Best Personal Loans For Bad Credit | Best List

Struggling with bad credit can be one of the most stressful experiences a person can have in their life.

When you get into a pressing financial challenge, you may believe that it is impossible to qualify for a personal loan without resorting to predatory payday lenders. In most cases, this is not the case.

It is true that when your credit isn’t in good shape, your personal loan options may be more limited, but that doesn’t mean you have no options. Even if you have a bad credit history, some lenders may give you a personal loan.

In this article, we’ve made a list of the best personal loans for people with bad credit. Carefully read!

What are Bad-credit Loans?

A low credit score or a short credit history are examples of bad credit. Late payments and maxed-out credit cards can both lower your credit score.

Loans for bad credit are an option for people whose credit reflects some financial blunders or who haven’t had time to build a credit history. These loans are classified as either secured (backed by collateral such as a home or car) or unsecured.

The interest rates, fees, and terms of these loans vary depending on the lender.

Various banks, credit unions, and online lenders provide loans to people with bad credit, but the criteria for who is considered a “creditworthy borrower” varies by institution.

Some lenders have more stringent requirements than others, so it is critical to shop around thoroughly when looking for a loan.

What are Personal Loans?

Personal loans are short-term loans made available to consumers by banks, credit unions, or private lenders such as online marketplace lenders and peer-to-peer lenders.

The loan funds can be used for almost any purpose, including paying off other debt, financing a home renovation, or covering family expenses such as a wedding or adoption.

A personal loan, like a car loan or a home mortgage, is repaid in monthly installments, with loan terms ranging from 24 months to 60 months or even longer.

Personal loans are usually unsecured, which means they are not secured by collateral such as a car, house, or other assets.

What is considered a bad credit score?

You can check your credit score using a variety of credit-scoring models, but the FICO credit scoring system is one of the most popular. FICO scores range from 300 to 850, with lower scores considered poor or fair.

According to FICO, a bad credit score is one that falls into one of the following ranges:

  • 580 to 669 is a good credit score.
  • Poor credit ranges from 300 to 579.

A poor or fair credit score can make it difficult to get approved for a loan and even to rent an apartment or buy a home.

If you are approved for a loan despite having bad credit, you will most likely be charged the highest interest rates and fees.

However, there are long-term habits you can develop to improve your credit score, such as paying your bills in full every month and checking your credit report on a regular basis to catch errors.

How to Evaluate Bad Credit Loans

Here are some factors to consider when evaluating bad credit loans:

1. Borrower specifications

On a personal loan application, many bad-credit lenders consider your credit score, but they also consider your monthly cash flow, how consistent your income is your employment history and your other debts.

If a lender has a minimum credit score requirement, you must have at least that score — preferably a higher one — in order to borrow from them.

2. Cost

Although bad credit loans typically have higher interest rates than good credit loans, you should still compare offers to find the most affordable loan. The cost of a loan can be calculated in two ways.

3. Terms

Bad credit loan repayment terms typically range from one to five years. A longer repayment term will result in lower monthly payments, but don’t let it get too long.

However, the longer your repayment term, the more interest you’ll pay in total. Aim for a repayment term that keeps your monthly payments low while also allowing you to pay off the loan quickly.

4. Pace

A bad credit loan may be funded on the same day you apply or it may take up to a week. During the approval process, a lender may request additional documentation, such as W-2s and pay stubs. In that case, you are also responsible for the loan’s funding time.

When comparing offers, funding time should not take precedence over affordability, but this information can help you choose between comparable offers.

5. Credit-building resources

If you have poor credit, look for a lender who can help you understand and improve your credit. Some lenders will give you your FICO score for free and provide financial education to help you learn how to build credit.

How Do I Get a Bad-credit Loan?

Obtaining a personal loan with bad credit is not impossible, but it does necessitate thorough research in order to find the most affordable loan possible.

Here are some steps to take if you don’t have good credit and want to get a personal loan.

1. Examine your credit score

You are entitled to one free credit report per year from each of the credit reporting agencies, but you can currently access weekly reports from until April 20, 2022. However, your credit score is not included in your credit report. You can get it for a fee from a credit bureau or for free from some financial institutions.

