The Best Personal Loans For Bad Credit (Updated Nov 2019)

The Credit Review
December 10, 2019 Personal Loans
The Best Personal Loans For Bad Credit (Updated Nov 2019)

A personal loan is a tool you can use to help with certain situations, like paying for home maintenance, personal emergencies, education-related expenses, or even paying off high-interest credit card debt.

When you're struggling with a bad credit score, finding a personal loan with reasonable interest rates can be difficult. Fortunately, many loan marketplaces and lenders offer loans for bad credit.

Below, we break down the best lenders and personal loans for consumers with bad or poor credit scores (typically defined as FICO® scores lower than 620).

Our Top Lenders For Borrowers With Bad Credit

Our lenders make it possible to receive a personal loan with bad credit.

When comparing different lenders to find the best personal loans with bad credit, we looked for the following criteria when deciding which companies to recommend:

  • Full loan details disclosure: All lenders we recommend prominently display loan details, including APRs and estimated monthly payments. You can compare offers before making any decisions.
  • No upfront fees: No reputable lenders should ask you to pay upfront fees. You should only have to pay your regularly scheduled bill.
  • Secure loan application processes: Their website should start with “https” rather than “http” (the “s” means the website is secure). Bank-level encryption should be used during the application process to guard your personal information.
  • Reasonable interest rates: APRs for bad credit loans should be ideally under 36%.

If you are struggling with your credit but you are seeking a personal loan from a reputable lender, here are some of our top picks for the best bad credit personal loans:

1. 5KFunds

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  • Minimum Credit Score: No minimum credit score
  • APR: 5.99% to 35.99%
  • Loan Amounts: Up to $35,000
  • Term Length: 2 to 72 months

5KFunds is a completely free and fast online lender comparison service that allows you to find the best loans for bad credit.

Regardless of your credit score, the free to use 5KFunds marketplace is ideal for helping you find a lender for fast funding with reasonable interest rates.

5KFunds has an extensive partner network of over 100 lenders that compete for your business with their competitive interest rates and quick funding that is directly deposited to your bank account.

Read our 2019 5KFunds review.

2. OppLoans

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  • Minimum Credit Score: 350
  • APR: 59% to 199%
  • Origination Fee: 0% to 3%
  • Loan Range: $1,000 to $4,000
  • Term Length: 9 to 24 months

OppLoans can help consumers find a short-term personal loan with bad credit. OppLoans has thousands of exceptionally positive customer reviews, with an overall score of 4.9 of 5 on Google reviews and an A+ rating with the BBB (as of November 3rd, 2019).

These loans are provided directly rather than using a loan marketplace and do not require a credit check, so your FICO® score will not be affected. However, they do check your bank account for transaction information collected by the bureau Clarity Services, which collects data on consumers with poor credit.

You must meet several requirements to qualify for a loan through OppLoans:

  • Have a minimum credit score of 350
  • Be at least 18 years of age or meet the state's minimum age requirement, whichever is higher
  • Have an annual income over $18,000
  • Be a US citizen or permanent resident
  • Have an active and valid checking account
  • Have a steady income via direct deposit
  • Have a valid Social Security number
  • Meet your state's minimum income requirement (which can range from $1,300/month to $3,600/month)
  • Live in one of the eligible states
  • You cannot be an active duty servicemember or covered dependent; The Military Lending Act prohibits lenders from charging active servicemembers an APR over 36%

Consumers must meet several requirements to qualify for a loan from OppLoans that include a minimum credit score, age, and income requirement.

You will usually be approved or denied for your loan application within one business day, but keep in mind that a pre-approval from OppLoans doesn't ultimately guarantee a loan.

Once you have signed your loan agreement, you can receive your funds via direct deposit within one to two business days.

OppLoans provides consumers with bad credit short-term personal loans in 34 states and Washington, DC. They offer installment loans in the following states: Alabama, California, Delaware, Georgia, Idaho, Illinois, Mississippi, Missouri, Nevada, New Mexico, Ohio, South Carolina, Texas, Utah, and Wisconsin. Loans originated and funded by FinWise Bank are offered in Alaska, Arizona, California, District of Columbia, Florida, Hawaii, Indiana, Kentucky, Louisiana, Maine, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Washington, and Wyoming.

