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Best bad credit loans in December 2022

As of December 06, 2022
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Bankrate assesses the top personal loans for bad credit, considering interest rates, terms and features offered by each lender. We also outline different types of bad credit loans, how to spot loan scams and other important information about bad credit loans.
 
Bad credit loans are personal loans from lenders that work with bad credit borrowers. These can be secured (backed by collateral) or unsecured loans. 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 poor 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 for the best option.
 
While your credit score will keep you from getting a great APR (annual percentage rate), you can still find interest rates that are much lower than with options like credit cards or payday loans. Our recommendations for the best bad credit personal loans have flexible eligibility requirements and relatively low rates for the credit band.
 
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Answer a few questions in two minutes or less to see which personal loans you pre-qualify for. It's free and will not impact your credit score.

4.8

Bankrate Score
APR from

7.96- 35.97%

with AutoPay
Loan Amount

$1k- $50k

Term: 2-7 yr
Min. Credit

560

Check rate with Bankrate

4.6

Bankrate Score
APR from

8.99- 35.99%

Loan Amount

$2k- $50k

Term: 3-5 yr
Min. Credit

600

Check rate with Bankrate

4.6

Bankrate Score
APR from

8.99- 24.99%

Loan Amount

$5k- $40k

Term: 2-5 yr
Min. Credit

600

Check rate with Bankrate

4.3

Bankrate Score
APR from

8.30- 36.00%

Loan Amount

$1k- $40k

Term: 3-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.5

Bankrate Score
APR from

9.95- 35.95%

Loan Amount

$2k- $35k

Term: 1-5 yr
Min. Credit

580

Check rate with Bankrate

3.8

Bankrate Score
APR from

18.00- 35.99%

Loan Amount

$1.5k- $20k

Term: 2-5 yr
Min. Credit

None

Check rate with Bankrate
APR from

Loan Amount

$1- $500k

Min. Credit

Not disclosed

4.3

Bankrate Score
APR from

34.00- 155.00%

Loan Amount

$1k- $10k

Term: 0.5-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

The Bankrate guide to choosing the best personal loan for bad credit

To help you choose the right loan for you, our editorial team has gathered the most important information you need to shop for lenders and make your decision. Bankrate gathered data on loans for individuals with bad credit by comparing lenders and their rates as well as information on how someone with poor credit can get the best possible loan.
 
The lenders listed here are selected based on factors such as credit requirements, APRs, loan amounts and fees. Bankrate evaluated lenders and options for individuals with bad credit to help people find the best lender and rates for their situation.

What is a bad credit personal loan?

When you apply for a loan, lenders will look at your credit score and credit history to determine how much of a risk it is to them to lend you money. Bad — or low — credit is a score that falls between 300 and 579 and is caused by factors like thin credit history, multiple late payments and maxed-out credit cards. 

If you have bad credit, it can be difficult to get approved for a loan. You'll likely need to turn to lenders that offer loans for bad credit. These loans are either secured (backed by collateral like a home or car) or unsecured and often come with higher interest rates than other personal loans. 

Before signing on the dotted line, be completely sure you need a bad credit loan, as the higher rates and potentially unfavorable terms could put you in more debt down the road.  

How to get a loan with bad credit 

If you decide that a bad credit loan is your best financing option, the approval process will depend on the lender. However, you can do things that may increase your chances of getting approved as you compare bad credit loan lenders. 

After calculating how much you'll need to borrow, use the list of lenders below as a springboard for comparing your options. Many lenders offer a prequalification tool that lets you see your eligibility odds and the predicted rate at no impact on your credit, so prequalify for as many lenders as possible to make sure you're eligible and are getting the most competitive offer for your credit situation.