2. Ascertain that you will be able to repay the loan

Examine your household budget to ensure that you can afford an additional monthly loan payment.

3. Personal loans for people with bad credit can be compared.

If your accounts with your current bank or credit union are in good standing, it may offer you a personal loan.

You can also look for personal loans for people with bad credit online, but read the fine print and independent reviews about the lender first.

4. Make use of prequalification

Many online lenders allow you to pre-qualify for a loan before you apply, allowing you to see if you’ll qualify without performing a hard credit check.

5. Investigate secured loans

Some lenders provide secured personal loans, which are often easier to get if you have poor credit.

An asset must secure these loans, such as your home or car, but they typically have lower interest rates.

6. If necessary, add a co-signer

Co-signers assume a portion of the loan’s liability and may be required to repay it if you fall behind on payments. Having a co-signer with good credit may help you qualify and result in lower interest rates.

7. Collect financial documents

When applying for a loan, you will most likely be required to provide financial documents such as pay stubs, tax returns, and employment information.

8. Be prepared to undergo a thorough credit check.

While many lenders will pre-qualify you without a hard credit check, the actual application will cause a credit inquiry, which can temporarily harm your credit.

What are the Best Personal Loans for Bad Credit?


MIN. CREDIT SCORE580 FICO and 550 Vantage
EST. APR9.95%–35.99%
LOAN AMOUNT$2,000–$35,000
TERM LENGTHS2 to 5 years

Avant is one of the best online loan lenders. It provides the best overall personal loan to borrowers with bad credit.

If you qualify, you could receive up to $35,000 in funding. Interest rates as low as 9.95 percent are available.

Although Avant charges an administrative fee, the maximum amount (4.75 percent) may be lower than what you may see from other lenders.

There is no prepayment penalty if you pay off your loan early.Higher interest rates in comparison to what you might get elsewhere with better credit.
When you check your loan options online, a soft credit inquiry is performed.Maximum loan amount of $35,000—other lenders offer higher loan amounts.
Lower starting interest rate compared to other subprime lenders, but you may pay more if your credit score is at the low end of Avant’s approval range.An administrative fee of up to 4.75 percent may be deducted directly from the amount of your initial loan.

First Tech Federal Credit Union

This credit union is one of the best personal loans for people with bad credit. This union which was established in 1952 geared towards major technology-geared companies.

When compared to other lenders in this category, this lender has a higher maximum loan amount.To qualify for a lower interest rate, a co-borrower may be required.
Loan terms are longer than those offered by other personal loan companies.Access is restricted to members only, though qualifying for membership can be accomplished through the Financial Fitness Association.
There are no prepayment penalties if you pay off your loan early. 


LendingClub is a 2007 peer-to-peer (or marketplace) lender. This personal loan company the largest online lending platform for personal loans, has worked with over 3 million customers and funded over $55 billion in loans.

It is also one of the most geographically diverse options, with lending capabilities in all states except Iowa and the US territories.

While LendingClub charges high APRs and does not offer an autopay discount, applicants can borrow as little as $1,000. As a result, you won’t have to borrow (and pay interest on) more than you need.

Furthermore, while borrowers are limited to $40,000, this is a higher limit than some other lenders.

OneMain Financial

This is one of the best personal loans for bad credit available. This credit loan is best for borrowers who prefer to do business with a lender face-to-face. Here, the origination fees can be a flat fee from $25 to $400 or 1% to 10% of your loan amount. This depends on the state of residence.

Also, picking this option is also ideal because you will favorable repayment term which maybe 24, 36, 48, or 60 months.

All you need to access this kind of bad credit loan is to provide information about your credit history, income, debts, and any collateral you wish to provide.


  • There are numerous branches for borrowers who prefer to meet or pick up funds in person.
  • There is no prepayment penalty if you pay off your loan early.
  • To check for pre-qualified offers, a soft credit pull is used.


  • When compared to other subprime lenders, the starting interest rate is quite high.
  • When compared to other personal loan providers, the maximum loan amount of $20,000 is low.
  • In addition to interest charges, origination and late fees may be assessed.

PenFed Credit Union

PenFed Credit Union is another credit union that offers personal bad credit loans. Additionally, they also provide a myriad of banking products and services.

