takeaway: A HELOC is a valid loan option for people with bad credit, since you'll secure the loan with your home. It's also a good option if you don't need all of your funds upfront.
Due to the impacts of COVID-19, many banks and online lenders are adjusting their personal loan offerings. But while borrowers who already have personal loans may have the option to defer payments or waive fees, prospective borrowers may face bigger hurdles than usual.
According to Mark Hamrick, Bankrate's senior economic analyst, you may have limited borrowing options if you have poor credit, since lenders are looking to minimize their risk.
"Broadly speaking, borrowers with less positive credit scores may find more limited borrowing options because of the COVID-19 downturn," Hamrick says. "Those who might otherwise be qualified for loans during the best of times are among those who will find it more difficult to qualify during these more challenging times, economically speaking."
However, there is some good news: "Fortunately, low interest rates are helping to restrain borrowing costs for those who do qualify. One of our mantras is that it always pays to shop around for the best rates. Even if one lender isn’t willing to qualify a borrower for a certain product, there may well be another lender out there who will."
If you have less-than-stellar credit and are unsure if you'll get approved, try starting your loan search with the bank that holds your checking or savings account. You could also take advantage of prequalification options with lenders that already specialize in bad-credit loans.
Overview: As a loan aggregator, Bad Credit Loans refers applicants to reputable lenders that are willing to provide loans for those who have poor credit. The APR on personal loans from the Bad Credit Loans network of lenders and financial service providers ranges from 5.99 percent to 35.99 percent, with loan amounts from $500 to $5,000. Repayment terms vary from three to 36 months. Applying for a loan is free, though applicants must be at least 18 years old.
Perks: Bad Credit Loans does not charge you any fee for requesting a loan through its site. In addition, Bad Credit Loans says that it designs its application process to allow nearly anyone to qualify, even those who would not necessarily be approved elsewhere.
What to watch out for: Bad Credit Loans is not a lender itself. It connects consumers to lenders and other financial service providers, meaning you will need to carefully read through the terms, fees and all other requirements offered by each lender, as details will vary.
| Lender | Bad Credit Loans |
|---|---|
| Bankrate Rating | N/A |
| Min. Credit Score | Not specified |
| Est. APR | 5.99%–35.99% |
| Loan Amount | $500–$5,000 |
| Term Lengths | 3 to 36 months |
| Min. Annual Income | Not specified |
| Fees | Varies |
Overview: Upstart has developed a reputation for offering fast and fair personal loans. While many loan applications are based primarily on a borrower’s credit score and years of credit, Upstart applications also factor in an individual’s education, job history and area of study. APRs for Upstart loans vary by state and range from 4.66 percent to 35.99 percent. Loan amounts range from $1,000 to $50,000, and you can choose a repayment term of either three or five years.
Perks: Funds are provided quickly, as soon as the next day after approval, and there are no prepayment penalties.
What to watch out for: Upstart charges a one-time origination fee, which can be as high as 8 percent of the approved loan amount. Upstart also charges late payment fees and returned check fees.
| Lender | Upstart |
|---|---|
| Bankrate Rating | 4.5/5 |
| Min. Credit Score | 600 |
| Est. APR | 4.66%–35.99% |
| Loan Amount | $1,000–$50,000 |
| Term Lengths | 3 or 5 years |
| Min. Annual Income | Not specified |
| Fees | Origination fee of 0% to 8%, late fee of 5% or $15, returned check fee of $15 |
Overview: OneMain Financial offers both unsecured loans and secured loans, which require providing collateral, such as a motor vehicle. Loan amounts range from $1,500 to $20,000. APRs can be run anywhere from 18 percent to 35.99 percent, and term lengths are 24, 36, 48 or 60 months.
Perks: The application and funding process with OneMain is very quick — typically about one day from the start of the application to receipt of funds. The company also has over 1,500 branch offices for those who like to deal with a brick-and-mortar business.
