Best Personal Loans for Bad Credit

Best Personal Loans for Bad Credit

Personal loans have become extremely popular in recent years. A large and growing number of online lenders, as well as many banks and credit unions, are offering them. But, is it possible to get personal loans for bad credit?

Based on our research, the answer is a resounding yes!

And while the pricing and terms are more restrictive than they are for personal loans for good or excellent credit, they can provide the same advantages if you have fair or poor credit.

Best Personal Loans for Bad Credit

Here are the top 10 lenders of the best personal loans for bad credit:

  1. OneMain Financial: Best for Local Branch Network
  2. PeerForm: Best for Fair or Average Credit
  3. NetCredit: Best for Underserved Consumers
  4. Avant: Best for Damaged Credit
  5. PersonalLoans.com: Best for All Credit Levels
  6. BadCreditLoans.com: Best for Really Bad Credit
  7. Upstart: Best for Borrowers with Limited Credit History
  8. LendingTree: Best for Personal Loan Shopping
  9. LendingPoint: Best for Low-Income Borrowers
  10. Upgrade: Best for Personal Lines of Credit

OneMain Financial – Best for Local Branch Network

OneMain Financial has no specific minimum credit score requirement, but the average borrower’s credit score is in the 600s range. That could mean that while OneMain Financial may make personal loans for bad credit, it may be a better choice if you have fair credit.

One advantage they offer is that you can get a credit decision in less than 10 minutes, and funds within one or two business days by bank payment. Alternatively, if you live near one of their more than 1,500 local branches, you can get a check issued on the same day.

They also offer something that’s unique in the personal loan space. Though personal loans are typically unsecured, OneMain Financial offers a secured loan option. It may enable you to qualify for a lower interest rate, a larger loan amount, or even a longer loan term. You can use cars, trucks, motorcycles, boats, campers, and even RVs for collateral.

OneMain Financial Features:

  • Minimum credit score required: No specific minimum, but averages between 600 and 650
  • Minimum and maximum loan amount: $1,500 to $20,000
  • Interest rate range: 18.00% to 35.99% APR
  • Loan term range: 2, 3, 4 or 5 years
  • Origination fees: 1% to 10%, or flat fee of $25 to $400, depending on your state of residence

Learn More: Read our full OneMain Financial Personal Loans review

PeerForm – Best for Fair/Average Credit

PeerForm will be a better choice if you have at least fair credit. Their minimum credit score is 600, which may not quite accommodate those with bad credit. Loans are actually provided by Cross River Bank, and generally have more conservative terms than those offered by other lenders on this list.

For example, Peerform loans have a maximum of $25,000, and limit terms to no more than three years on most loan types, with an exception up to five years for debt consolidation loans. But, you can borrow for just about any purpose, including weddings, home improvement, uncovered medical expenses, moving and relocation, and even car financing.

They also have somewhat lower interest rates and fees than other lenders — the maximum interest rate topping out at 29.99% APR — and a maximum origination fee of 5%.

Peerform Features:

  • Minimum credit score required: 600
  • Minimum and maximum loan amount: $4,000 to $25,000
  • Interest rate range: 5.99% to 29.99% APR
  • Loan term range: 3 or 5 years (5 years on consolidation loans only)
  • Origination fees: 1% to 5%

Learn More: Read our full Peerform Loans review

NetCredit – Best for Underserved Consumers

NetCredit works a little differently than the other personal loan lenders in the industry. Not only do they offer personal loans with fixed rates and terms, but in some states, they also make personal lines of credit available. And, NetCredit is a true poor-credit lender, since they have no minimum credit score requirement. The company even specifically services the underserved borrowers. You can borrow money for just about any purpose, and receive funds as quickly as the same business day.

Loans made through the platform are underwritten, approved, and funded by Republic Bank & Trust Company. However, be aware that loan terms, loan amounts, interest rates, and origination fees vary by state, and sometimes widely. For example, the maximum interest rate may be 36% in one state, and 155% in another.

Also be aware that NetCredit doesn’t offer loans in all states. For example, loans are not available in New York, Massachusetts, Colorado, Connecticut, Maine, Maryland, New Hampshire, Pennsylvania, Vermont, or West Virginia.