They currently offer lines of credit in Kansas, Tennessee, and Virginia.

Read our 2019 OppLoans review.

3. BadCreditLoans.com

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  • Minimum Credit Score: No minimum credit score
  • APR: Depends on the lender
  • Loan Range: $500 to $5,000
  • Term Length: 3 months to 5 years

BadCreditLoans.com offer personal loans for bad credit. They do not directly lend to you, but instead sends your information to a network of trusted online lenders who contact you with loan offers.

To apply at BadCreditLoans.com, you must meet the following requirements:

  • Be at least 18 years old
  • Have a valid phone number and email address
  • Have a checking account
  • Receive income through a steady job for a minimum of 90 days or be on Social Security
  • Have a monthly income of $1,000 after taxes
  • Provide proof of citizenship or residency

Although these requirements are not strict in comparison to the guidelines laid out by many other lenders, you may still not be approved for a loan.

Because BadCreditLoans.com only offers personal loans to those with very low credit scores, the maximum loan amount is much lower -- usually less than $5,000. The repayment terms are also much shorter and have much higher interest rates, which can be risky for your financial health.

Read our 2019 BadCreditLoans.com review.

4. GuideToLenders

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  • Minimum Credit Score: No minimum credit score
  • APR: 4.99% to 35.99%
  • Loan Range: $500 to $40,000
  • Term Length: 24 to 84 months

The 100% free GuideToLenders service specializes in providing consumers across the entire credit spectrum with the best loan options -- including loans for bad credit. Guide To Lenders allows consumers to compare loan offers from top lenders like LendingClub, Avant, SoFi, and Marcus by Goldman Sachs.

Customers have compared over $1 billion in loan options on the Guide To Lenders platform to date, making it one of the most popular online solutions for easily comparing loan rates.

Read our 2019 GuideToLenders review.

5. LoansUnder36

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  • Minimum Credit Score: No minimum credit score
  • APR: 5.99% to 35.99%
  • Loan Range: $500 to $35,000
  • Term Length: 2 to 72 months

LoansUnder36 connects borrowers with a network of 100+ reputable lenders that can serve customers with any credit score. As the company's name suggests, all online lenders offer loans with interest rates under 36%.

With a quick and 100% free LoansUnder36 application, you can compare multiple loan offers.

Read our 2019 LoansUnder36 review.

6. PersonalLoans.com

  • Minimum Credit Score: No minimum credit score
  • APR: 5.99% to 35.99%
  • Loan Range: $1,000 to $35,000
  • Term Length: 90 days to 6 years

PersonalLoans.com matches you with vetted lenders from a marketplace once you have submitted your simple and short online application. You can receive your funds quickly and through direct deposit as soon as the next business day.

To apply for personal loans through PersonalLoans.com, you must meet the following requirements:

  • Be at least 18 years of age
  • Have a valid social security number
  • Receive a steady monthly income
  • Have a valid a checking account
  • You cannot have a bankruptcy, recent charge-off, recurring late payments, or an account with late payments over 60 days

There are three types of lenders at PersonalLoans.com: P2P lenders (who require a minimum credit score of 600 and $2,000/month in income), installment lenders (who require a minimum credit score of 580), and bank lenders (who require a minimum score of 580 and $3,000/month in income).

Read our 2019 PersonalLoans.com review.

7. EVEN Financial

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  • Minimum Credit Score: No minimum credit score
  • APR: 4.99% to 35.99%
  • Loan Range: $1,000 to $100,000
  • Term Length: 24 to 84 months

EVEN Financial specializes in providing personal loans for all credit types, including bad credit loans.

Their website provides a quick, free, and secure application that matches you to multiple trusted lending partners.

Read our 2019 EVEN Financial review.

8. NetCredit

  • Minimum Credit Score: 550
  • APR: 36% to 155%
  • Loan Range: $1,000 to $10,000
  • Term Length: N/A

To apply for NetCredit, you must fill out a form online. If you qualify, you can choose to accept the loan terms, amount, and monthly payment or you can modify them by using the loan amount slider.

