- Personal Finance
- Personal Loans
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Personal loans often have lower rates than credit cards, making them a less expensive alternative if you need to finance an unexpected cost or consolidate debt. But if you have bad credit, it can be harder to find a lender that’s willing to work with you.
While it might be difficult to qualify for a personal loan if you have bad credit, it’s not impossible. We’ve pulled together this list of the best personal loans for bad credit to help with your search.
LendingClub: Best overall
Our take: Offering a simple application process and relatively low rates and fees, LendingClub is our best overall pick among personal loan lenders we evaluated.
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Loan amount: $1,000-$50,000
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Repayment terms: 24-72 months
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Funding speed: As soon as one business day
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Origination fee: 0%-8%
LendingClub offers the option to prequalify for its personal loans, making it a good starting point if your credit isn’t great and you’re comparing options. This lender offers a range of loan amounts and repayment terms, competitive rates, and fairly low origination fees. Borrowers also benefit from fast funding, with loans disbursed as soon as one business day after approval.
Read our full review of LendingClub personal loans.
Oportun: Best for secured loans
Our take: Oportun offers both unsecured and secured personal loans, and its accessible customer support team and flexible repayment terms make it worth considering.
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Loan amount: $300-$10,000 (unsecured), $2,525-$18,500 (secured by car)
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Repayment terms: 24-52 months
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Funding speed: Not specified
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Origination fee: Up to 10%
Many personal loan lenders only offer unsecured loans, but that’s not the case with Oportun. You might be eligible for a secured personal loan from Oportun if you’ve paid off your car and you’re the only owner listed on its title. It also offers unsecured loans, too. While Oportun indicates that it disburses loans “quickly” via direct deposit, it doesn’t specify a timeframe for disbursement. Fortunately, Oportun offers accessible customer support, so you can likely reach a representative if you have questions about timing.
LendingPoint: Best for a simple application process
Our take: LendingPoint offers an easy-to-navigate application and funding as soon as the next business day after approval.
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Loan amount: $1,000-$36,000
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Repayment terms: 24-72 months
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Funding speed: As soon as the next business day
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Origination fee: Up to 10%
Borrowers can prequalify for personal loans with LendingPoint, and it offers a very simple application process. If you qualify, you could borrow up to $36,000 and enjoy a long repayment term of up to seven years. LendingPoint receives high marks with borrowers, though its customer service channels are somewhat limited. If you have questions about its loans, you can reach a representative via phone or email, but it doesn’t specify operating hours.
Upstart: Best for customer satisfaction
Our take: Upstart customers give the lender high ratings, and it also offers an accessible customer service team, making it our top pick for customer satisfaction.
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Loan amount: $1,000-$50,000
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Repayment terms: 36 or 60 months
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Funding speed: As soon as one business day
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Origination fee: Not disclosed
Upstart gets excellent feedback from online reviewers, and its customer support team is reachable by phone and email seven days a week. Besides providing great service, Upstart also offers fast funding and a range of loan amounts. But its repayment terms of 36 or 60 months are limited compared to competitors, and it doesn’t disclose its origination fees. Upstart offers prequalification, so you can check your rate without affecting your credit score.
Avant: Best for low rates
Our take: Avant offers relatively low rates compared to its competitors, which is good news for borrowers who want to minimize their interest costs
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Loan amount: $2,000-$35,000
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Repayment terms: 24-60 months
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Funding speed: As soon as one business day
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Origination fee: None, but has an administration fee of up to 9.99%
Avant offers loans of up to $35,000, and if approved, you can get your funding as soon as one business day. While many lenders offer very high rates, especially for borrowers with poor credit, Avant’s rates are fairly low by comparison. That said, it does have administration fees that can be as high as 9.99%, so this is something to keep in mind if you’re concerned about high borrowing costs.
Prosper: Best for co-applicants
Our take: Prosper lets you apply for a loan with a co-applicant, which could help increase your chances of approval or improve your loan rate or term.