NetCredit Features:

  • Minimum credit score required: Poor credit
  • Minimum and maximum loan amount: $500 to $10,000
  • Interest rate range: 34.99% to 155.00% APR
  • Loan term range: 6 months to 5 years
  • Origination fees: Up to 5%

Learn More: Read our full NetCredit Personal Loans review

Avant – Best for Damaged Credit

Avant has a minimum credit score requirement of 580. That won’t include everyone with bad credit, but certainly those with impaired credit, including recent derogatory items on their credit reports. But, like most lenders on this list, your loan proceeds will be available as early as the next business day after approval. Loans are both funded and serviced by WebBank.

Avant also offers an interesting option to get better terms on your loan. By using your vehicle as security, you can receive a reduced interest rate. However, if you do go the secured route, the maximum loan amount will be $25,000 (not the usual $35,000) with a loan term of not more than four years. However, not only will your interest rate be lower; the administrative fee will drop from 4.75% down to 2.5%.

Avant Features:

  • Minimum credit score required: 580
  • Minimum and maximum loan amount: $2,000 to $35,000
  • Interest rate range: 9.95% to 35.99% APR
  • Loan term range: 2 to 5 years
  • Origination fees: Administrative fee, up to 4.75%

Learn More: Read our full Avant Personal Loans review

PersonalLoans.com – Best for All Credit Levels

PersonalLoans.com is a loan aggregator, which means it includes participation by multiple personal loan lenders. You will complete a single online application and potentially receive multiple loan offers from different lenders. You can then select the one that best meets your needs. They even give you a choice between personal installment loans, bank loans, and peer-to-peer loans. Exactly which type you qualify for will depend on your credit score.

Despite the fact that they advertise being available for all credit levels, there is a minimum credit score of 580. And, an additional complication is that you may not qualify if you have a recent major derogatory item on your report, such as a recently discharged bankruptcy or a series of late payments within the past year or so.

PersonalLoans.com Features:

  • Minimum credit score required: 580 with no recent major entries (bankruptcy, foreclosure, etc.)
  • Minimum and maximum loan amount: $500 to $35,000
  • Interest rate range: 5.99% to 35.99% APR
  • Loan term range: 3 months to 3 years
  • Origination fees: 1% to 8%

Learn More: Read our full PersonaLoans.com review

BadCreditLoans.com – Really Bad Credit

BadCreditLoans.com is another personal loan aggregator giving you an opportunity to get loan quotes from several lenders via a single application. It may be the best overall option if you have very poor credit, since they’ll accept credit scores that are even lower than 500.

Exactly what terms you get on your loan offers will vary by lender. Loan amounts are generally smaller than on other lending platforms, because of the wider acceptance of lower credit scores. You may get no more than $500, though it may be possible to go as high as $10,000. You should also be aware that origination fees could be steep, up to 8%. This lender is best used for smaller loan amounts with shorter loan terms. But it may be the go-to platform if you have poor credit.

BadCreditLoans.com Features:

  • Minimum credit score required: Less than 500
  • Minimum and maximum loan amount: $500 to $5,000 (but may go to $10,000 in limited cases)
  • Interest rate range: 5.99% to 35.99% APR
  • Loan term range: Three months to three years
  • Origination fees: 1% to 8%

Learn More: Read our full BadCreditLoans.com review

Upstart – Best if You Have Limited Credit History

Upstart isn’t a direct lender, but it isn’t an aggregator either. Instead, it’s a platform that includes participation by several partnering banks. Similar to personal loan aggregators, you can complete a single application and receive loan quotes from several lenders at once.

Though they have a minimum credit score requirement of 600, you may be able to qualify even if you don’t have a credit score at all. Your credit profile can be accepted if your credit history is not deep enough to generate a credit score. It’s important to realize that this doesn’t mean they’ll accept a very low credit score. Any credit score below 600 is likely to result in a rejection.

Even if you have a credit score of over 600, they have specific requirements related to the quality of your overall credit. For example, you may not be accepted if any bankruptcies or public records appear on your credit report, any collections or past due accounts appear within the past three years, or even if you had more than six inquiries in the last six months.

Upstart Features:

  • Minimum credit score required: 600
  • Minimum and maximum loan amount: $1,000 to $35,000
  • Interest rate range: 8.13% to 35.99% APR
  • Loan term range: 3 or 5 years
  • Origination fees: None

Learn More: Read our full Upstart Personal Loans review

LendingTree – Best for Personal Loan Shopping

LendingTree is probably the ultimate platform to shop for a personal loan from the widest possible selection of lenders. Scores of lenders participate on the platform, including some of the personal loan lenders included in this guide. That will give you an excellent chance of getting the loan of your choice at the best possible rate.