Compare bad credit loan rates in December 2022

LENDER BEST FOR MIN. CREDIT SCORE EST. APR MIN LOAN AMOUNT MAX. LOAN AMOUNT
Upstart Limited credit history No minimum credit score requirement 5.60%-35.99% $1,000 $50,000
OneMain Financial Secured loans Not specified 18.00%-35.99% $1,500 $20,000
TD Bank Low rate caps 700+ 6.99%-21.99% $2,000 $50,000
Avant A range of repayment options Not specified 9.95%-35.95% $2,000 $35,000
LendingPoint Small loans 600 7.99%-35.99% $2,000 $36,500
Upgrade Fast funding 560 7.96%-35.97% (with autopay) $1,000 $50,000
LendingClub Online experience Not specified 8.30%-36.00% $1,000 $40,000

Best loan for limited credit history

Min. credit score:
Not disclosed
Fixed APR From:
6.5% –35.99%
Loan amount:
$1,000– $50,000
Term lengths:
3 to 5 years
Min. annual income:
$12,000

Overview: Upstart developed a reputation for offering fast and fair unsecured personal loans. APRs for Upstart loans vary by state and range from 5.60 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.

Why Upstart is the best for limited credit history: 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.

Best secured loan

Min. credit score:
None
Fixed APR From:
18% –35.99%
Loan amount:
$1,500– $20,000
Term lengths:
2 to 5 years
Min. annual income:
$7,200

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 run anywhere from 18.00 percent to 35.99 percent, and term lengths are 24, 36, 48 or 60 months.

Why OneMain Financial is the best for a secured loan: Many lenders only offer unsecured loans. Borrowers who can’t get approved elsewhere may have a better chance of getting a secured loan with OneMain Financial.

Best loan for low rate caps

Min. credit score:
Not disclosed
Fixed APR From:
6.99% –21.99%
Loan amount:
$2,000– $50,000
Term lengths:
1 to 5 years
Min. annual income:
$0

Overview: TD Bank's TD Fit unsecured personal loan offers borrowers anywhere from $2,000 to $50,000 and comes with few fees. Its loans are also funded in as little as one business day.

Why TD Bank is the best for low rate caps: While TD Bank doesn't offer the absolute lowest rates, the cap on its personal loan rates is relatively low at 18.99 percent APR. This could make it particularly appealing for borrowers with poor credit who might otherwise be subject to rates above 30 percent.

Best loan for a range of repayment options

Min. credit score:
580
Fixed APR From:
9.95% –35.95%
Loan amount:
$2,000– $35,000
Term lengths:
1 to 5 years
Min. annual income:
$14,400

Overview: Avant offers unsecured loans of between $2,000 and $35,000 with APRs from 9.95 percent to 35.95 percent.

Why Avant is best for a range of repayment options: Avant’s loans offer repayment terms of 12 to 60 months, and with no prepayment penalty, borrowers can save money on interest by paying their loans off early.

Best for small loans

Min. credit score:
600
Fixed APR From:
7.99% –35.99%
Loan amount:
$2,000– $36,500
Term lengths:
2 to 6 years
Min. annual income:
$30,000

Overview: LendingPoint operates in 48 states and Washington, D.C., and is known to offer unsecured loans for those with credit scores as low as 600. Loan amounts range from $2,000 to $36,500, and APRs start at 7.99 percent and go as high as 35.99 percent. The repayment terms offered by LendingPoint vary from 24 to 60 months.

Why LendingPoint is the best for small loans: Some lenders with tighter credit requirements have a $5,000 minimum for personal loans, but LendingPoint lets bad credit borrowers take out as little as $2,000.

Best loan for fast funding

Min. credit score:
560
Fixed APR From:
7.96% –35.97%
Loan amount:
$1,000– $50,000
Term lengths:
2 to 7 years
Min. annual income:
$30,000

Overview: Upgrade offers unsecured personal loans that can be used for debt consolidation, credit card refinancing, home improvements or major purchases. APRs available from Upgrade start at 7.96 percent and go as high as 35.97 percent. Loan amounts range from $1,000 to $50,000, and terms are 24 to 84 months.

Why Upgrade is the best for fast funding: Loan funds can be available within just one business day of going through the provider’s verification process.

Best loan for online experience

Min. credit score:
Not disclosed
Fixed APR From:
8.3% –36%
Loan amount:
$1,000– $40,000
Term lengths:
3 to 5 years
Min. annual income:
$0

Overview: If your credit score makes it difficult to get approved for a loan, LendingClub allows you to increase your chances of approval by having a co-borrower. Not every lender offers this option, and it can be a helpful way to qualify for a loan that you wouldn't have gotten otherwise.

