A personal loan for bad credit offers options to borrowers with low credit scores. The most popular of these loans are unsecured, which don't require any collateral, although some lenders may offer secured loans.
Bad credit is typically defined as a FICO credit score below 580, on a scale of 300 to 850, based on information in credit reports from the three major credit bureaus: Experian, TransUnion, and Equifax. Some factors that have a positive impact on your credit score include paying your bills on time, having a lower debt-to-income ratio, and establishing a longer credit history.
When choosing a lender, you should look at several factors beyond the credit score requirement. The best lenders have transparent pricing, including interest rates and fees, quick funding and approval times, a variety of repayment terms, and loans that can be used for a variety of purposes.
Best Bad Credit Loans of December 2022
Best Overall : Upgrade
- APR Range: 7.46% - 35.97%
- Time To Receive Loan: 1 Days
- Loan Amount: $1,000 - $50,000
Upgrade allows you to borrow as little as $1,000 with a credit score as low as 550, and you may get a lower rate if you’re approved with a co-applicant. The online application process is easy, and you can pre-qualify without hurting your credit.
Low minimum credit score requirement
Maximum repayment terms are relatively long
Available across the U.S.
Origination fee of 2.9%–8%
Lowest APR requires excellent credit, autopay, and direct payments on existing debt
No refinance option
Upgrade is our top pick thanks to a set of features that make it easily accessible for borrowers with poor credit including a low minimum credit score requirement, a $1,000 minimum loan amount and full disbursement in as little as one business day. It also has wide availability, with loans available to borrowers across the US.
You can quickly check your pre-qualification status to see if you meet certain minimum borrowing requirements (but pre-qualification doesn’t guarantee approval). Upgrade allows you to apply with a co-applicant if you need help qualifying or want a better rate. You may also be offered a secured loan, which requires collateral, along with or instead of an unsecured loan.
Repayment terms can range from 24 to 84 months. Interest rates start quite low, ranging from 7.46% to 35.97%. To get the lowest rates possible, you’ll need to sign up for autopay and must pay off at least a portion of your debt directly. You can also get a 20% rate reduction by opening an Upgrade reward checking account.
Loans will be charged an origination fee of 2.9% to 8.0%, which will be deducted from your loan proceeds. Late payment fees will cost up to $10, and failed electronic/check payments will be charged $10.
You can apply for a loan through Upgrade’s website or mobile app.
And unlike many lenders, Upgrade has great customer ratings, with many reviewers complimenting Upgrade’s simple application process and intuitive website.
Read our full Upgrade personal loans review.
Upgrade is a good first choice for any borrower. It's worth considering even if you have poor credit, as it accepts applicants with low scores and you can apply with a co-signer.
Best for Fast Loans : Rocket Loans
- APR Range: 8.42% - 29.99%
- Time To Receive Loan: 1 Days
- Loan Amount: $2,000 - $45,000
If you need a loan fast, Rocket Loans can provide up to $45,000 as soon as the same day you apply. But the time it takes to receive your funds will depend on your bank and Rocket Loans’ ability to verify your information.
Minimum credit score of 580
Same-day funding for eligible borrowers
Loan range from $2,000-$45,000
Origination fee of 1%–6%
Terms of only 36 or 60 months
Doesn’t allow joint applications or co-signers
Rocket Loans is one of the few companies to provide funding the same day you’re approved for a loan. But not every borrower will get the money that fast—Rocket Loans has to validate your identity and bank details electronically, and your bank has to process the deposit. It would be best to assume it could take a few business days, but if you’re lucky, you could get your loan proceeds in record time. APRs range from 8.416% to 29.99%.
Rocket Loans provides loans for debt consolidation, home improvement, auto services, and “Other.” The “Other” category could be just about anything besides college tuition and illegal activities. Interest rates run on the low end, but if you have bad credit you’ll likely pay a higher interest rate, which is common. Term lengths are a bit unusual, as you’ll get 36 or 60 months to pay off your loan. But there’s no prepayment penalty to stop you from paying it off early.
Like many loan providers, Rocket Loans offers an interest rate discount if you set up autopay. But other than that, there aren’t many valuable features common with some other companies. You can’t apply with a co-signer to get a lower rate, you can’t change your due date, and Rocket Loans won’t send funds directly to creditors if you get a debt consolidation loan.