LendingTree is also an excellent source for just about any other type of loan you may be interested in. That includes mortgages and home equity lines of credit, student loans, auto loans, credit cards, and even business loans. In addition, they offer other financial services, including debt relief and insurance.

Because so many lenders participate on the platform, we’re not able to provide information on minimum credit score requirements, loan amounts, loan terms, interest rates, or origination fees. But, because the platform involves participation from the largest number of personal loan lenders, LendingTree can be one of the best sources for personal loans for bad credit.

LendingTree Features:

  • Minimum credit score required: Varies by lender
  • Minimum and maximum loan amount: Varies by lender
  • Interest rate range: Varies by lender
  • Loan term range: Varies by lender
  • Origination fees: Generally none

Learn More: Read our full LendingTree Personal Loans review

LendingPoint – Best for Low Income

LendingPoint provides loans through FinWise Bank, a Utah-chartered bank. They make loans for consumers with credit scores as low as 585, which may be more targeted toward those with fair credit. But, if they have a strength, it’s that they require very low minimum income to qualify, at just $20,000 per year.

Loan terms also tend to be a bit more conservative than other lenders, with a maximum loan amount of $25,000, and maximum loan terms of 48 months. These are below the $35,000 and 60 months more commonly offered on other personal loan platforms.

LendingPoint Features:

  • Minimum credit score required: 585
  • Minimum and maximum loan amount: $2,000 to $25,000
  • Interest rate range: 5.99% to 35.99% APR
  • Loan term range: 24 to 48 months
  • Origination fees: 0% to 6%

Upgrade – Best for Personal Loans or Personal Lines of Credit

Upgrade offers personal loans with terms similar to other lenders on this list. The minimum credit score requirement is 600, which may limit applications to those with at least fair credit.

But Upgrade offers a twist not available from other lenders. You can obtain a personal line of credit — instead of a personal loan — that comes with the Upgrade Credit Card attached. It can be used anywhere Visa is accepted. That may be an advantage if you have a credit score below 650 and difficulty getting a traditional credit card.

And while you can use the card the way you would use any credit card on the spending side, repayment more closely approximates a personal loan. Each time you access your credit line, repayment is set up on a specific term and fixed rate of interest. That will avoid the typical revolving debt trap so many borrowers get caught in.

You’ll need a minimum credit score of 620 to qualify for the personal line credit card. The maximum credit limit is $20,000, with a maximum interest rate of 29.99% APR. There are no origination fees for the personal line, and the maximum term is 60 months.

Upgrade Features:

  • Minimum credit score required: 600
  • Minimum and maximum loan amount: $1,000 to $35,000
  • Interest rate range: 7.99% to 35.97% APR
  • Loan term range: 3 to 5 years
  • Origination fees: 2.9% to 8%

Best Personal Loans for Bad Credit – Lender Feature Summary

Lender / Feature Minimum Credit Score Minimum – Maximum Loan Amount Interest Rate Range (APR) Loan Term Range Origination/ Administrative Fees
OneMain Financial 600 – 650 Average but no minimum $1,500 to $20,000 18.00% to 35.99% 2, 3, 4 or 5 years 1% to 10%, or flat fee of $25 to $400
PeerForm 600 $4,000 to $25,000 5.99% to 29.99% 3 or 5 years 1% to 5%
Net/Credit Poor credit $500 to $10,000 34.99% to 155.00% 6 months to 5 years Up to 5%
Avant 580 $2,000 to $35,000 9.95% to 35.99 2 to 5 years Up to 4.75%
PersonalLoans.com 580 with no recent major entries $500 to $35,000 5.99% to 35.99%  3 months to 3 years 1% to 8%
BadCreditLoans.com >500 $500 to $10,000 5.99% to 35.99% 3 months to 3 years 1% to 8%
Upstart 600 $1,000 to $35,000 8.13% to 35.99% 3 or 5 years None
LendingTree Varies by lender Varies by lender Varies by lender Varies by lender Generally none
LendingPoint 585 $2,000 to $25,000 5.99% to 35.99% 24 to 48 months 0% to 6%

 

Upgrade 600 $1,000 to $35,000 7.99% to 35.97% 3 to 5 years

 

2.9% to 8%

How We Chose The Best Personal Loans for Bad Credit

There are many different lenders now participating in the personal loan space. But, a much smaller number are available for bad credit loans.

After reviewing more than two dozen lenders that provide personal loans for bad credit, we’ve narrowed the list down to 10 of what we believe to be the best personal loans for bad credit.