NetCredit reports your payments to two of the three major credit bureaus (Experian and TransUnion) through their Built-In Credit Builder program, giving you the opportunity to improve your credit score while paying back your loan.

NetCredit has high interest rates, so you may want to consider using a secured loan or getting a cosigner to avoid the headache of paying back high-interest rates on these types of loans.

NetCredit offers its services in Alabama, Arkansas, Arizona, California, Washington, DC, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, North Dakota, New Mexico, Ohio, Oregon, South Carolina, South Dakota, Texas, Utah, Virginia, Washington, and Wisconsin.

9. Avant

  • Minimum Credit Score: 580 to 700
  • APR: 9.95% to 36%
  • Loan Range: $1,000 to $35,000
  • Term Length: 2 or 5 years
  • Origination Fee: 1.5% to 4.75%

Avant has assisted over 600,000 customers with both good and bad credit by providing personal loans through a lending platform, which allows you to receive your funds as soon as the following business day.

Benefits of signing up with Avant include monthly updates on your VantageScore and receiving an app called ReadyForZero that helps you deal with debt.

Loan amounts, interest rates, and terms depend on the borrower and state.

Currently, Avant is available in 47 states and the District of Columbia.

10. LendingPoint

  • Minimum Credit Score: 600
  • APR: 17.46% to 35.99%
  • Origination Fee: 5%
  • Loan Range: $3,500 to $20,000

LendingPoint offers lending services for those with poor and fair credit. In order to qualify, you must meet the following requirements:

  • Earn a minimal gross annual income of $25,000
  • Have a debt-to-income ratio that is not higher than 45%
  • Be a resident of the following states: Alabama, California, Colorado, Delaware, Georgia, Michigan, Missouri, Montana, New Jersey, New Mexico, North Dakota, Ohio, Oregon, South Dakota, Texas, Utah, and Washington
  • Provide proof of employment and income, which includes recent bank statements, a driver’s license, and a voided check.

Their application process is quick and simple. If you are approved, you are given different loan options to choose from.

With some loans, you can receive your funds as soon as the next business day.

11. OneMain

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  • Minimum Credit Score: 550
  • APR: 25.10% to 36%
  • Origination Fee: $25 to $40
  • Loan Range: $1,500 to $25,000
  • Term Length: N/A

OneMain offers its services to those with bad credit.

In order to qualify with a low credit score, you will probably need some kind of collateral to take out a secured loan. You will have to undergo an appraisal to make sure it matches your loan amount, and the vehicle must be insured during the loan process. There are some cases in which you may also be able to take out an unsecured loan.

Depending on your state of residence, your repayment terms and fees differ.

To receive your funds, you must meet a loan official in person at one of OneMain’s physical branches to verify your identity and talk about loan options. Finding a location near you should not be difficult; there are over 1,800 branches in multiple states.

Once you’ve acquired the loan, you pay a monthly fee either online, through the mail, with the OneMain app, a OneMain branch, or at a Walmart Service Desk. However, there is a small added fee if you pay by debit card or at Walmart.

Read our 2019 OneMain review.

What Are Some Other Types Of Loans I Can Take Out With Bad Credit?

There may be times when a personal loan may not be your best option and you may need something a little more suited to your needs. If you are in need of the following and you are struggling with bad credit, here are our top suggestions:

Best Installment Loan For Bad Credit: OppLoans

An installment loan is a type of personal loan that is repaid with scheduled payments over a specific time period.

As we mentioned earlier, OppLoans provides short-term installment loans with quick approval and direct deposit.

Best Home Equity Loan For Bad Credit: EasyKnock

EasyKnock is a unique residential sale-leaseback program for homeowners. It allows them to release a portion of their home equity without having to move. EasyKnock purchases the home and allows homeowners to continue living in it while still giving them the ability to repurchase the home or move at any point.

EasyKnock is a great alternative for homeowners who have bad credit and have been denied when applying for a home equity loan or HELOC (home equity line of credit).

EasyKnock doesn’t require a minimum credit score or traditional income for you to qualify, but their sell and stay program works best for individuals with loan-to-values of 50% or less.

