Bad Credit Loans: Start Your Search Here

How to get a bad credit loan

It can be possible to get a personal loan with bad or no credit. However, if you can take time to work on your credit, you could save a lot of money by benefiting from a lower interest rate. If you need a personal loan now, however, consider these tips to finding the best personal loan for bad credit for you:

• Check your credit score. You can request your credit report through TransUnion, Experian or Equifax for free using annnualcreditreport.com, which are currently available weekly . Doing so will help you gauge the lenders you may qualify for.
• Seek lenders that consider more than just your credit. Lenders whose assessment of your creditworthiness is not solely dependent on your FICO Score may be easier to qualify with, depending on your financial situation.
• Prequalify for loans online. Through prequalification, you can check whether you’d likely be approved for a loan and what rates you might be eligible for — plus, this process won’t harm your credit score, as it only generates a soft inquiry. This could be a good way to assess what you could qualify for and how much it would cost you in the long term.
• Compare loan offers. Once you’ve received a few personal loan offers, you’ll want to select the best option for you. That means reviewing interest rates, lender fee structures and available terms.
• Submit an application. After narrowing down your options, it’s time to submit a formal application. This will trigger a hard inquiry, which will affect your credit. After applying, you may need to wait a few business days to receive a loan decision. If denied for credit, you’ll be notified of factors that contributed to the denial.

Loan companies that work with poor-credit borrowers

Avant

• APR: 9.95% to 35.99%
• Minimum credit requirement: 600
• Terms: 24 to 60 months
• Origination fee: Up to 4.75%

If you’re approved for a personal loan with online lender Avant, you could see your funds deposited into your bank account as soon as the next business day. Loan terms may range between 24 to 60 months. This lender also reports to all three credit bureaus, so getting a loan through Avant may increase your chances of getting approved for future credit opportunities no matter which bureau a credit check is run through. Minimum loan amounts may vary by state. Avant charges a $25 if your payment is 10+ days late as well as a $15 dishonored payment fee.

Peerform

• APR: 5.99% to 29.99%
• Minimum credit requirement: 600
• Terms: 36 or 60 months
• Origination fee: 1.00% - 5.00%

Peerform is an online peer-to-peer lending marketplace. When you apply for a loan, your credit risk is calculated using an algorithm. You are then assigned a grade with a corresponding interest rate. If you receive initial loan approval, your loan request will appear in the Peerform marketplace, where it gets evaluated — and potentially funded — by investors.

Unlike some competitors, Peerform takes other criteria into consideration when determining your eligibility for a loan, rather than just your credit score: It also looks at your debt-to-income (DTI) ratio (which must be below 40%), income and overall credit profile.

LendingPoint

• APR: 7.99% to 35.99%
• Minimum credit requirement: 585
• Terms: 24 to 72 months
• Origination fee: 0.00% - 7.00% depending on your state

LendingPoint sees your credit score as only one piece of the financial puzzle. In addition to your credit, this lender also evaluates your job history, banking and financial track record, personal income and recent credit behavior. Once you apply online, a decision is made within seconds and you could get your funds deposited in your account as soon as the next business day.

LendingPoint applicants must have an annual income of $25,000 or higher, and cannot apply with joint or cosigned loans. This lending agency does not offer loans to those living in Nevada or West Virginia.

Upgrade

• APR: 6.95% to 35.97%
• Minimum credit requirement: 620
• Terms: 36 or 60 months
• Origination fee: 1.85% - 8.00%

You could be eligible to borrow as little as $1,000 or as much as $50,000 if you qualify for a personal loan from Upgrade. After verifications are cleared, you could receive your funds as soon as one business day from the time of approval. Loans may have varying minimum amounts, depending on the state; however, they are unavailable in West Virginia and Washington, D.C.

Upgrade also offers auto secured loans and charges $10 late payment fees as well as $10 failed payment attempt fee.

Upstart

• APR: 4.37% to 35.99%
• Minimum credit requirement: 600
• Terms: 36 or 60 months
• Origination fee: 0.00% - 8.00%

Upstart, an online lender, uses artificial intelligence, rather than traditional FICO Score-based models, to make lending decisions. It also offers larger personal loans for poor credit than other conventional lenders. The minimum amount you must borrow depends on your state of residence, though Upstart loans are not available at all in Iowa or West Virginia. You could receive your funds the next business day after you accept the terms of your loan. Joint applications are not available through Upstart.

Upstart charges late payment fees equal to 5% of past due amount or $15, whichever is greater as well as $15 for a failed payment.

*The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

LendingClub

• APR: 7.04% to 35.89%
• Minimum credit requirement: Not specified
• Terms: 36 or 60 months
• Origination fee: 3.00% - 6.00%

LendingClub is another lending marketplace through which you could borrow up to $40,000 and get funds in as little as 48 hours. You may also change your due date with LendingClub, either as a one-time occurrence or permanently, though, be sure to check how changing your payment deadlines could affect your interest rates.