Another interesting fact about this credit union is that they give you the funds requested as soon as the next business day and you must give valid information about your credit history, income and debts when applying for a loan, plus your co-borrower if applicable. 

Note, the maximum amount you can borrow is $35,000 and its APR range starts at 5.99%, which is very competitive.


  • There is no prepayment penalty if you pay off your loan early.
  • A co-borrower may help you qualify for a lower interest rate.


  • When compared to other personal loan providers, the maximum loan amount of $35,000 may be considered low.
  • Membership is required to receive a personal loan.

Rocket Loan

Next on our list of best personal loans for people with bad credit is Rocket loans.

Interestingly, Rocket Loans is the sister company of Quicken Loans, an online lender founded in 1985 in Detroit. They provide quick funding as well as competitive annual percentage rates (APRs).
Personal loan interest rates at Rocket Loans range from 5.97 percent to 29.99 percent, including the autopsy

You can borrow between $2,000 and $45,000 with repayment terms of 36 or 60 months, depending on your credit history and income. Although you may be able to qualify with a credit score as low as 580, a stronger credit profile may result in lower interest rates.


  • Potential to receive loan proceeds within the same business day
  • Soft credit inquiry when checking initial rate
  • No prepayment penalties


  • Lender changes an origination fee that’s deducted from final loan amount
  • No cosigners allowed
  • Late payment and insufficient payment fees


Upgrade is a direct online lender that launched in 2017. It provides personal loans as well as the Upgrade Card, a line of credit.
Surprisingly, the goal of its low-cost or bad credit products is to reduce fees.

Depending on your credit history, you may now be eligible for APRs ranging from 5.94 percent to 35.97 percent. Furthermore, Upgrade provides personal loans ranging from $1,000 to $50,000 with terms ranging from 36 to 60 months.

Furthermore, while Upgrade does not specify a minimum credit score on its website, the company will consider your credit score and credit usage history to determine your eligibility.


  • Applicants can check their rate without having their credit score affected.
  • Funding could be available as soon as the next business day.
  • Possibility of applying with a co-signer.


  • The lender assesses an origination fee.
  • Borrowers who do not pay within the grace period will be charged a late fee of $10.

Local Credit Union

The local credit union is one of the best bad credit personal loans suitable for those in need of dollar loans to solve their credit problems. This credit union is an alternative to a Payday Alternative Loan. That means, in a situation whereby you have an issue using PAL, the Local Credit Union can serve.

Currently, the maximum amount you can borrow with a PAL is $1,000. However, because the interest rate is limited to 28%, PALs are a more affordable option than payday loans and even some online personal loans for bad credit.

Note, Local Credit Union requirements vary by lender, but may include direct deposit participation, on-time payment history with other credit union loans, and employment verification.


  • The interest rates are lower than those of payday loans and some online personal loans.
  • The low application fee is capped at $20 nationwide.


  • The $1,000 maximum loan amount may not be sufficient to meet your borrowing needs.
  • Depending on the lender, a minimum membership period in the credit union may be required.


LendingPoint is a personal loan lender that operates online. Its headquarters are in Kennesaw, Georgia, and it processes $100 million in originations per month through its platform, which employs data algorithms and technology.

It is one of the best bad credit personal loans that are a competitive option for borrowers with fair credit who want to borrow up to $36,500 and get funding quickly.

To apply, you must be at least 18 years old, have a state or federal ID, a Social Security number, and a bank account in your name. You must also have a minimum annual income of $2,000 to qualify.


  • Lower credit scores are acceptable if you meet other qualification criteria.
  • Past bankruptcy isn’t necessarily a deal-breaker if it was discharged at least a year ago.
  • If you want to pay off your loan early, there is no penalty.


  • When compared to other lenders, the maximum loan amount is lower.
  • Depending on the state where you live, origination fees can be as high as 6%.
  • Higher interest rates in comparison to the APR you might be offered elsewhere if you have better credit.


That you have bad credit doesn’t mean you should turn to a predatory payday lender when you have an emergency. Even if you have credit problems, you should still compare all of your available options because a more affordable solution may be available.



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