Best Auto Loan For Bad Credit: Auto Credit Express

Auto loans are specified loans for borrowers with bad credit who are looking for a loan. These loans have the possibility of lower interest rates and better terms since your vehicle can be used as collateral. However, make sure that you know where your credit stands before you go in for a loan and that lenders aren't asking you to pay high interest rates or sign on for a loan term over five years.

Auto Credit Express is a BBB Accredited service with numerous positive reviews. They can provide auto loans for borrowers with good credit, bad credit, and even no credit.

Best Payday Loan For Bad Credit: Money Mutual

Payday loans offer small amounts of cash -- generally $500 or less -- and are repaid by your next payday. As long as you can provide proof of income, a check for the loan amount and interest, and/or you give the lender access to your checking account, you should be able to qualify.

While most payday loans are very often predatory in nature, many states have capped their interest rates and thankfully, there are now lenders that provide reasonable loan terms and rates for borrowers in need.

MoneyMutual can provide funds of up to $2,500 as soon as the next day. All you need to do is fill out a quick, simple, and secure form that only takes a few minutes to complete in order to have your funds directly deposited into your account.

What is a bad credit personal loan?

A bad credit loan is a specific kind of personal loan for borrowers with poor, bad, or no credit. These types of loans usually come with lower amounts, and higher interest rates; borrowers may even have to put up collateral in case they default.

What credit score is considered bad?

The majority of lenders use your FICO® score to determine whether you are a reliable or risky borrower. Your FICO® score is considered poor if it falls under 620.

How do I get a loan with bad credit?

There are many lenders and lending networks that offer loans for borrowers with bad credit. Unfortunately, most of these personal loans will come with high interest rates. Some lenders may give you a bad credit personal loan if you put up collateral.

How do I qualify for a personal loan with bad credit?

There are several base requirements you must meet to apply for a personal loan:

  • You must be at least 18 years of age.
  • You must meet your lender's minimum credit score requirement: The majority of "bad" credit scores lie in the 300 to 620 range. However, many lenders have no minimum credit score requirement.
  • You must have a steady stream of income: A regular source of income will greatly increase your chances of approval.
  • You must have a valid checking account.

Is there a way to get better rates on loans with bad credit?

If you have very bad credit and you can't deal with high interest rates, you can consider a secured loan.

Unlike unsecured loans (which do not have collateral tied to them and are therefore seen as riskier by lenders), this type of loan is secured by collateral such as your home, vehicle, or savings.

While a secured loan can help you receive lower rates, better terms, and higher amounts, you should be absolutely sure that you can repay your loan so you don't lose your property.

You can also consider asking a trusted family member or friend to cosign a loan with you. While this can help you receive more favorable rates, it can be a risky move for your cosigner. If you default on your loan or miss any payments, their credit -- and your relationship -- will be put at risk.

What are the different types of bad credit loans?

When you're searching for personal loans, you will find several different types of loans:

  • Cash advances: These loans are given to consumers with bad credit and allow them to withdraw money from an ATM or bank.
  • Credit builder loans: These loans help you improve your credit by taking out a small, low-interest loan from your bank or credit union and repaying it over a period of a few months.
  • Installment loans: These unsecured loans require you to make equal (usually monthly) payments over the life of the loan.
  • Payday loans: Payday loans are short-term loans in which the borrower has to pay the original loan amount plus a fee by their next pay date. These loans generally have much higher interest rates than installment loans. Since these loans need to be repaid in one lump payment, the maximum loan amount you can take out is much lower than that of other types of loans and can range from $100 to $1,000.

What are the benefits of online loans?

Any loan for consumers with bad credit carries high interest rates, but there are some unexpected benefits to taking out these personal loans:

  • You can receive your funds quickly -- sometimes in as little as one business day.
  • You will have fixed rates, so you don’t have to worry about the rates changing over time.
  • Most of the loans are unsecured, so you don’t have to provide any collateral.
  • Personal loans allow you to use them for any purpose, including paying off your debt or using it for car repairs and home renovations.
  • You don’t receive any prepayment penalties for paying off your loan early, which also helps reduce your interest in the long run.
  • If you take out a credit builder loan, you can use that to improve your credit score by making on-time payments.

What are some signs of a reputable lender?