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Loan amount: $1,000-$36,000
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Repayment terms: 24-72 months
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Funding speed: As soon as the next business day
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Origination fee: Up to 10%
Prosper may be willing to work with you if your credit score is 600 or above, but it also permits co-applicants. Applying for a loan with a trusted friend or family member who has stronger credit could not only increase your likelihood of approval, but it could also earn you a lower rate, a larger loan, or more favorable terms. Just ensure you’re able to afford your payments, as your loan co-signer will be equally responsible for the loan if you can’t repay it.
Read our full review of Prosper personal loans.
Best Egg: Best for customizable payment options
Our take: Best Egg offers payment flexibility through a non-traditional loan payment option that could reduce your payment as your repayment progresses.
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Loan amount: $2,000-$50,000
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Repayment terms: 36-60 months
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Funding speed: As soon as one business day
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Origination fee: 0.99%-9.99%
Personal loans typically come with one payment option: Fixed monthly payments that don’t change over time. But Best Egg gives you another choice through its Payment Pathways program. Borrowers who participate in this program benefit from lower payments the longer their term goes on.
While Best Egg’s flexible payments are an intriguing option, this lender charges origination fees as high as 9.99%. This is something to be mindful of if you’re considering one of its personal loans.
Upgrade: Best for flexible terms
Our take: Upgrade offers personal loan terms from 24-84 months, which sets it apart from competitors offering less flexibility.
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Loan amount: $1,000-$50,000
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Repayment terms: 24-84 months
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Funding speed: As soon as one business day
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Origination fee: 1.85%-9.99%
Whether you’d prefer a short or long repayment term, Upgrade is worth a look. Its terms are some of the most flexible among the lenders we evaluated. It also offers loans ranging from $1,000 to $50,000, a broad range compared to some competitors.
Upgrade borrowers benefit from fast funding, with personal loans disbursed as soon as one business day after approval. That said, it charges origination fees as high as 9.99%.
OneMain Financial: Best for fast funding
Our take: OneMain offers impressively fast funding — as soon as one hour after loan approval — for qualifying borrowers who use their debit card to accept funds.
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Loan amount: $1,500-$20,000
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Repayment terms: 24-60 months
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Funding speed: As soon as the same day
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Origination fee: Up to 10%
If you need funds fast to pay for an urgent cost, OneMain Financial could be worth considering. This lender offers funding as soon as one hour after loan approval for eligible borrowers, which is one of the fastest funding times among lenders we evaluated. To qualify for this speedy funding, you’ll need to use your debit card to accept your loan funds. Those who choose another method will generally receive funds within 1-2 business days after closing.
Bad credit personal loan pros and cons
Benefits
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Flexible funding: You can use a personal loan for almost anything, though popular options include debt consolidation; paying for medical, dental, or veterinary bills; or covering the cost of an auto or home repair.
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Debt consolidation: Consolidating high-interest debt with a lower-rate personal loan could make it easier to repay your balance and save you money in the long run.
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Flexible borrowing requirements: Lenders may have flexible borrowing requirements, with some accepting lower credit scores than others. Others may let you apply for a loan with a co-signer or co-borrower.
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Fast approval: Lenders often approve and disburse personal loan funds in a matter of a few days, making this type of financing a good choice if you need money fast.
Risks
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Fewer options: Borrowers with poor credit have fewer loan options, as many lenders require at least good credit to qualify for a personal loan.
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Higher rates: You'll likely get a higher rate on a personal loan if your credit isn’t great.
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Fees: Fees are common with personal loans, so factor these extra costs in as you compare options.
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Additional debt: If you’re already struggling financially and you qualify for a personal loan, it could be difficult to manage an additional monthly payment.
How to choose a personal loan
You’ll want to consider several factors as you shop around for a personal loan. The best options offer flexible borrower requirements, loan amounts, and terms; fast funding; and relatively low rates and fees. Here’s what to look at when you’re comparing options.
Secured vs. unsecured personal loans
If you have poor credit and your primary goal is to improve your credit score, a secured personal loan could be a good alternative to an unsecured option.
While most personal loans are unsecured, meaning they don’t require you to pledge an asset to back your loan, some are secured by collateral. Lenders offering secured loans may accept a paid-off vehicle, savings account, or another form of collateral. You could also end up with a lower interest rate by opting for a secured personal loan vs. an unsecured one, as the loan’s collateral will help offset the lender’s risk. If you default on payments, your lender can seize that collateral.