You’ll pay an origination fee of 1% to 6% of the loan amount, which will be deducted from the proceeds. There’s a $15 fee for late payments, but there’s a bit of cushion: You can take up to 10 calendar days after your due date to pay without being counted late. Failed ACH and check payments will also be charged $15.
Rocket Loans’ personal loans are currently available in 47 states, excluding Nevada, Iowa, and West Virginia. You can check your pre-qualification status and apply online.
Read our full Rocket Loans personal loans review.
If you need same-day funding, Rocket Loans is the right lender to consider. Not every borrower will receive same-day funding after their loan is approved, but your money will likely arrive in a few business days.
Rocket is also unique in that it offers a 10-day grace period before your payment is considered late. This way, you'll avoid late fees.
Best for Debt Consolidation : Avant
- APR Range: 9.95% - 35.95%
- Time To Receive Loan: 1 Days
- Loan Amount: $2,000 - $35,000
If you’re struggling to pay down multiple debts, Avant can help by consolidating them into a single monthly payment.
Low credit score requirement of 580
Next-day funding is available
Maximum loan amount is only $35,000
Relatively high APR range of 9.95%–35.95%
One-time administration fee of up to 4.75%
Avant offers quick debt consolidation loans as soon as the day after you’re approved. If your credit score has improved since you’ve taken on the original debt, you may be able to consolidate with Avant at a lower APR. This could help you save hundreds of dollars over the course of the loan, depending on the amount of debt and your rates. You can easily apply online.
Terms are fairly standard, although the maximum loan amount is a bit on the low side. You can borrow $2,000 to $35,000, but minimum loan amounts may vary by state. And you can choose a repayment term ranging from 12 to 60 months. Unlike many lenders, Avant allows qualified borrowers to refinance their unsecured loans, potentially with lower APRs and longer repayment terms. You can even refinance a refinanced loan, but after that, no more refinancing is permitted.
While some lenders provide an autopay discount, Avant is not among them. It doesn’t allow co-signers or joint applications, either. But you can check your pre-qualification status without hurting your credit. Avant does business throughout most of the U.S., except Hawaii, New York, Vermont, and West Virginia.
You may pay an administration fee of up to 4.75% of the loan amount, although some borrowers won’t have to pay this fee at all. Late payments will be charged $25, which is a bit above average, and returned payments will be subject to a fee as well.
Read our full Avant personal loans review.
Avant is a solid choice for borrowers who have been cleaning up their credit score.
Let's say you borrowed money a while ago, and your score has improved. You may be able to consolidate with Avant at a lower APR and save money. Or, if you're struggling with multiple payments each month, consolidating can help (even if you don't get a lower rate) by reducing them to a single bill.
Best for Military Members : Navy Federal Credit Union
- APR Range: 7.49% - 18.00%
- Time To Receive Loan: 1 Days
- Loan Amount: $250 - $50,000
Navy Federal membership is limited to eligible members of the military and their families, but if qualified you can take advantage of excellent loan terms, quick funding, and high-quality customer service.
No origination or administrative fee
Same-day funding available
Home improvement loans with terms up to 180 months
NFCU membership required
No pre-qualification tool
No autopay discount
Navy Federal is our pick for best credit union thanks to its affordable loans, which have no origination fees and can be disbursed with little delay—as soon as the same day, for qualified borrowers. But NFCU membership is only available to current and retired members of the armed forces, Department of Defense personnel, and their eligible family members. Members get a variety of perks, including low rates, no fees, and bonuses on financial products.
NFCU loans are available in all 50 states and Washington, D.C. You can apply online or by speaking with a customer support agent, but there’s no published minimum credit score requirement or pre-qualification tool to help you decide if NFCU is right for you. There are no discounts for signing up online, setting up autopay, or anything else, but you can apply with a joint applicant or co-signer if your credit isn’t quite up to par or you want a lower rate.
As a credit union, Navy Federal is limited to charging a maximum APR of 18.00% for most loans. It has different terms for different unsecured loan types: personal loans, debt consolidation loans, and home improvement loans. For each type, loans of up to 36 months have a certain APR range; loans of 37–60 months have a higher APR range; and loans of 61–180 months, which are only available for home improvement, have a still higher range.
NFCU allows you to borrow an exceptionally low amount, with loans ranging from $250 to $50,000. Home improvement loans have a minimum amount of $25,000 for terms of 61 to 84 months, and $30,000 for 85 to 180 months.