Why LendingClub is the best for an online experience: LendingClub has a robust website that features an easy application process and an extensive loans resource center.

What to know about your credit score and securing a loan

When lenders give you money, they need you to pay back the money so they make money instead of losing it. Lenders tend to view people with less optimal credit riskier, so people with lower credit tend to see higher APRs. Here's a rundown of the estimated APR you could receive based on your credit score.

Estimated APR by FICO score range

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%

What is considered a bad credit score?

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:
 
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 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.

What makes up a bad credit score?

FICO calculates your credit score using five pieces of information:

If your finances fall short in one or more of these areas, your score will drop. For instance, having a history of late payments will have a huge impact on your score, since payment history contributes the most to your score. Things like bankruptcies, foreclosures and high amounts of debt relative to your income could also result in a bad credit score.

Where can I get a personal loan with bad credit?

When searching for a personal loan with low or bad credit, it is important to consider all of your options before committing to a lender. While bad credit can lead to limitations in the borrowing process, there are still ways to find lenders willing to work with you. Borrowers with bad credit can apply for both online personal loans and loans from direct lenders.

Online personal loans for bad credit

Applying to online lenders can be a good option for borrowers with bad credit, especially if you submit an application through an online lending network. These online networks often allow you to submit a single initial application and then compare offers from responding lenders. Online lending networks make it easier to find the lenders willing to work with you and decide which one will work best for you. 

Direct lenders also can offer online personal loans. In this case, you would go directly to a lender you would like to work with that offers online options to apply. In this case, you will want to research beforehand to find lenders that offer bad credit loans.

In-person lenders for bad credit personal loans

If you prefer to get started in person, applying directly with individual lenders is a good option. You can look for local banks and credit unions, especially ones you may already have a working relationship with. As always, when applying directly to specific lenders, it is important to figure out which lenders are willing to work with borrowers who have bad credit. Our list of lenders may help you find one offering in-person services.

Types of bad credit loans and their uses

There are two main options for getting a personal loan if you have bad credit: secured and unsecured, but there are many other varieties:
 

How to spot bad credit loan scams

While shopping for a personal loan, look out for red flags that may be a sign you’re walking into a scam:

  • Guarantees without approval: Reputable lenders generally want to see your credit report, income and other information before extending an offer. If you come across a lender that isn’t interested in your payment history, you might be getting lured into a bad situation.
  • No registration in your state: The Federal Trade Commission requires that lenders be registered in the state where they do business. Research whether the business is licensed in your state.
  • Poor advertising methods: Phone calls and door-to-door solicitation are not considered legitimate advertising practices for trustworthy lenders. Similarly, loan offers that pressure you into taking action immediately are designed to get you to accept without due consideration.
  • Prepayment: While application, origination or appraisal fees are common loan charges, these charges are often deducted from the total amount of your loan. If a lender requires you to provide cash or a prepaid debit card upfront, it's not legitimate.
  • Unsecured website: 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.
  • No physical address: A reputable lender should have a physical address listed on its website.

Frequently asked questions

Methodology

To select the top bad credit personal loan lenders, Bankrate considers 15 primary factors, with extra weight given to flexibility of eligibility criteria. Since bad credit personal loans can be tied up with extremely high fees, we also give more weight to the APR ranges offered and fees.
 
Overall, Bankrate reviewed 33 lenders and pulled the top eight. Each of the eight have a Bankrate rating that is broken down into three buckets: availability, affordability and customer experience. The categories are scored based on several data points adding up to a potential total of 300 points.
 
  • Availability: Eligibility requirements, online application availability and turnaround time are considered under this category.
  • Affordability: This encapsulates the fees, penalties and minimum and maximum interest rates charged by the lender.
  • Customer experience: This covers customer service hours, online access and mobile apps.
Consider both the Bankrate ratings and the best-for category for each lender when evaluating which might best fit your needs.