Interest rates
Borrowers with bad credit typically end up with higher loan interest rates than those with stronger credit. Since your interest rate will impact your borrowing costs, it’s smart to compare potential rates before formally applying for a loan.
Fortunately, some lenders offer the option to prequalify for a personal loan with a soft credit check, which won’t harm your credit. Prequalifying can provide some insight into your potential loan rate, so consider going through this process with a few lenders to find a low-rate option.
Loan amount and terms
The loan amount and repayment terms you qualify for will vary depending on the lender you choose. Some lenders may offer personal loans as large as $100,000, while others cap borrowing at $10,000. Likewise, some lenders may have repayment terms as long as seven years, while others’ terms max out at five years or less.
If you need to borrow a specific amount or are seeking a certain repayment term, ensure you compare loan amounts and terms with different lenders. Prequalifying can also give you a sense of the loan amounts and terms you might qualify for, so this is an important step as you shop for a personal loan.
Fees and penalties
You’ll often see two rates advertised when you’re comparing loans: an interest rate and an APR. The interest rate is the rate the bank charges you to take out a loan, but the APR typically includes the loan’s interest rate and any applicable fees. Thus, APR can offer a more accurate picture of a loan’s total costs. Common personal loan fees and penalties include:
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Application fee: Though rare, lenders may charge an application fee, which often amounts to $25 or $50.
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Origination fee: They may also charge an origination fee, which covers the cost of processing your loan application. Origination fees are often a set percentage of your total loan.
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Prepayment penalty: Prepayment penalties are uncommon, but you could be charged for repaying your loan balance before your term is up.
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Late payment fee: Most lenders charge late payment fees. A late payment fee applies if you get behind on your monthly loan payments.
Lender reputation and customer service
As you compare loans, be aware that predatory lenders often prey on borrowers with poor credit or those in dire financial circumstances. For this reason, evaluating prospective lenders’ reputations is important. Use tools like online reviews, the Better Business Bureau (BBB), and the Consumer Financial Protection Bureau’s (CFPB’s) consumer complaint database for insight into how consumers view lenders, their products, and their customer service options.
Up Next
How to apply for a bad credit personal loan
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Check your credit: It’s smart to review your credit reports and scores before you apply for a loan. Doing so will help ensure your credit reports are accurate and you understand where you stand from a credit score perspective. Check your reports for free at AnnualCreditReport.com and view your scores through your credit card issuer, bank, or a free tool like Credit Sesame.
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Gather your documentation: Reputable lenders usually request several documents when you apply for financing, including bank statements, W-2s, pay stubs, and more. Gathering this information ahead of time can simplify the loan application process.
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Prequalify: If a lender offers the option to prequalify, it's wise to do so. This will help you understand potential loan offers, including rates, terms, and loan amounts.
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Formally apply: Once you’ve compared offers, it’s time to formally apply. Personal loan lenders typically offer online applications, and application requirements are less onerous than some other types of financing, like mortgages or home equity loans.
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Await approval: Lenders typically review personal loan applications quickly. If you’re approved, you may receive funds within just a day or two after applying.
Bad credit personal loan FAQs
Can I get a personal loan with bad credit?
Yes, it’s possible to get a personal loan with bad credit, though your selection of lenders will likely be more limited. Some lenders may have flexible credit score requirements, while others may allow you to apply for a loan with a well-qualified co-borrower.
What’s the best personal loan for borrowers with bad credit?
The best personal loan for you will depend on your unique situation. Some top personal loan lenders offering loans to borrowers with fair or poor credit include LendingClub, Upstart, Avant, Prosper, and others.
Can I apply for a personal loan with no credit check?
Yes, some lenders may let you apply for a personal loan with no credit check, but you should carefully vet these lenders. Predatory lenders may offer this option, charging exorbitant fees to borrowers. These high-cost, high-risk loans could be difficult or impossible to repay. Even if a lender doesn’t charge high fees, you may end up with a smaller loan or a short repayment term with a no-credit-check loan.
This article was edited by Alicia Hahn.
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