While LendingClub does charge late payment fees, it also offers a 15-day grace period where you can avoid any penalties if you pay within that time frame. The option of adding a cosigner is not available; however, this lender does allow people to apply for a joint personal loan with a co-borrower. Borrowers in Iowa are not eligible for personal loans through LendingClub.

OneMain Financial

• APR: 18.00% to 35.99%
• Minimum credit requirement: Not specified
• Terms: 24 to 60 months
• Origination fee: 1.00% - 10.00%

OneMain Financial has the lowest loan amount cap on our bad credit loans lender list, so this company may be best for those searching for smaller-sized bad credit loans. For borrowers with bad credit, OneMain Financial offers unsecured and secured loans which may require collateral, such as a vehicle.

While OneMain Financial’s APR rates are fairly high, they may be lower than what you may find with other bad credit loan companies and predatory lenders. OneMain Financial charges late fees either ranging from $5 to $30 or as a percentage of your entire monthly payment charge (or the late portion of your monthly payment) which ranges from 1.5% to 15%.

Happy Money

• APR: 5.99% to 24.99%
• Minimum credit requirement: 640
• Terms: 24 and 60 months
• Origination fee: 0.00% - 5.00%

Happy Money (formerly Payoff) bad credit loans are specifically available to help borrowers eliminate their credit card debt. Other than its origination fee, Happy Money does not charge you application fees, prepayment penalties or late fees. If you are approved by this lender, you can typically expect to see your lump sum deposited into your account within two to five business days, which can be a much slower rate than other lenders on this list.

Be aware that if you borrow more than $15,000 from this lender, you’ll be subject to higher APR rates. Happy Money does not offer joint applications, and is not available in Massachusetts or Nevada. You must have at least three years of credit history in order to be eligible for a loan.

What are bad credit loans?

If you have a bad credit score, it’s often due to a lack of time or opportunity to build up your credit, missteps with your finances or perhaps being a victim to identity theft. Credit scores in the U.S. can be broken down into the following FICO score ranges.

Source: LendingTree

Unfortunately, those with unpolished credit scores often get saddled with high interest rates as well as other less than ideal terms when applying for a loan. If you have bad credit, it is typically difficult for you to qualify for a loan.

Poor credit loans often have fixed rates and are backed by lenders willing to loan you funds despite your limiting credit rating. These types of loans can help you build credit so you can eventually become eligible for better loan terms and other financial opportunities.

When applying for personal loans for bad credit, be sure to check the fine print on whether you qualify, as factors like the required minimum credit score may differ depending on the lending institution.

How to compare personal loans for bad credit

Compare lender APRs

The annual percentage rate (APR) is what your financial institution charges you for taking out a loan, but it is not the same as the interest rate.

While the APR does include the interest rate you will be paying to borrow the funds, it gives you a more comprehensive picture of how much your loan will cost, as it also takes into account any additional fees. The lower the APR is, the less the loan will cost you over time. Therefore, you may want to choose a lender that can offer you a lower APR.

Account for fees

Your financial institution could charge you several fees for your personal loan, in addition to the annual interest rate. Some of these fees could include administrative costs deducted upfront from the amount you are borrowing, while others could be charged for making a late payment or paying off your loan before the end of its term.

Read lender reviews

Do your due diligence when deciding on the best lender for your needs. As part of your research, make sure to read online lender reviews.

Consider secured vs. unsecured loans

One point to look out for when researching loans is the choice between secured and unsecured loans.

Secured loans

With a secured loan, you’ll have to offer your lender an asset as collateral, like a car, a home or even a savings account. If you default on a secured loan, the lending institution may legally confiscate your collateral to make back the money.

And if your lender doesn’t recoup the cost of the loan by redeeming your assets, you may be responsible for the difference. Because secured loans require valuable collateral, they are often easier to obtain than unsecured loans and generally offer better rates, since the lender is at less risk.

Unsecured loans

Since unsecured loans don’t require borrowers to offer up collateral, lenders of these types of loans mostly rely on factors such as credit history, income and debt obligations to determine your eligibility. Unlike secured loans, if you end up defaulting on an unsecured loan, your lender cannot seize your assets.

Examine repayment terms

Your repayment terms can make a difference in how large or small your monthly payments may be. Generally, lenders offer unsecured personal loan repayment terms between 12 to 60 months, but you can find loans with long-term repayment plans. The longer your payment term, the higher your APR rate may be, but you’ll pay in smaller monthly payments. If your repayment plan is shorter, however, your APR rates may be lower, but your monthly payments will be larger.

While some lending companies only offer two to three different repayment terms, other companies may have more flexible terms to choose from.

Can you get a personal loan with no credit check?