What to watch out for: OneMain Financial charges origination fees that vary based on the state you live in. In some cases, it’s a flat amount, ranging from $25 to $400, while in others it may be a percentage of the loan. Percentage-based fees range from 1 percent to as much as 10 percent. OneMain also charges late payment fees that vary based on the state where you opened the loan. Typically, the fees range from $5 to $30 or 1.5 percent to 15 percent per late payment.
| Lender | OneMain Financial |
|---|---|
| Bankrate Rating | 3.9/5 |
| Min. Credit Score | Not specified |
| Est. APR | 18%–35.99% |
| Loan Amount | $1,500–$20,000 |
| Term Lengths | 24 to 60 months |
| Min. Annual Income | Not specified |
| Fees | Origination fee of $25 to $400 or 1% to 10%, late payment fee of $5 to $30 or 1.5% to 15%, nonsufficient funds fee of $10 to $50 |
Overview: The TD Bank Personal Secured Loan comes with a variable interest rate. The origination fee for this loan is $50, which is collected at closing and cannot be rolled into the loan. Borrowers can apply for loan amounts of $5,000 to $50,000, with terms ranging from 12 to 60 months.
Perks: This loan allows applicants to borrow against their savings, which TD Bank treats as collateral. There are no monthly fees, annual fees, prepayment fees, late fees or insufficient fund fees.
What to watch out for: Applicants must use a TD Bank savings account, money market savings account or CD as collateral for these loans, which can be limiting for potential applicants.
| Lender | TD Bank |
|---|---|
| Bankrate Rating | 4.2/5 |
| Min. Credit Score | Not specified |
| Est. APR | Starting at 5.67% |
| Loan Amount | $5,000–$50,000 |
| Term Lengths | 12 to 60 months |
| Min. Annual Income | Not specified |
| Fees | Origination fee of $50 |
Overview: Avant offers unsecured loans of between $2,000 and $35,000. Avant’s loans offer repayment terms of 24 to 60 months, and APRs range from 9.95 percent to 35.99 percent.
Perks: For those who qualify, the loan funds can be made available as soon as the next day after approval.
What to watch out for: Avant loans come with an administration fee of as much as 4.75 percent. There’s also a late fee if monthly payments are not made in full within 10 days after the due date, as well as an insufficient funds fee.
| Lender | Avant |
|---|---|
| Bankrate Rating | 4.5/5 |
| Min. Credit Score | 580 FICO, 550 Vantage |
| Est. APR | 9.95%–35.99% |
| Loan Amount | $2,000–$35,000 |
| Term Lengths | 24 to 60 months |
| Min. Annual Income | Not specified |
| Fees | Administration fee of up to 4.75%, late fee of $25, dishonored payment fee of $15 |
Overview: LendingPoint operates in 49 states and the District of Columbia and is known to offer loans for those with credit scores as low as 585. Loan amounts range from $2,000 to $25,000, and APRs start at 9.99 percent and go as high as 35.99 percent. The repayment terms offered by LendingPoint vary from 24 to 48 months.
Perks: LendingPoint provides application decisions in just a few seconds, and once the loan is approved, funds can be available as soon as the next day.
What to watch out for: Depending on your state, you may pay an origination fee with LendingPoint of as much as 6 percent, which is deducted from your loan proceeds. In addition, you must have a minimum annual income of $35,000 to qualify for a loan.
| Lender | LendingPoint |
|---|---|
| Bankrate Rating | 4.4/5 |
| Min. Credit Score | 585 |
| Est. APR | 9.99%–35.99% |
| Loan Amount | $2,000–$25,000 |
| Term Lengths | 24 to 48 months |
| Min. Annual Income | $35,000 |
| Fees | Origination fee of up to 6% |
Overview: Upgrade offers personal loans that can be used for debt consolidation, credit card refinancing, home improvements or major purchases. APRs available from Upgrade start at 7.99 percent and go as high as 35.97 percent. Loan amounts range from $1,000 to $35,000, and terms are 36 or 60 months.
Perks: When applying for an Upgrade loan, you’ll get a decision within just a few seconds, and the funds can be available within just one day of going through the provider’s verification process.
What to watch out for: All personal loans include a 2.9 percent to 8 percent origination fee, which is deducted from the loan proceeds.
| Lender | Upgrade |
|---|---|
| Bankrate Rating | 4.8/5 |
| Min. Credit Score | 620 |
| Est. APR | 7.99%–35.97% |
| Loan Amount | $1,000–$35,000 |
| Term Lengths | 36 or 60 months |
| Min. Annual Income | Not specified |
| Fees | Origination fee of 2.9% to 8%, late fee of $10, returned check fee of $10 |
Overview: If your credit score makes it difficult to get approved for a loan, LendingClub allows you to increase your chances of approval through a co-signer. Not every lender offers this option, and it can be a helpful way to qualify for a loan that you wouldn't otherwise have gotten. LendingClub also has a robust website that features an easy application process and an extensive loans resource center.
