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Key takeaways
- Even with bad credit, there are multiple loan options available. Choose the best loan type for your financial situation.
- Improve your odds of securing a loan by adding collateral, finding a co-applicant, and including all your income.
- Always try to prequalify and compare loan offers. Then select a loan with the fewest fees, lowest APR, and flexible repayment terms.
Getting a personal loan when your credit is less-than-ideal is tough. Most lenders want you to have good credit, 670 or more. But don’t give up! There are bad credit loans out there.
These lenders cater to people like you: anyone with a credit score below 580.
Keep in mind that some of these loans do have higher interest rates and fees compared to loans for people with good or excellent credit. So be selective, always compare offers, and only borrow what you really need.
We’ve rounded up the six best places to get a personal loan if your credit score is poor. Take a look and see if there’s one for you.
Jump to:
- Best for No-Interest Loans: Earnin
- Best for Short-Term Loans: Sezzle
- Best for Building Credit: Brigit
- Best Overall for Bad Credit Loans: Upgrade
- Best for Rewards: Explore Credit
- Best to Compare Lenders: MoneyMutual
- What are Bad Credit Loans?
- How to Compare Bad Credit Loans
- Types of Bad Credit Loans
- Pros and Cons of Bad Credit Loans
- Tips to Qualify for a Bad Credit Loan
- Final Thoughts
Best for No-Interest Loans: Earnin
Earnin stands out as a top choice for no-interest loans. It operates on a unique model that allows you to access funds based on the hours you’ve already worked. Basically, you’re getting paid early.
You can take out up to $750 per pay period with no interest and no mandatory fees. The app will automatically deduct the amount you took out from your next paycheck.
Earnin won’t conduct a credit check so you can access this service no matter your credit score. You do need a steady job, a fixed work location, and receive your pay via direct deposit to be eligible.
This is particularly beneficial for anyone who needs immediate access to cash without the burden of interest rates and high fees.
Check out our Earnin review to learn more about how it can help you.
The Best
“Guys, the best app you’ll ever download. No credit check, no fines unless you refuse to pay back, and decent amount per withdrawal window. They dive into your financial journey trusting you, and only you can damage that trust. Many apps like this expect the user to demonstrate trustworthiness first, this company gives people the benefit of the doubt. Withdrawals are based off income per month, and they are very decent amounts. They’ve helped me TREMENDOUSLY! The small tip is well worth it.” Ethan V, Google Play ReviewReimagining the way money moves
Get up to $100 per day within minutes!
No interest. No credit check. No mandatory fees.
Best for Short-Term Loans: Sezzle
Sezzle excels in providing short-term shopping loans. The buy now, pay later app is designed to help you finance large purchases when you don’t have the cash in the bank.
Sezzle lets you pay in 4 installments over 6 weeks with no interest or fees if you pay on time. Nor is there a hard credit check, so using Sezzle won’t hurt your credit score.
The app does offer flexible financing letting you reschedule up to three due dates (the first one you reschedule is free) and you can choose to pay in full, pay in 2, or even spread your payments over a few months if approved.
Sezzle is a helpful way to finance purchases when money is tight and you don’t want to take out a traditional loan with high-interest rates and fees.
Check out our Sezzle review for more details.
Highly Recommend
“So far so good!!👍🏽 I made my first order and payment and was able to pick up my item from the retailer in about 2 hours. Without any questions or hassles. I jus started my new job today and I got an email saying my second payment was due in 3 day’s. I went on the app and was able to reschedule my payment 3 week’s out until I get my check. I really like that and is really greatful. This is my 1st time experiencing sezzle and so far I think it’s pretty good. I highly recommend!” Matt EspinosaSR, Google Play ReviewGet Sezzle, the responsible way to pay!
Shop the brands you love.
Split up the payments
Pay 0% interest.
Best for Building Credit: Brigit
Brigit is a go-to option for those looking to build or improve their credit score. The financial app lets you build credit without taking on extra debt.
There are no interest charges, no large deposits, nor any upfront fees for a credit builder loan. All you have to do is make monthly payments of as little as $1 to build credit.
Open a credit-builder account with no hard credit pull or even having to put down your credit score. You then deposit money into an FDIC-insured deposit account with Coastal Community Bank. You decide how much you want to deposit each month. It can be as low as $1. Brigit reports your payments to all three credit bureaus helping you establish a positive payment history.
At the end of the term, your loan is reported as paid in full and you have access to all the money in your secured deposit account.
Brigit’s credit builder loans are a manageable way to build a positive payment history, increase your credit mix, and improve your credit score. Plus, you get to keep all the money you saved.
Read our Brigit review for details about this innovative fintech app.