Late and returned payments will be charged $29 each. Customers using loans to pay for a car can enroll in Guaranteed Asset Protection (GAP) for $399, which can be useful if you total a car and the insurance company won’t cover the full value of your vehicle.
Read our full NFCU personal loans review.
Military members and their families can get excellent rates with Navy Federal Credit Union. You must be a current or retired member of the armed forces, Department of Defense personnel, or an eligible family member to qualify. But if you meet those requirements, the perks are worthwhile.
Best for Low Fees : LendingPoint
- APR Range: 7.99% - 35.99%
- Time To Receive Loan: 1 Days
- Loan Amount: $2,000 - $35,600
LendingPoint charges a relatively low origination fee of 3.5% on average, and borrowers benefit from very few fees and no prepayment penalties.
Low credit score requirement (580)
Funding in as soon as one day
Offers a pre-qualification option
Average fixed APR (21.99%) is relatively high
Does not allow co-signers or co-borrowers
We chose LendingPoint as our top lender in this category because it has relatively low origination fees and no prepayment penalties. Eligible borrowers credit scores as low as 580 may also qualify for personal loans from LendingPoint.
LendingPoint offers loans from $2,000 to $36,500 with APRs ranging from 7.99% to 35.99% and repayment terms of 24 to 72 months. As is typical, the lowest APRs are offered to borrowers with excellent credit. LendingPoint loans are available in 48 states, excluding Nevada and West Virginia, and can be used for several purposes including debt consolidation, home improvement costs, medical expenses, and other large purchases.
This lender also offers other benefits to borrowers, including allowing eligible borrowers to refinance their loans to access a longer term or a lower interest rate.
While LendingPoint does offer some unique benefits, it does not allow co-borrowers or co-signers, so borrowers will need to qualify for a loan based on their own creditworthiness. LendingPoint also doesn’t offer the option to send loan funds directly to creditors, which many other lenders do offer.
Read our full LendingPoint personal loans review.
LendingPoint is a good choice for borrowers who want a low origination fee. Like most lenders, it doesn't charge a prepayment penalty.
APRs range from 7.99% to 35.99%, but the lower rates are typically for borrowers with excellent credit. Eligible borrowers may also refinance loans to access longer terms or lower rates.
Best for Very Low Credit : Upstart
- APR Range: 6.50% - 35.99%
- Time To Receive Loan: 1 Days
- Loan Amount: $1,000 - $50,000
Unlike some lenders that require higher credit scores to get approved for a personal loan, Upstart works with eligible borrowers who have credit scores as low as 300.
Funding in as little as one day
Lower credit score requirement (300) than many competitors
No pre-qualification option
High average origination fee
Upstart has one of the lowest credit score requirements among lenders on our list. While its credit score requirement and minimum APR of 6.50% are low, its maximum APR of 35.99% is fairly high, and it also charges a high average origination fee of 5%.
Still, Upstart could be a good option for borrowers with poor credit who are seeking fast funding. Like many other lenders, Upstart lets you check your rate without impacting your credit score. It also offers a relatively fast funding time; borrowers may receive their loan proceeds as soon as one business day. Upstart personal loans can be used for many purposes including debt consolidation, home improvements, medical costs, and other large expenses.
Upstart also offers a wide range of loan amounts, ranging from $1,000 to $50,000. However, loan amounts can vary greatly depending on where you live.
Borrowers in Iowa and West Virginia aren’t eligible for loans from Upstart, and you cannot apply with a co-signer, so you’ll need to qualify based on your own creditworthiness.
Read our full Upstart personal loans review.
Upstart has the lowest credit score requirement among the lenders we reviewed, making it a great choice for those with credit scores as low as 300.
The lender's maximum APR is 35.99%, and while this is fairly high, borrowers with very low credit scores must often pay more for personal loans of this type.
Compare the Best Bad Credit Loans of December 2022*APR ranges for some companies include a discount for automatic payments or existing bank customers.
If you have poor credit, your loan options are relatively limited. But that doesn’t mean you have to settle for an expensive or unreliable lender. We selected Upgrade as the best overall personal lender for bad credit because people with lower credit scores can get approved for a loan as small as $1,000, and can receive the funds as soon as the next day.