There is no such thing as a no-credit-check personal loan. What you may come across are predatory offers from unscrupulous lenders who will charge you exorbitant interest rates or offer unfavorable terms (or both), and require you to put up collateral like your vehicle or next paycheck. These products are commonly known as payday loans.

While payday loans don’t require a credit check, they do often come with triple-digit APRs and short repayment periods. Because it can be easy to roll over your original payday loan into a new one, you could get stuck in an infinite cycle of debt that’s hard to repay.

How to spot scams for bad credit loans

Unfortunately, some poor-credit loans really are too good to be true. To avoid being scammed by a shady lender, be on the lookout for the following signs:

• The lender demands you pay fees upfront
• The lender requires you to act immediately
• The lender has no physical address
• The lender is not registered in your state
• The lender contacts you first
• The lender doesn’t have a secure website
• The lender doesn’t check your payment history
• Plus: What to do if you’ve been scammed

The lender demands you pay fees upfront

A legitimate lending institution won’t ask for payment before you’ve been approved and receive your loan. While some trustworthy lenders may require that you pay an application fee or a credit report fee, these are typically taken out of the loan you borrowed.

The lender requires you to act immediately

If a lender is pressuring you to make a decision within a small window of time, that may be a red flag. A proper lender won’t corner you and understands that the decision to take out a loan may require some time to think over. If a lender tells you their offer will expire or gives you a time limit, you may want to avoid them — this is a common tactic that scammers use.

The lender has no physical address

A reputable lender will have the company’s physical address listed on its website, and you will be able to confirm it by using Google Maps or a similar app. If a lender lists a post office box, an address that can’t be found or no address at all, it may be attempting to con you.

The lender is not registered in your state

Whether a lender is online or in person, in order to do business in your state, it must be registered in your state, according to the Federal Trade Commission (FTC). A lending institution should note which states it is or isn’t registered with available on its website. If you’re suspicious of a scam, you can reach out to your state attorney general’s office to find out if that lender is registered where you live.

The lender contacts you first

If you did not initiate contact with the lender, you may not want to answer any phone calls or other types of communication they send you. It may be a ploy to get your financial information. A credible lender won’t cold call you, asking you to disclose your information.

The lender doesn’t have a secure website

Some scammers may attempt to steal your information through their website. When researching bad-credit loans, be sure to check that a website’s URL has the letter “s” following “http,” as well as a padlock icon on pages that ask you for your financial information. If these safety indicators are not in place, a scammer may be attempting to take advantage of you.

The lender doesn’t check your payment history

A reputable lender won’t guarantee your approval for a loan. Real lending institutions will first want to see your payment history, your credit and DTI ratio and other financial information. If a lender dismisses vital info like this, you may have come across a scam.

What to do if you’ve been scammed

If you find out you’ve been scammed, the first step is to contact law enforcement and file a police report. Unfortunately, there may not be much they can do, but you’ll want to document the crime as much as possible.

Once you’ve filed a police report, you should also report the scam to the FTC Internet Crime Complaint Center. Again, you’ll have to file a complaint to document the incident, but by reporting it, you could also prevent others from also being scammed in the future.

Bad credit loans: FAQ

Can you ask for a loan with bad credit?

Yes, even if your credit score is less than ideal, you can still qualify for a loan at some lending institutions. Some specifically have bad-credit loans available to those looking for an opportunity to build their credit profile and improve their history. However, even these types of lenders require minimum credit scores, so be sure to do your research to see if you are eligible.

What credit score is needed for a $5,000 loan?

In order to get a loan, most lending institutions require that you have a credit score of at least 600. However, with a credit score of 670 or above — which FICO considers a good score — you’ll have many more options on lenders, rates and loan terms. If your score needs some work, there are fortunately plenty of ways you can improve your credit.

What do you need to get approved for a loan?

When applying for a loan, you’ll probably need to provide a lender the following information to find out whether you are eligible:

• Your credit score
• Your payment history
• Your income and/or employment information
• Your banking information

Before applying for a loan, make sure all your paperwork is in order and that your credit profile is strong enough to qualify.

Where can I get a loan fast?

Companies such as Avant, Upgrade, Lendingpoint and Upstart can provide you with your loan amount within the next business day after you are given the green light. Keep in mind that receiving these loans within one day of approval is not guaranteed.

How long will it take to get my loan?

It can take anywhere from one to five business days to receive your funds once you are approved by a lender for a bad credit loan. However, this wait period does not account for the time it takes to be approved for a loan. Depending on the lender, this can take anywhere from one day to several days.

Can I get a bad credit personal loan with a cosigner?

If you have bad credit and believe you may have a difficult time obtaining a bad credit loan, some lenders will allow you to apply with a cosigner or joint applicant. If the cosigner or joint applicant has good credit, this may bump up your chances of getting approved for an unsecured personal loan. However, whoever you ask to cosign a loan with you should be aware that if you are unable to repay the loan, they will be responsible for it.