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Best bad credit loans in December 2023

Dec 01, 2023


Find out if you prequalify for personalized loan offers in 2 minutes or less—with no impact to your credit

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Personal loans

Best loan for limited credit history

Est. APR
Loan amount
$1k– $50k
Term: 3-5 yrs
Min credit score
Not specified
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Personal loans

Best loan for fast funding

Est. APR
with AutoPay
Loan amount
$1k– $50k
Term: 2-7 yrs
Min credit score
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Personal loans

Best for debt consolidation

Est. APR
Loan amount
$2k– $50k
Term: 3-5 yrs
Min credit score
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Personal loans

Best secured loan

Est. APR
Loan amount
$1.5k– $20k
Term: 2-5 yrs
Min credit score
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Personal loans

Best loan for a range of repayment options

Est. APR
Loan amount
$2k– $35k
Term: 1-5 yrs
Min credit score
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Personal loans

Best loan for small loans

Lending Point
Est. APR
Loan amount
$2k– $37k
Term: 2-6 yrs
Min credit score
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How to compare bad credit loans

A bad credit loan isn't a one-size-fits-all product. Consider the steps below to choose the best bad credit loan for your needs. Cash advance loans, secured loans, unsecured loans and payday loans are the four main types of bad credit loans available. Know what each offers before selecting one.

  1. Determine what loan terms best fit your needs. Use a loan calculator to help you figure out the loan amount, repayment term and interest rate you can afford.
  2. Prequalify with three or more lenders. To find the best deal available, prequalify with at least three different lenders. Prequalifying will allow you to compare real offers side-by-side without affecting your credit.
  3. Look at customer experience and reviews. Look into a lender’s customer service options before applying, especially if you prefer in-person service. 
  4. 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.

Compare bad credit loan rates from Bankrate’s top picks

Upstart Limited credit history 6.40%-35.99% $1,000-$50,000 3 - 5 years No requirement
Upgrade Fast funding 8.49%-35.99% $1,000-$50,000 2 - 7 years 600
Best Egg Debt consolidation 8.99%-35.99% $2,000-$50,000 3 - 5 years 600
OneMain Financial Secured loans 18.00%-35.99% $1,500-$20,000 2 - 5 years Not specified
Avant A range of repayment options 9.95%-35.99% $2,000-$35,000 1 - 5 years 550
LendingPoint Small loans 7.99%-35.99% $2,000-$36,500 2 - 6 years 600

How we choose our best bad credit loan lenders

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:

  • Checkmark
    The interest rates, penalties and fees are measured in this section of the score. Lower rates and fees and fewer potential penalties result in a higher score. We also give bonus points to lenders offering rate discounts, grace periods and that allow borrowers to change their due date. 
  • Checkmark
    Minimum loan amounts, number of repayment terms, eligibility requirements, ability to apply using a co-borrower or co-signer and loan turnaround time are considered in this category.
  • Checkmark
    Customer experience
    This category covers customer service hours, if online applications are available, online account access and mobile apps.
  • Checkmark
    For this factor, we consider how well information is presented to the borrower on the lender’s website. This includes listing credit requirements, rates and fees, in addition to offering prequalification.
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years in business
Credit Card Search
lenders reviewed
loan features weighed
data points collected

Take bad credit loan fees into account before applying

When comparing lenders, make sure to look at the following fees to ensure you get the most affordable loan.

  • Origination fee. Origination fees can be anywhere from 1 to 10 percent of the total loan balance. It is generally taken out of your total loan amount, but some lenders may let you pay off the fee in one lump sum. 
  • Late payment fees. Late payment fees vary by lender and are likely higher for those with lower credit. However, most of the time you'll be charged a one-time flat fee between $15 and $25, or five percent of the late payment amount.
  • Prepayment penalty. Some lenders charge a fee for paying off your loan ahead of time. Although these are a rarity amongst most personal loan lenders, those that offer loans for bad credit may still tack on this extra fee.

Interest rates are also much higher when it comes to bad credit loans. For example, the average personal loan interest rate comes out to just above 11 percent, while bad credit loans have average rates ranging from about 18 percent to 32 percent or more. While this may not seem like a huge jump, here's what this difference could cost you if you were to take out a $5,000 loan with a five year repayment period.

Interest rate Monthly cost Interest accrued Total cost
11% $108.71 $1,522.73 $6,522.73
20% $132.47 $2,948.17 $7,948.17

Even if the monthly payment seems manageable, it's important to think about the long-term implications that interest accrual could have on your financial goals and well-being. If you're offered a higher rate from multiple lenders, it may be best to explore alternative borrowing options or work on your score before accepting the loan.

What to know about bad credit loans

When you apply for a loan, lenders will look at your credit score and credit history to determine how risky it could be to lend you money. A bad credit loan is one that’s designed for borrowers whose credit scores fall between 300 and 579

Getting loans with bad credit can be a tall order, but it’s not impossible. You'll likely need to do some digging to find lenders that offer loans specifically for individuals within that credit profile. That said, these loans tend to come with higher interest rates and fees than other personal loans, as you’ll be seen as a riskier borrower to lenders.

Types of bad credit loans

Besides personal loans, there are other types of loans that fall under the bad credit loan umbrella. Each of these serves a different purpose and caters to a specific financial need. 

Pros and cons of bad credit loans 

Just like any other lending product, bad credit loans come with advantages and disadvantages that must be considered before making a decision.

Green circle with a checkmark inside


  • Bad credit lenders are more flexible with their eligibility criteria.
  • Can help boost your credit score with on-time payments.
  • Borrowers may get lower rates than those offered by most credit cards.
  • If used to consolidate credit card debt, your credit utilization ratio can improve.
Red circle with an X inside


  • Origination fees of up to 10 percent of the loan amount.
  • Interest rates can exceed 35 percent, depending on certain factors.
  • Some lenders may require collateral, as payment insurance.
  • Predatory lenders market their products as “bad credit loans,” so you must be cautious.

Alternatives to bad credit loans

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

Bad credit loan basics

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 score a personal loan with bad credit

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How to get a personal loan with bad credit

You still can snag a personal loan with a low credit score. Here's how.

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Expert advice for bad credit loans

As you're researching bad credit loans, it's important to move carefully. Not every lender is aboveboard, and not every loan you qualify for will be good for your finances.

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

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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.

How to determine if you have 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:

FICO calculates your credit score using five factors: credit mix (10 percent), new credit (10 percent), length of credit history (15 percent), amounts owed (30 percent), and payment history (35 percent).

If your finances fall short in one or more of these areas, your score will drop. For instance, falling behind on payments will impact your payment history, while taking on more debt will impact the amounts owed portion of your score. 

How to spot bad credit loan scams

While shopping for a personal loan, avoid potential scams 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 getting lured into a type of predatory lending product.
  2. 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.
  3. The lender demands payment upfront. If a lender requires you to provide cash out of pocket or a prepaid debit card upfront to cover an application or origination fee, it's not legitimate.
  4. The lender calls, writes or knocks. Phone calls and door-to-door solicitation are not considered legitimate advertising practices for trustworthy lenders.
  5. The lender has no physical address. A reputable lender should have a physical address listed on its website.
  6. The lender pressures you to act immediately. If a lender claims that it can press charges if you don't accept, or claims that the offer expires within the same day, you can guarantee it's a scam.
  7. 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.
  8. It sounds too good to be true. If a lender is promising you will get an extraordinarily low rate without even applying, it is most likely a scam.

Bankrate Insight

If you end up getting 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.

Frequently asked questions