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Best personal loans for bad credit in June 2024

Jun 20, 2024

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PERSONAL LOANS

Upstart: Bankrate 2024 Awards Winner for Best Bad Credit Loan

4.8

Est. APR
7.80- 35.99%
Loan term
3-5 yrs
Loan amount
$1k- $50K
Min credit score
300
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Check rate with Bankrate

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
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PERSONAL LOANS

Upgrade: Best for quick small loans

4.7

Est. APR
8.49- 35.99%
with AutoPay
Loan term
2-7 yrs
Loan amount
$1k- $50K
Min credit score
600
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PERSONAL LOANS

BEST EGG: BEST FOR SECURED LOAN OPTIONS

4.6

Est. APR
8.99- 35.99%
Loan term
3-5 yrs
Loan amount
$2k- $50K
Min credit score
600
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Check rate with Bankrate

PERSONAL LOANS

Avant: Best for short repayment options

4.7

Est. APR
9.95- 35.99%
Loan term
2-5 yrs
Loan amount
$2k- $35K
Min credit score
580

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
$2k- $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 and make sure you can get a loan that is within your budget. 

LENDER BEST FOR EST. APR LOAN AMOUNT LOAN TERM MIN. CREDIT SCORE
Upstart Limited credit history 7.80%-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 8.49%-35.99% $1,000-$50,000 2 - 7 years 600
Best Egg Unique secured loan options 8.99%-35.99% $2,000-$50,000 3 - 5 years 600
Avant Shortest repayment term options 9.95%-35.99% $2,000-$35,000 2 - 5 years 580
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 lenders

In the following section we take a deep dive into lender details. We cover why each pick stands out against other bad credit lenders, how they compare to industry averages and — when available — unique proprietary data showing you how Bankrate users are using each lender’s products.

Upstart: Bankrate 2024 awards winner for best bad credit loans

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 across the board. The biggest reason it tops the best list is that Upstart factors in much more than just credit score when making approval decisions, including job history and educational background, which makes it possible for people with bad or no credit history to get approved.

Est. APR
7.80%–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. 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 — one of the lowest available among personal loan lenders. And it's one of the two lenders out of all of the best bad credit loans that offers loans as small as $1,000. 

Est. APR
8.49%–35.99%
Loan amount
$1k– $50k
Min credit score
600

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 and has gained a trusted reputation with a 95 percent customer satisfaction rating. Its loans have similar rates, amounts and terms as other bad credit lenders, but it offers direct payment to creditors when consolidating debt.

Est. APR
8.99%–35.99%
Loan amount
$2k– $50k
Min credit score
600

Avant: Best for short repayment options

Avant
Rating: 4.7 stars out of 5
4.7

Overview: Headquartered in Chicago, Avant has been around and offering solutions to potential borrowers with less-than-perfect credit for over 10 years. Against the wider loans 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
580

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 has been in business for 20 years. 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
$2k– $37k
Min credit score
600

What are bad credit loans and how do they work? 

A bad credit loan is typically designed for borrowers whose credit scores fall between 300 and 579. Lenders consider it riskier to lend to borrowers with bad credit because there may be a higher chance they won’t be able to repay the loan. 

Like traditional personal loans, bad credit loan funds can be used for a variety of different needs. Consumers often choose a bad credit debt consolidation loan to pay off a pile of high-interest-rate credit cards. Or you may need a bad credit emergency loan to fund something urgent like a car repair or medical expense. 

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

Compare rates by prequalifying with at least three lenders. Review their upfront and any ongoing fees. Origination fees are usually deducted from your funds when the loan is completed. Once you find a lender that fits your needs, submit an application. Decisions are typically made within a matter of minutes, and funds may be available within one business day, depending on the lender.

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Bankrate insight

Some lenders may set a higher bar for what they consider “bad credit,” so check the lender’s minimum requirement before you apply. 

Average personal loan rates by credit score

As of June 20, the average personal loan interest rate is 12.35 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 score Average loan interest rate
720–850 10.73%-12.50%
690–719 13.50%-15.50%
630–689 17.80%-19.90%
300–629 28.50%-32.00%
Lenders tend to shy away from lending to bad credit borrowers when rates change rapidly. If they do lend, rates tend to be much higher and they may receive lower loan amount offers. When rates drop, bad credit borrowers may not see as much benefit, as lenders focus more on good credit borrowers.

DENNY CEIZYK | BANKRATE SENIOR LOANS WRITER

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. 

Pros and cons of bad credit personal loans 

A bad credit personal loan can give you access to quick cash in an emergency, give you relief from high-interest rate credit cards or help you pay for a large car or home repair. But there are disadvantages that also must be considered before making a decision. Fully weigh the pros and cons of a bad credit personal loan before taking one out.

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Pros

  • You could save hundreds of dollars in interest compared to credit cards.
  • Can help boost your credit score with on-time payments.
  • Funds may be available within one business day.
  • No collateral is needed so your car or home isn’t at risk.
  • Easier to qualify for than home equity loans.
Red circle with an X inside

Cons

  • Origination fees of up to 12 percent of the loan amount.
  • Funds are received at once so you can’t reuse credit as it’s paid off.
  • May not qualify if you don’t have a steady income.
  • Higher interest rates and costs than home equity loans.
  • Shorter maximum terms than home equity loans or cash-out refinances.