Easy Credit Builder
“I initially got Brigit for its cash advances, and I was iffy about the $10/mo subscription, but they don’t have extra fees on repayment or forced “optional” tips like a lot of these apps do. What I really love is the credit builder. You choose what you pay monthly and it only affects what you get back at the end. This is a great way to passively build my credit without having to deal with high APRs and interest from loans or more credit cards. This saves me a lot in the long run. Worth it” Haley Smith, Google Play Review
Best Overall for Bad Credit Loans: Upgrade
Upgrade takes the crown as the best overall option for bad credit loans. The company has a low minimum credit score requirement of 560, offers loans from $1,000 to $50,000, and you can receive your funds in as little as one business day.
Upgrade also offers discounts if you turn on autopay or take out a debt consolidation loan and then repay your current creditors directly.
In addition, Upgrade has flexible repayment terms – you can get longer repayment terms on home improvement loans – plus secured and joint loans, which are easier for people with bad credit to get.
It does charge a few fees including an origination fee of 1.85% – 9.99% and a late or failed payment fee of $10.
Upgrade’s streamlined application process, flexible terms, and potential discounts make it a good option for bad credit loans.
See everything Upgrade has to offer by diving into our extensive review.
Easy Peasy
“The process of picking my loan terms was a breeze. I was able to see exactly how much my loan would cost me and all the fees were laid out to me upfront. The process was smooth and the time from application to approval to receiving my funds was less than 4 days. It was great.” E. M. P., Trustpilot Review
Best for Rewards: Explore Credit
Explore Credit is notable for its rewards program. This online lender offers short-term installment loans from $250 to $2,000. There are no hidden fees and no prepayment penalties. You can make extra payments or pay it off in one lump sum.
The rewards program incentivizes you to make your monthly payments. You earn a Loyalty Point for every dollar you pay toward your loan. When you reach 1,500 loyalty points, you automatically receive a discount of $25 off your next payment. Bad credit loans with rewards are a rare find.
Read Top 5 Reasons to Choose Explore Credit Installment Loans to find out more.
🌟🌟🌟🌟🌟Easy, Fast & helpful.
“I’m truly thankful. When I needed it the most Explore Credit was there for me. I paid the amount due in just a couple of days with very little interest rate. If anyone needs help/emergency funds EC is the way to go.” Rosie G, Trustpilot ReviewWe have a loan for you!
Apply online for an Explore Credit Installment Loan.
NO hidden fees – NO early repayment penalties – FAST funding.
Best to Compare Lenders: MoneyMutual
MoneyMutual is a well-known loan marketplace that lets you compare lenders and select the best loan for you. Find loans from $200 to $5,000 from a variety of lenders including those who specialize in bad credit loans.
All you have to do is fill out a simple form – takes only 5 minutes to complete – and you will receive offers from lenders in minutes. Once you select an offer, it can take less than 24 hours for the money to be in your account.
MoneyMutual is a free resource to compare loan offers and make sure you get the best deal for your credit situation.
Find out more about how MoneyMutual can help you by reading our full review.
Very Helpful Lender Matching Service
“The Best Lender Matching Service! I had an emergency, unexpected expense pop up. I heard about online pay assistance so I began my search. Money Mutual was THE ONLY one who matched me with a lender! The others kept throwing me in a circle; multiple emails leading nowhere! I appreciate the accuracy, speed, and assistance I received from Money Mutual! Please try this first to avoid unnecessary false leads by the others!” Jonell, Consumer Affairs ReviewGet A Loan from $100 Up To $5,000!
Receive cash within 24 hours – Fast & easy application – Compare lenders for the best offer.
What are Bad Credit Loans?
Bad credit loans are specifically designed for people with low credit scores or limited credit history. They typically require a low minimum credit score and come with less-than-ideal terms including higher interest rates.
These loans provide an opportunity for people with bad credit to access money. They can be used to cover emergency expenses, consolidate debt, pay medical bills, or make home improvements. You can also use them to build credit so you can get loans with better terms in the future.
How to Compare Bad Credit Loans
1. Review the Annual Percentage Rate (APR)
Compare APRs so you know exactly how much your loan will cost. The APR is both your interest rate and fees. The lower the APR, the less the loan will cost you.
2. Calculate the Monthly Payments
Review your budget and determine how much you can afford to pay each month. Loan payments should be manageable. Monthly payments are determined by the amount you borrow, your interest rate, and loan term.
3. Examine Repayment Terms
Longer terms mean lower monthly payments but more interest over the life of the loan. Shorter repayment terms mean you’ll have larger monthly payments but you’ll be done sooner and the loan will cost you less.
New
Generally, personal loans are for 12 to 60 months. You can find some financial institutions that offer longer or more flexible terms.
4. Account for Fees
Look out for origination fees, prepayment penalties, and late fees. Lots of lenders have multiple fees.
Origination fees are generally 1%-8% of the total amount and are deducted upfront.
Late payment fees are 3%-5% of the monthly payment amount.