Upgrade has great availability across the country, and its current APR range of 7.46% to 35.97% is competitive. You may get a rate at the lower end of the range if you’re approved with a co-applicant who has excellent credit, you enroll in auto-pay, and you use proceeds to directly repay existing debt. These are best-in-class features that can help cut down the cost of your loan.
Guide for Choosing the Best Personal Loans for Bad Credit
What Are Loans for Bad Credit?
Bad credit loans are loans for individuals with low credit scores, usually 579 or less. Although there are many types, the most common are unsecured personal loans. There’s no collateral, you’ll have a fixed interest rate and fixed monthly payments and, like other loans, these will show up on your credit reports and affect your credit score.
Unsecured personal loans for bad credit are just like any other unsecured personal loan, but they typically come with more fees and higher APRs than loans extended to people with better credit.
Do You Qualify for a Personal Loan for Bad Credit?
To qualify for a personal loan with bad credit, you’ll likely need to meet certain criteria. Some of the most important factors are:
- Your current credit history shows your problems are resolved: Lenders are more willing to overlook a bad credit score if your current credit history shows you’ve fixed the problems. This usually means that you don’t have any currently delinquent debt, any judgments are paid (e.g., tax liens), and bankruptcies are resolved. The goal is to ensure your old issues won’t prohibit you from repaying the new loan.
- You have enough income to comfortably repay the debt: Before you can get a new loan, most lenders will want to make sure you have enough income to repay it. They’ll determine this by looking at your debt-to-income ratio. It’s also a good idea to review your budget to see if you can comfortably make the monthly payment before you proceed.
- Loan funds will help improve your overall financial situation: The other thing that lenders consider is whether the loan may help improve your credit. For example, getting a loan to consolidate existing debt into a single fixed-rate loan with a lower interest rate could improve your credit and help you pay off your balance quicker. Plus, you’ll save money on interest charges.
Comparing Personal Loan Lenders for Bad Credit
When shopping for a personal loan for bad credit, these are the most important things to consider when comparing lenders:
- APR range: Loans come at a cost, which includes the interest rate and any fees, like origination fees. The yearly cost of a loan is reflected in its APR, or annual percentage rate. This means it’s typically more important to evaluate the APR than the interest rate or origination fee when comparing personal loan lenders.
- Loan amounts: Make sure the lender you choose offers a loan amount that’s big or small enough for your needs. Some lenders only offer loans of $5,000 or more, which could be a problem if you only need $500. In contrast, if you have a lot of debt to consolidate, you may need a lender that offers bigger loans.
- Repayment term length: In addition to the APR, the next biggest factor affecting the size of your loan payment is the repayment term. You’ll have the lowest overall borrowing costs if you choose the shortest possible repayment term since you’ll pay less interest over the life of the loan. However, this results in a larger monthly payment. Be sure to select a lender offering a repayment term that works with your budget and needs.
- Ease of application: Many lenders offer online applications that take mere minutes to complete, and let you know if you pre-qualify without hurting your credit.
- Funding speed: If you want to get your money fast, look for a lender with next-day funding (some even offer same-day funding). But take note that funding times aren’t guaranteed, and will depend in part on your own bank.
- Lender’s reputation: Make sure the lender you choose has a good reputation. Check consumer review sites for customer feedback, and look at government sources like the Consumer Financial Protection Bureau’s Consumer Complaint Database. Doing your due diligence will help you choose a reputable lender.
Applying for a Personal Loan with Bad Credit
Applying for a personal loan with bad credit is similar to what’s required for any other type of loan, and it's a fairly simple process. You'll need to fill out an application, review the loan offers, accept the terms, and receive funding. You might need to set up an online account, depending on the lender you choose.
You might be required to provide documentation such as a driver's license or other government-issued ID or proof of address or financial details such as your income or monthly housing payment. Most lenders will perform a soft credit check, which doesn't affect your credit score, to see if you prequalify for a loan. Once all of that is complete and your application is approved, you'll receive the terms and conditions of the loan.
Make sure you review those carefully so you know exactly what's required, including monthly payments, what the loan can and can't be used for, and your interest rate.
Frequently Asked Questions
Is It Easy to Get a Personal Loan with Bad Credit?
Getting a loan with bad credit tends to be harder than getting a loan with excellent credit, but there are still many lenders offering bad credit loans. Even if you have bad credit, it could be relatively easy to get a personal loan as long as you can afford the payment and you’re not currently delinquent on your existing debt.
