Best bad credit loans in November 2023

Best Egg stands out among the rest for its consolidation perks. The lender offers direct payment to creditors, streamlining the process of debt consolidation, making it easier and less stressful for borrowers.

A bad credit loan from Best Egg is best for those with a lower credit score with significant high-interest debt.

OneMain is best for borrowers who have a thin credit file or low credit score, have a steady flow of income and can make the required monthly loan payments, both now and in the future.

Before beginning the process of applying for a personal loan, make sure you're familiar with your credit report and have a firm grasp as to why your credit score is the number it is. Most lenders use the FICO scoring model and base eligibility on your FICO score in tandem with your overall financial health. 

Even though your loan options will be less than if you had a good-to-excellent credit score, community banks, credit unions and online lenders tend to be more lenient when it comes to their credit score requirements. Comparing at least three lenders from either of these options can make a world of difference to help you secure the best rate, even with less-than-stellar credit.

As you shop around and compare lenders, make sure you aren't applying for a loan you can't afford. Use a loan calculator or prequalify to get a realistic idea of what you can reasonably fit into both your long-and short-term budget.

Finally, don’t limit your options to just unsecured loans. Although less common, secured personal loans are generally easier to get approved for, since they require collateral. This makes them less risky for lenders, plus you could secure a more competitive rate.

A co-signer is a trusted, creditworthy family member or friend who signs the loan agreement with you to help increase your approval odds or chances of scoring a lower rate. While this is helpful, it also means that the co-signer's credit will take a hit if you miss a payment and they'll be responsible for paying back the delinquent balance. 

When you apply for a bad credit loan, the lender will ask you to provide multiple financial and personal documents, like your Social Security number, a valid U.S. driver's license or proof of legal residence and bank statements or asset information. Before diving into the application, make sure you have the necessary documentation on hand to ensure a smooth and easy process. 

A hard credit check — also called a hard pull or a hard credit inquiry— is initiated by the lender when you apply for a loan. This will result in a short-term knock to your credit score of up to 10 points — in some cases — so make sure you don't undergo multiple hard checks in a short period of time to protect your score. 

• These are offered by online marketplaces, as well as online banks and credit unions
• More flexible credit requirements
• Often offer same-day approval and quick funding (sometimes within hours of approval)
• Prequalification is usually available
• You could compare multiple lenders with a single application if you submit it through an online marketplace
• Some may offer additional rate discounts and perks
• Most charge origination fees, in addition to late payment fees and returned check fees
• Best for: Borrowers with credit scores in the low 600s or under, who may benefit from applying with a lender that considers other criteria, such as employment and education history and borrowers who need quick funding

• These include banks, as well as local and federal credit unions
• More stringent credit requirements
• Same-day approval is typically available but funding may take a few days – especially if you don’t have an account with the institution
• Prequalification is not always an option
• You typically have to fill out individual applications for each institution you wish to compare rates from
• Most offer additional rate discounts and perks to existing members
• In-person lender tend to charge fewer fees, limiting these to late payment fees or returned check fees
• Best for: Borrowers with credit scores in the mid 650s and borrowers that have an existing relationship with the institution and can take advantage of available discounts and perks

You may be able to avoid going into more debt by getting a payment plan with the retailer or service provider you're working with. A conversation and some planning may be all you need to avoid a bad credit loan.

A credit card is likely not the ideal solution, but if you can qualify for one, it may be a viable option. And if you can pay down most of your balance, you may not be charged as much interest as some bad credit lenders. Just be careful not to get into a cycle of spending more than you can afford to pay off in a month or two.

When it comes to unexpected bills or expenses – especially medical bills – it could be worth seeing if there's an interest-free or low-interest payment plan offered. Not only will this make paying down the expense more manageable, but you could also save thousands in interest accrual. 

It's not an easy option, but you may be able to get support from those around you. To keep your relationship healthy, work with your loved one to create a plan to pay back the amount and stick to it.

Scammers are getting more and more crafty each day, so it's important to know what to do should you find yourself in a bad situation. With scammers getting more and more crafty, it's important to know what to do should you find yourself in a bad situation. If you suspect you've been scammed by a lender, the first thing you should do is contact your credit card servicer or company and report the charge as fraudulent. 

If they approve the request, you'll get your money back and it will be deposited to your account on the servicer's timeline. If you gave the scammer any personal information, go to IdentityTheft.gov and follow the steps on how to monitor your finances and credit for further illegal activity. 

It's also wise to change your credit card and online banking passwords, just to be safe. Create a strong, new password that you'll remember and if you use the same password for anything else, make sure to change it there as well. 

As a last step, make sure to report the scam to the FTC. This will help the FTC build cases against scammers and can help prevent similar fraudulent activity from happening in the future. 

Many lenders offer fast funding timelines; some offer same-day funding and others offer funding as soon as one business day after getting approved. At times this can sound too good to be true, but for legitimate lenders and financial institutions, it's a common offering that many borrowers take advantage of. 

The only time fast funding is unreliable is when the loan or lender itself is unreliable. If the lender matches any of the potential red flags listed above along with same-day funding, then you may be getting yourself involved in a scam and should direct your attention elsewhere.

The interest rate you get will depend on the lender, your credit history and financial situation. However, since most bad credit loans have rates on the higher side, you can expect interest rates that fall between 18 percent and 36 percent.

Typically, it’s easier to get a personal loan from an online lender than an in-person one, regardless of your credit score, for a couple of reasons. First, online lenders tend to offer quicker turnaround times than in-person lenders, with some offering same-day approval and funding. 

Online lenders are usually more flexible with their credit requirements than brick-and-mortar banks and credit unions, which can definitely work to your advantage if you don’t have good or excellent credit, as you could still secure a good rate — even if it isn’t the lowest one advertised. 

Lastly, many online lenders offer additional perks, such as rate discounts for signing up for automatic payments and flexible due dates, which traditional lenders tend to shy away from.