Be sure to read and understand the potential fees before you sign for the loan so you’re informed and prepared.
5. Consider Other Loan Features
Some lenders offer features like credit-building tools, flexible payment dates, or introductory APRs. Take a look at these additional features and see how valuable they are to you.
6. Read Lender Reviews
Do your due diligence and read customer reviews. This will give you a better idea of the lender’s reliability, reputation, and customer service options.
Start with the Better Business Bureau to see what customers say and how the lender handles complaints.
Types of Bad Credit Loans
Secured Loans
Secured loans require collateral like your car, house, or even savings account. If you default, the lender has the right to claim your asset.
These loans are often easier to get and come with better rates since they are less risky for the lender. Just remember that if you don’t pay, you could lose your home.
Unsecured Loans
No collateral is needed but they usually have higher interest rates and less flexible terms. Lenders will look at your credit history, income, and debt obligations to determine if you qualify.
Unsecured loans are harder to qualify for without good credit.
Joint Personal Loans
Apply with someone – a trusted friend or family member – with good credit. Since you have a co-borrower with good credit, you’ll be more likely to be approved and be offered lower rates.
The catch is your co-borrower shares responsibility for the payments and access to the funds. Late payments will affect both your credit scores and the lender can try to collect from both of you.
Payday Loans
Payday loans are short-term, high-cost loans, best to be avoided. They are often for less than $500 and must be paid back within 2-4 weeks.
You don’t have to go through a credit check but the APR can be as high as 400%. These loans can be difficult to pay back in time and can trap you in a cycle of debt.
Credit Card Cash Advances
Cash advances are small, short-term loans from your credit card issuer. You withdraw cash from an ATM using your credit card. There’s no credit check or application so it’s helpful if you need fast cash in an emergency.
The problem with these loans is you pay a fee and much higher APR than for regular credit card purchases. There usually isn’t a grace period, so you could end up paying high-interest rates right away.
Bank Agreements
These give you the ability to overdraw your account up to a certain amount. Bank agreements aren’t offered by all banks and you’ll need a strong relationship with your bank to get one.
Bad Credit Home Equity Loans
If you have equity in your home, you can cash in on it with a home equity loan. These loans let you take up to 80% of your home’s value in one lump sum. Pay it back over 5 to 30 years with fixed rates.
This loan type of loan is secured against your home, so if you default, you risk losing your house.
Pros and Cons of Bad Credit Loans
Like with anything, there are positives and negatives to consider before you take out a loan that likely comes with high-interest rates and fees.
Pros:
Access to funds despite bad credit
On-time loan payments can help boost your credit score
Fast funding; usually one to three business days
Fixed, predictable monthly payments
Interest rates are typically lower than on credit cards
Debt consolidation loans can lower your credit utilization ratio
Cons:
Higher interest rates and fees
Risk of falling into debt traps
Potential to damage your credit score if payments are missed
May have to put up collateral or get a co-signer to qualify
Predatory lenders target bad credit borrowers with interest rates exceeding 35% and high fees
Tips to Qualify for a Bad Credit Loan
Add Collateral
If you can and if you know you won’t miss payments, add collateral. This will increase your chances of approval for lower rates and better terms.
It is risky since if you fail to repay the lender can collect your car, house, savings account, or whatever asset you put up.
Add a Co-Applicant
Your co-applicant shares the responsibility and risk. Choose someone with good credit so that you are more likely to be approved with better terms.
A co-applicant will not have access to the loan funds or payment information but they will have to repay the loan if you don’t.
Include All Your Income
Most lenders allow you to add nonemployment income like social security payments, alimony, and child support. The higher your income, the more likely you are to be approved.
Don’t Ask for More Than You Need
Smaller loans are easier to get approved for. Larger amounts look riskier to the lender.
Only request what you need and make sure you can comfortably repay it.
Check Your Credit
Before you apply, take a look at your credit score and report. Only apply to lenders whose credit requirements you meet.
If you see any errors on your credit report, fix them. This may just help boost your score.
Prequalify
Try to prequalify before for at least three lenders you apply. This lets you see if you’re likely to be approved, view estimated loan terms, and shop around for the best rates.
Most lenders will let you prequalify online easily. They only do a soft credit pull to determine your eligibility so it won’t affect your credit score.
Learn how the latest buy now, pay later app can improve your score!
Check out Perpay and get a $1,000 spending limit! No credit check, no fees, and no interest.
Final Thoughts
It may be challenging, you can get a personal loan when you have bad credit. There are plenty of lenders out there with lenient credit requirements looking for people like you.
Always explore your options. Try to prequalify for multiple loans. And compare lenders so you get the best rates and terms possible. You’ll likely face higher interest rates and fees than someone with good credit, so take the time to make sure you get the best deal and that it’s affordable.