However, if you have active credit issues, like delinquent loans or accounts in collections, you may need to work on getting these problems fixed before you can qualify for a personal loan. There are many places you can go to get help resolving credit issues; credit counseling is a good place to start.
What Are the Types of Loans for Bad Credit?
The most common types of loans and similar products for bad credit include:
- Unsecured loans: Lenders offering unsecured personal loans for bad credit include banks, credit unions, and alternative online lenders. You won’t need to provide any collateral (e.g., your car or home), and the repayment terms are usually two to seven years.
- Secured loans: There are many kinds of secured loans for bad credit, including mortgages, auto loans, home equity loans, and home equity lines of credit. A secured loan is appropriate if you’ll use the money to buy a car or a house, or if you want to repair or improve your home.
- Credit cards: Quite a few banks provide credit cards for bad credit, and some offer features to help you rebuild your credit. Although credit cards are useful and secure payment options, and they can help improve your credit if you use them responsibly, the APR is usually very high. Make sure you do your best to repay the balance as quickly as possible to avoid high borrowing costs.
- Cash advances: Many credit card issuers offer cash advances, and banks and alternative online lenders also sometimes offer short-term cash advance loans. But cash advances are more expensive than secured or unsecured personal loans and often carry very high interest rates, so we recommend avoiding them.
- Payday loans: Although they’re easily available, keep in mind that payday loans come with extremely high interest rates. They’re risky debts that are difficult to repay, and it’s easy to get caught up in a cycle of repeatedly using payday loans. For these reasons, it’s best to avoid payday loans completely and seek another funding option.
What Interest Rate Can I Expect If I Have Bad Credit?
When you have a FICO score under 670, you're considered a subprime borrower. If your FICO score is less than 580, your credit falls into the "Poor" range.
Every lender sets its own criteria (including credit score thresholds) for loan approval and pricing. That makes it difficult to predict precisely what APR you'll be offered for a personal loan if you have bad credit. Interest rates on personal loans can range from roughly 4.99% to 36%. If your credit rating is poor, you’ll probably be offered rates on the higher end of that scale.
Where Can I Get a Personal Loan With Bad Credit?
Getting a personal loan with bad credit can be a challenge. Still, you may find multiple lenders willing to do business with you (albeit at a higher interest rate than if you had good credit). There are two primary loan sources to consider:
- Online personal loans: Online lending networks take your loan application and connect you with lenders who may be willing to approve you for a personal loan. You can often submit one initial form and compare offers from multiple lenders.
- Direct lenders: Direct personal loans come straight from the financial institution where you’re approved. These may include local banks and credit unions, online banks, and online direct lenders. If you have bad credit, it’s generally best to apply only with direct lenders that are willing to do business with credit-challenged borrowers.
- Local lenders. If you use a local bank branch or credit union, you might be able to find a loan officer willing to work with you. Your personal relationship could influence the criteria they use to assess your application, including not factoring in your credit score as heavily. They might also offer you better terms, interest rates, and lower fees even if you have bad credit.
Can I Get a Personal Loan with Guaranteed Approval?
While there are no guarantees you'll get approved for a personal loan, especially if you have bad credit, there are a few steps you can take to increase your odds.
First, pick a lender that's friendlier towards borrowers with bad credit (and if you don't know your credit score, you can check it for free). If your score is low, you can work to improve it before getting a loan, but if you need funding immediately, try to find a co-signer who has good credit. A co-signer is someone who promises to pay back the loan if you can't, and it might make you less of a risk in the eyes of the lender.
And finally, consider applying with multiple lenders. The more lenders you try, the greater chance you have of finding one who'll approve you. Just make sure they do a soft rather than a hard credit check as the latter may decrease your credit score even more.
How We Chose the Best Loans for Bad Credit
Our team evaluated 38 lenders and collected 1,520 data points before selecting our top choices. We weighed more than 20 criteria and gave a higher weight to those with a more significant impact to potential borrowers.
The top picks were selected based on factors like membership requirements (weighted 15%), average fixed APR (weighted 15%), and average origination fees (weighted 10%).
We also took into account the flexibility of repayment terms, helpful features like prequalification, and whether a co-signer or joint applications are permitted to ensure borrowers get the best possible experience. For further information about our selection criteria and process, our complete methodology is available.