We’ve not ranked these lenders in any specific order. Instead, we’ve included what we believe each lender to be “best for.” That is, we’ve attempted to identify what we believe to be the niche each lender specializes in. There is no one best lender in the field, so it really comes down to which one will work best for you.

However, we used the following criteria to evaluate the lenders we’ve included:

  • Minimum credit score required. Credit score is the most obvious factor in determining if a lender makes bad credit loans. While all the lenders on this list will accommodate at least fair credit, there were only a couple that will accept truly bad credit. That would be a credit score less than 580.
  • Minimum and maximum loan amount. The maximum loan amount we found for bad credit loans is $35,000. But, the lower the credit score accepted, the lower the maximum loan amount will be as well.
  • Interest rate range. If you have bad credit, you should expect to pay a higher interest rate. The typical maximum is between 30% and 36%. But, higher rates are available from lenders that accept the lowest credit scores.
  • Loan term range. These can vary between a few months and a few years, with three to five years being the most typical range. Naturally, we emphasized lenders that are within that range.
  • Origination fees. Though it’s common to get personal loans with no origination fee if you have good or excellent credit, there is almost always one if you have fair or poor credit. You should generally expect to pay between 5% and 10% for an origination fee if your credit score is below average.

There’s one other factor not listed above, and that’s a prepayment penalty. Based on our research, none of the lenders on our list have this fee. You’ll be able to pay off your loan at any time without paying a penalty.

What are Personal Loans?

Personal loans are unsecured loans that can be used for just about any purpose. In that way, they provide many of the same benefits as credit cards, which are also generally unsecured. But the main difference between personal loans and credit cards is in the terms and pricing.

While credit cards operate on a revolving basis and have variable interest rates, personal loans are set up like installment loans — with fixed terms, interest rates, and monthly payments.

That gives them a major advantage over credit cards in that they offer stability and predictability. For example, while a credit card can literally have an open balance indefinitely, personal loans typically have a fixed term, generally between three years and five years. That means the loan will be fully repaid at the end of that term.

And, since they also come with fixed interest rates and monthly payments, your payment will remain constant. This is unlike credit cards, where the monthly payment can go up and down based on the outstanding balance on your credit line.

Stability also points to what may be the single biggest benefit of personal loans, which is debt consolidation.

If you’re carrying high interest credit card debt and can’t seem to pay it off, personal loans are one of the best solutions. Because they are typically available with high loan amounts, you can consolidate several high-interest credit cards on a single personal loan and get it paid off in five years or less.

Apart from debt consolidation, the proceeds from a personal loan can be used for just about any purpose. That includes making home improvements, buying a car (without pledging the car as collateral), or paying uncovered medical expenses, wedding expenses, home improvements, among many other options.

What are Personal Loans for Bad Credit

Personal loans for bad credit work the same way as they do for those made to borrowers with good or perfect credit. The main difference is that they’re specifically designed for those with below-average credit.

For example, many lenders will make personal loans if you have a credit score of 650 or higher. And naturally, the higher your credit score, the lower your interest rate will be.

Personal loans for bad credit are generally available for those with credit scores below 650. Many will accommodate credit scores as low as 600 or even 580, and a few will go even lower.

But, you should fully expect to pay a much higher interest rate, especially if your credit score is below 600 or 620. Even in spite of the potentially high interest rate, personal loans for bad credit offer an opportunity to get a large loan amount with no collateral and proceeds that can be used for just about any purpose.

If you need a large amount of money, and your credit score isn’t good enough to get a high balance credit card or a personal loan for good or excellent credit, personal loans for bad credit are likely to be your best credit option.

Final Thoughts on Best Personal Loans for Bad Credit

If you have fair or bad credit, we’ve provided you with as many as 10 lenders where you can get a personal loan. In fact, it’s potentially more than that, since some of the lenders include personal loan aggregators with multiple participating lenders.

If you have bad credit and you do plan to take a personal loan, be sure you understand you’ll be paying a high interest rate. Weigh that against the benefit you’ll get in exchange for that rate.

For example, it may be worth paying the higher rate if a personal loan will enable you to finally get off the credit card merry-go-round. It’s also an excellent choice if you have large, uncovered medical expenses, or some other necessary expense you need to cover.

From there, make sure you borrow no more than you absolutely need to meet whatever the necessary obligation is. After all, you’ll already have a high interest rate. A larger loan amount will translate into a higher monthly payment.

Used for the right purpose and in the right amount, personal loans for bad credit can work to your advantage.

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