How to compare personal loans with low credit 

A bad credit loan isn't a one-size-fits-all product. Consider these steps to choose the best bad credit loan for your needs. Cash advance loans, secured loans and unsecured loans are the primary bad credit loans available. 

Before selecting an option, know how to effectively compare each option by taking the steps below.

  1. Calculate a monthly payment you can afford: Review your budget and decide on a monthly amount that fits your spending habits. Use a loan calculator to help you figure out the loan amount, repayment term and interest rate you can afford. 
  2. Determine what loan terms best fit your needs: Try longer terms for a lower payment and shorter ones for a quicker payoff. Don’t borrow more than you need to keep your loan amount as low as possible. 
  3. Prequalify with three or more lenders: To find the best deal available, prequalify with at least three different lenders. Prequalifying allows you to compare real offers side-by-side without affecting your credit.
  4. Look at customer experience and reviews: Consider a lender’s customer service options before applying, especially if you prefer in-person service. 
  5. Identify unique features and useful perks: Lenders sometimes offer perks like introductory APRs and online financial tools and apps, especially if you're already a member of the institution.

How to get a personal loan with low 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 score a personal loan with bad credit

Where to get a personal loan with low credit

Bad credit loans are offered by credit unions, community banks and online lenders. Always compare at least three different offers to make sure you’re getting the best loan terms for your situation.

In general, online lenders offer the most competitive terms for low or bad credit. They may work with investors willing to take bigger risks on low credit score borrowers than banks and credit unions. 

As a general rule of thumb, banks and credit unions don’t cater as much to bad credit borrowers. However, some banks may participate in no-credit-check small loan programs. The guidelines and requirements vary depending on where you live. Credit unions may also offer payday alternative loans.

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Bankrate insight

Although you can take out multiple bad credit loans, it’s best to avoid doing so, as it can result in a cycle of debt that's difficult to break out of. 

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.

Expert advice for low credit loans

Know how to spot a scam before you start sending out applications. A bad credit scam could cost you hundreds or even thousands of dollars, so it's worth the time to research each lender thoroughly.

Tips on how to qualify for a loan with a low credit score

If you've looked at different lenders and don't meet most of the minimum eligibility requirements, you can take a few steps you can take to help increase your approval odds.

  • Look into secured options: Some bad credit lenders offer secured personal loan options. Most of the balances are backed by a deposit or your vehicle. The eligibility requirements are often less stringent than unsecured loans since you’re putting up an asset as collateral..  
  • Add a co-applicant: Not all lenders allow for co-applicants, but if you're having a hard time getting approved, look for ones that do. Adding a creditworthy co-applicant can help you get approved, even if you don't meet the financial criteria originally. 
  • Include all streams of income: Report all your income streams, including side gigs or passion projects that earn revenue. The larger your income, the larger your approval odds could be. 
  • Only ask for what you need or lower your requested loan amount: Borrowing only what you need is a good general practice to avoid paying interest on money you don't need. Lower your minimum loan amount if you can. A lender may be more willing to approve you for a smaller amount, especially if you have low credit. 

How to spot bad credit loan scams

Avoid potential scams while shopping for a personal loan by being aware of these eight red flags.

  1. The lender guarantees approval: If you come across a lender that isn’t interested in your payment history before assuring you that you'll be approved, you might be lured into a predatory lending product.
  2. The lender charges upfront fees: Most lenders don't bury hidden fees within the terms and agreements or charge immediate fees. Reputable lenders will include the fees within your monthly payments — or in some cases, deduct them from the amount funded — and will clearly lay out all of the expenses you're responsible for. 
  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, typically over email, phone calls and door-to-door solicitation, are not legitimate advertising practices for trustworthy lenders.
  5. The lender doesn't have clear contact information: If it's difficult to find the contact information or if you can't easily get in contact with the customer service department, that could be a red flag. 
  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, keep an eye on your accounts and report the scam to the FTC.

Is fast funding safe?

Many online lenders offer fast funding timelines — some offer same-day funding and others offer financing as soon as one business day after approval. 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. 

Fast funding is only unreliable 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, you may be involved in a scam and should direct your attention elsewhere.

Our experts weigh in on how you can replace your bad credit loan down the road to get a balance with more favorable terms.

Bad credit loans can be risky if they aren’t part of a financial plan to improve your future credit. Our experts weigh in on ways you can replace a bad credit loan with one at more favorable terms down the road. 

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 Loans Writer

"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 it costs you $1,000, it will take you 20 months to recoup the refinance costs. If you plan to keep the loan for more than 20 months, then refinancing makes sense. 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."

Frequently asked questions

How we chose our best bad credit loan lenders

Bankrate's trusted personal loans industry expertise

57

years in business

30

lenders reviewed

20

loan features weighed

665

data points collected

To select the best personal loans, Bankrate’s team of experts evaluated over 30 lenders. Each lender was ranked using a meticulous 20-point system, focusing on four main categories: