The Best Personal Loans For Bad Credit
Updated February 15, 2018
What Loans Do I Qualify For If I Have a Bad Credit Score?
A personal loan is a tool you can use for certain situations, like paying for home maintenance, personal emergencies, education related expenses, or even paying off high-interest debt.
Although a bad credit score varies from lender to lender, most FICO scores that are considered bad fall under 580. The breakdown of low credit scores is the following:
Low credit: 580 - 619 Poor credit: 500 - 579 Bad credit: 300 - 499
Finding a loan with good interest rates is difficult -- if not impossible -- with a low score and there is a chance you may not even qualify for a one. The lower your credit score is, the higher your interest rate will be. Sometimes these rates can be as high as 20%. In many cases, taking out a personal loan might not even be worth it in the long run.
It may be difficult to a loan, but there are online networks to connect you with lenders who cater to your specific situation. You should not resort to predatory payday or title loans, which can put you into more debt. Some secured loans may even require you to put up your savings or a car as collateral in order to qualify.
In order to not fall victim to any scams, find a lender with online transparency that lists out the fees, APR range, and additional terms. The website should also start with “https” rather than “http” (the “s” means the website is secure). You can also check to see if a lender reports to the three major bureaus (Experian, Equifax, and TransUnion) and is registered in your state by contacting the state’s financial regulatory bureau.
Additionally, if a lender asks to pay upfront fees, this is a red flag. What you end up paying should only be your monthly bill, since origination fees are deducted from the loan itself.
If you have low, poor, or bad credit, here are some options:
Minimum Credit Score: No minimum credit score APR: Depends on the lender Loan Range: $500 - $5,000 Term Length: 3 months to 5 years
BadCreditLoans.com does not directly lend you money, but instead sends your information to a network of lenders who then contact you with loan offers.
To apply, you must be at least 18 years old, have a valid phone number, email address, and checking account, have income through a steady job for at least 90 days (or be on Social Security), have a monthly income of $1,000 after taxes, and provide proof of citizenship or residency. Although these requirements are not strict in comparison to the guidelines laid out by many other lenders in the market, you may still not be approved for a loan.
If you do receive loan offers, you can look through each offer and review the terms. Because BadCreditLoans.com only provides services to those with very low credit scores, the loan amount is usually less than $5,000. The repayment terms are also much shorter and have higher APRs, which is incredibly risky for your financial health. Make sure you review each loan offer carefully and be wary of the interest rates if you choose to accept one.
Minimum Credit Score: N/A APR: 5.99% to 35.99% Loan Range: $500 - $35,000 Term Length: 6 months to 6 years
Like BadCreditLoans.com, PersonalLoans.com matches you with lenders from a marketplace once you have submitted your application.
There are three types of lenders: 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).
Applicants must be at least 18 years old and have a social security number, a steady monthly income, and a checking account. You cannot have a bankruptcy, recent charge-off, recurring late payments, or an account with late payments over 60 days.
Minimum Credit Score: 550 APR: 36% - 155% Loan Range: $1,000 - $10,000 Term Length: N/A
NetCredit has you to fill out an online form to check if you qualify. If you do, you can choose to accept the loan terms, amount, and monthly payment or 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.
There are no fees aside from your interest rates. However, NetCredit has high interest rates, so be sure to weigh the pros and cons of taking out a loan before you make the decision. 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.
Minimum Credit Score: 580 - 700 APR: 9.95% - 36% Loan Range: $1,000 - $35,000 Term Length: 2 or 5 years
Avant has assisted over 600,000 customers. They cater to individuals with good or bad credit, but those with credit on the low end have to pay higher interest. Instead of providing P2P lending, they provide loans through a lending platform, which allow you to receive your funds as soon as the following business day.
Perks to signing up for Avant include monthly updates on your VantageScore and receiving an app that helps you deal with debt, called ReadyforZero. Many customers who pay off their loan successfully through debt consolidation usually see increases in their credit score (around 12 points in half a year).
If you accept the loan terms, there is an origination fee of 1.5% - 4.75%. The loan amount, APR, and loan term depends on the borrower and state. Currently, Avant is available in 47 states and the District of Columbia.
Minimum Credit Score: 600 APR: 17.46% and 35.99% Loan Range: $3,500 - $20,000 Term Length: N/A
LendingPoint provides services for those with poor and fair credit. In order to qualify, you must earn a minimal gross annual income of $25,000, have a debt-to-income ratio that is not higher than 45%, and live in 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.
Applicants need to provide basic information like proof of employment, income, recent bank statements, a driver’s license, and a voided check. The process should be quick, and 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.
In addition to your interest rates, those who take out a loan pay a flat origination fee of 5%.
Minimum Credit Score: 550 APR: 25.10% - 36% Loan Range: $1,500 - $25,000 Term Length: N/A
OneMain offers its services to those with bad credit. In order to qualify when you have a low credit score, you will probably need to take out a secured loan, using a vehicle as collateral. 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. In some cases, you may also be able to take out an unsecured loan.
You will pay a different amount depending on which state you live in, and each loan has an origination fee from $25 to $40. These fees are higher if you take out a smaller loan.
In order to receive the funds, you must meet an 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 be likely, since there are over 1,800 branches in multiple states.
Once you’ve acquired the loan, you will pay a monthly fee, either online, through mail, with the OneMain app, a OneMain branch, or at a Walmart Service Desk. However, there is a small fee if you pay with debit card or at Walmart.
For a more detailed review on OneMain, click here.
Minimum Credit Score: 600, although the average borrower has a score of 665 APR: 7.12% - 29.99% Loan Range: $1,000 - $25,000 Term Length: N/A
Peerform is a peer-to-peer (P2P) lender available in 37 states. P2P lending allows applicants to receive their funding by matching them with borrowers. After they fill out a form and receive their loan terms, the loan is listed for investors to decide if they are willing to fund the loan. This means it may take longer to receive the funds -- sometimes up to two weeks.
There is also always a small chance that investors will not completely fund your loan. Instead of solely relying on FICO scores, Peerform has its own algorithm to help make loan offers, which includes potential risk and credit history.
Peerform is helpful for those who do not have a lengthy credit history, since applicants need at least one year of credit history. Although there is no minimum income, you should have less than a 40% debt to income ratio.
If you accept a loan term, there is an origination fee which runs up to 5% of your loan.
Unfortunately, Peerform is only available in 37 states.
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