It's easy for borrowers to fall victim to a scam, especially when their options are limited by having bad credit and lenders try to take advantage of their situation. Before you take out a loan, keep an eye out for the following in order to find a reputable lender:

  • Check their basic information and reputation: Be sure to check the lender’s physical address, their BBB profile, and read through online reviews from sites like Trustpilot for real customer feedback. In general, the longer a company has been in business, the better.
  • Online transparency: Reputable lenders will list out fees, APR ranges, and additional terms.
  • Compliance with state regulations: Check to see if they are registered in your state by contacting the state’s financial regulatory bureau.
  • Credit bureau reporting: You can also check to see if a lender reports to the three major bureaus (Experian, Equifax, and TransUnion).
  • Reasonable fees and interest rates: While you're probably not going to get low interest rates with bad credit, a good lender will not charge exorbitant fees (for late payments, prepayments, unsuccessful payments, or origination) and they will keep their interest rates competitive.
  • Higher loan amounts: While most lenders will only offer loans up to $1,000 if you have bad credit, some of the top lenders in the industry will allow for larger loans if you are in need of it.
  • Flexible loan terms: A good lender will allow you to have flexible terms. For example, if you want to pay off a loan quickly and save on interest, they will not force you to have a long loan term.

How can I spot bad credit loans online?

If you have bad credit, finding a loan is already difficult since you have to deal with high interest rates, unfavorable terms, and rejection from lenders. You should shop around before accepting the first offer you receive from lenders. To avoid scammers who try to take advantage of your situation, be on the lookout for red flags:

  • Application fees and upfront fees: It is unlawful for lenders to charge a fee for simply filling out an application.
  • Receiving unwanted solicitation: You should be the one to initiate contact with a lender rather than the other way around. Receiving constant phone calls and snail mail is a warning sign.
  • Guarantees: No lender can promise you a loan without first looking at your credit score, income, and other important personal information.
  • Pressure from lenders: You shouldn’t feel pressured into taking out a loan if you are not happy with your potential loan terms and lenders shouldn't push you to give out your personal information (especially if it's over the phone) or take out a loan.
  • Questionable company names: Double check the lender’s name and physical address to make sure they are not trying to use a name that is similar to a reputable lender.

Should I apply for multiple loans to find the best rates?

No. You should avoid applying for multiple loans in the same time period since this can lower your credit score and lenders see this as a bad sign in a prospective borrower.

What if the interest rates are too high for me?

Although it is difficult to take out a personal loan with bad credit, there are lenders who cater to your specific situation. However, you may be required to put up your savings or a car as collateral to qualify for a secured loan.

What can I do about bad credit so I can get a better loan?

Bad credit affects many aspects of your life, but when it comes to personal loans, your credit score plays an important role in determining your interest rate.

While you can take out a personal loan with bad credit, we think that you should also have the opportunity to improve your financial situation so you can qualify for better rates in the future.

Finding a loan with reasonable interest rates can be difficult. The lower your credit score, the higher your interest rate; in many cases, taking out a personal loan might not even be worth it in the long run due to the large amount of interest you pay. Even raising your credit score by a few points can make a world of difference in the rates and terms you receive.

If you don't know where your credit stands, you can check it through a credit monitoring service or one of the three bureaus.

You can also use services like Credit Karma for a credit score estimate through a soft pull, which does not affect your score; however, your exact credit score may be a few points higher or lower. Checking your score is completely free and should only take a few minutes.

If you want to improve your credit score, there are a few steps you can take:

  • Check your credit reports for inaccurate or unverifiable items: If you find any, you can dispute it on your own or by using a reputable credit repair service. You can obtain a free copy of your credit report once a year at AnnualCreditReport.com to look for any incorrect items or discrepancies.
  • Use a credit-building tool: You can use a credit-building loan like Self Lender or a secured credit card to improve your credit score by borrowing a small amount and paying it back on time.
  • Pay your bills on time: This one sounds obvious, but even one late payment can drastically impact your credit.
  • Keep your credit utilization low: You want to avoid high credit utilization (your outstanding balance versus your total credit limit). Aim to keep your credit utilization below 30%.
  • Keep your accounts open: Even if you have credit accounts that you don’t use, this can help improve your score since it shows that you have a long credit history.