Perks: Along with the option of a co-signer, LendingClub offers a 15-day grace period if you're unable to pay the payment on the day it's due.
What to watch out for: There's an origination fee that ranges from 2 percent to 6 percent of the total loan cost.
| Lender | LendingClub |
|---|---|
| Bankrate Rating | 4.5/5 |
| Min. Credit Score | 600 |
| Est. APR | 10.68%–35.89% |
| Loan Amount | $1,000–$40,000 |
| Term Lengths | 36 or 60 months |
| Min. Annual Income | Not specified |
| Fees | Origination fee of 2% to 6%, late fee of 5% or $15 |
If you want more loan options with better terms, work on improving your credit. Although the process can take time, there are several things you can do to raise your credit score:
Every lender has its own specific requirements. Most personal loans are unsecured, meaning you don't have to put down collateral. However, borrowers with bad credit are less likely to qualify for these types of loans. If you fall in this group, you may want to search for a secured loan. If you’re considering a secured bad-credit loan, you’ll need to provide a form of collateral.
You can get a small loan with bad credit, but you'll have to ensure that you're not applying for a predatory loan. Many smaller loans under $1,000 come from payday lenders, which charge astronomically high interest rates. If you're looking for a relatively small loan, it's best to shop around with more reputable lenders first. Most lenders set their lowest loan amount around $1,000, but you may have more luck finding a loan for a few hundred dollars with your local bank.
Employment is one of many factors that lenders consider when you apply for a personal loan. It's still possible to get a personal loan if you're unemployed, but you'll likely have to compensate with a high credit score and proof of a regular source of income. This can include Social Security benefits, child support, investments, disability income and more. If you have poor credit and you're unemployed, it will be harder to convince lenders to extend you a loan.
As a borrower, you take on some risk whenever you accept a personal loan. If you default on a secured personal loan, for instance, the lender could take your collateral, and your credit score could take an even bigger hit. With any type of loan, you also risk racking up even more debt if you don’t pay bills on time.
With bad-credit loans, specifically, much of the risk comes from predatory lenders. Payday lenders and scammers are more likely to target people who have trouble qualifying for loans elsewhere; it's important to vet any company with bad-credit loans that may seem too good to be true.
There are no-credit-check loan companies, but if you're considering this route, proceed with caution. Companies that don't check credit often compensate by charging an exorbitant amount in interest, sometimes upward of 400 percent. Because of this, it's best to start your search with traditional banks or reputable online lenders, some of which extend loans to people with credit scores below 600. If you do choose to borrow from a no-credit-check lender, keep an eye out for any potential loan scams.
It is possible to get a loan without a checking account, but your options are likely limited. Generally, without a checking account, you'll have to either put up collateral or turn to payday lenders, which can be predatory and charge extremely high interest.
If you have bad credit, it's likely easiest to get a loan from a payday lender or other no-credit-check lender. However, just because that's the easiest option doesn't mean it's the best. The convenience of these types of loans often comes at the cost of high APRs, short repayment periods or even loan scams.
To get a loan with bad credit, we recommend starting with the lenders we review above. Many of these have prequalification options, allowing you to see your eligibility and rates so you can easily compare lenders. While not every lender will accept borrowers with poor credit, many do.
It can be difficult to get approved for a personal loan with a credit score of 550, especially if the loan is unsecured. If you get approved for the loan, there is a good chance that the loan will have a high APR and lots of fees.
If you are unsure if you'll qualify due to your credit score, you may have a better chance with the help of a co-signer who has good credit. However, while the job of a co-signer isn't to make the monthly payments for you, co-signers do hold some responsibility if you fail to pay and could see their own credit score impacted.
From application to disbursement, it could take anywhere from a few days to a few weeks to get your loan, depending on the lender. Typically an online lender's process is the quickest. If you apply with a bank or credit union, the approval process may take longer.
To expedite the process, gather the information you'll need to apply for the loan. This might include your Social Security number, employment information, income information and financial history. Being prepared when you apply allows the process to advance more quickly.
When you apply for a personal loan, the lender will run a hard credit inquiry to assess your creditworthiness. Because of this, you'll likely see your credit score decrease a few points.
That said, the long-term credit benefits that come with a personal loan can outweigh the few points that may get temporarily knocked off your credit score. You can also prequalify for many loans before officially submitting an application; this allows you to see whether or not you qualify with a lender without activating a hard credit check.
While shopping for a personal loan, look out for red flags that may be a sign that you’re walking into a scam: