Whether because of poor financial decisions or plain bad luck, you might find yourself with a low credit score and the need to take out a loan. It’s a Catch-22 combo that can leave you wondering, “How can I get a loan with bad credit?”

The Simple Dollar’s goal is to help you answer that question. We understand that life can throw you curveballs, and sometimes a bad credit loan is the only way to get through a financial emergency. In this article, we’ll provide tips for getting the best bad credit loans as well as guidance on how to improve your credit score so that you can borrow money on better terms in the future.

There’s one important matter to clear up right away: There are plenty of reputable companies willing to give loans to people with bad credit, and you should look into them before you consider taking out a payday loan. Research from the Consumer Financial Protection Bureau shows payday loans can devastate borrowers, charging annualized interest rates up to 400%.

Your typical bad credit loan will have higher than average interest rates, to be sure — but they will not be anywhere near 400%. The key is to do some research: Compare your options and find the best deal for your personal situation. That starts with knowing your credit score, which you can check for free using these resources — you might find it’s not as bad as you feared.

But if your credit is less than perfect and you still need to borrow money, we’ve done much of the research for you and compiled our picks for the best bad credit loans. Consider this list of lenders and what they have to offer.

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Use the loan comparison tool below to view multiple loan options with no obligation.
Simply enter the purpose of the loan, the amount you need, your estimated credit score, and the state you reside in to instantly view loan companies available to accept your application online right now.

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The Best Loans for People with Bad Credit

How to Get a Loan With Bad Credit: The Best Options

Before diving into our research, remember that bad credit means different things to different lenders. For the purpose of this piece, we’ll focus on lenders who will make loans to people with credit scores below 640. While this is considered the low end of “fair credit” in some circles, lending criteria tightens considerably below this mark.

But, to reiterate, having bad credit does not mean that all hope is lost. With focus and determination, you can find a bad credit loan to help you and your family through a rough patch.

Best for Really Bad Credit: Bad Credit Loans

Get Started on BadCreditLoans.com’s secure website

When it comes to getting a loan with really, really bad credit, your options are limited. But BadCreditLoans.com is a site that connects borrowers with poor credit to a network of willing lenders. To apply online, you must be 18 years old, have a valid phone number and email address, provide proof of citizenship or legal residency, hold a checking account in your name, and have a regular income, whether from full-time or self-employment, disability, or Social Security.

After putting in a request, you’ll wait to receive offers from their network of lenders. Keep in mind, though, that depending on your financial situation, you may not receive any offers. If you do, typical loan amounts range from $500 to $5,000 with an APR of anywhere from 5.99% to 35.99%, according to their website. The repayment terms generally range from three to 36 months.

So, for instance, if you were to take out a $3,000 loan with a 35.99% interest rate and 24-month term, you can expect to pay $177 a month. Your principal would be around $3,173 with another $1,252 in interest — which isn’t ideal, but this bad credit loan would still be far preferable to a predatory payday loan. (Avoid them like the plague.)

Reasons to Sign up

Reasons to Sign up

Reasons to Avoid

Reasons to Avoid

  • Borrowers with poor credit may still qualify for a loan of up to $1,000.
  • They will solicit offers on your behalf making it easy for you to choose the best terms.
  • Applying is free and there’s no obligation to accept any offers.
  • Most applicants can be pre-approved in as little as five minutes, according to the company.
  • There’s no guarantee you’ll receive an offer from one of their lenders.
  • Interest rates are high — up to 35.99%.
  • Bad-credit loans are generally limited to $1,000 or less.
  • Beware of renewing your loan and getting trapped in a cycle of debt.

Best Secured Bad Credit Loans: OneMain

Get Started on OneMain’s secure website

OneMain specializes in all types of personal loans, but they’re a great option for those looking for bad credit loans because they offer secured and unsecured loans. Generally, if your credit falls within the poor or bad range, you’ll need to either decrease the loan amount or look for a secured loan — which means putting something up for collateral to offset the lender’s risk, such as a car, truck, or motorcycle.

While loans for bad credit can range from $1,500 to $10,000, those with better credit could be eligible for loans as high as $30,000. APR also ranges from 16.05% to 35.99%, and typical term lengths can be 24, 36, 38, or even 60 months. You can also visit one of their 1,600 branches in person or handle the entire application process online.

Reasons to Sign up

Reasons to Sign up

Reasons to Avoid

Reasons to Avoid

  • Ideal for borrowers with credit scores lower than 600.
  • They offer both secured and unsecured loans.
  • There are more than 1,600 branches if you’re looking for a face-to-face.
  • Received an A+ rating from the Better Business Bureau.
  • It might be difficult to nail down specific APRs and loan amounts online.
  • They only have branches in 44 states which might limit you to online correspondence.

OneMain Disclosure

Best Peer-to-Peer Loans: Peerform

If you need a bad credit loan option and your credit score is poor but not outright terrible, Peerform is a lender you may want to consider. They’re a peer-to-peer lending platform, meaning they match up borrowers with individuals willing to lend money. It’s an interesting concept that takes traditional banks out of the equation and can sometimes offer lower fees because they have less overhead.

Be mindful of the fact that Peerform will decline any application with a credit score below 600 (which is all the more reason to learn how to raise your credit score). Because of their credit score restrictions, they’re able to offer loans ranging from $4,000 to $25,000 to potential borrowers with APRs ranging from 5.99% to 29.99%.

One of the downsides to using Peerform is that it can take up to two weeks to receive funding. So, if you need cash fast, this may not be the best platform for you. Additionally, there are fees associated with the loans, such as a 1% to 5% origination fee, and loans are only available to residents of 42 states.

Reasons to Sign up

Reasons to Sign up

Reasons to Avoid

Reasons to Avoid

  • APRs as low as 5.99% to 29.99%.
  • Borrowing limit up to $25,000.
  • Straightforward online information on potential APRs, loan amounts, and fees.
  • Received an A rating from the Better Business Bureau
  • You’ll need credit of 600+.
  • There is no option for secured loans.
  • You might have to wait a while for loan funding.
  • There are several fees to consider including an origination fee up to 5%.

Best Unsecured Loans: Avant

Get Started on Avant’s secure website

Avant focuses on loans for “in between” borrowers — customers with a credit score between 600 and 700. If you fall in that range, Avant is good if you need your funds quickly — you may get your loan as soon as the next business day after you apply.

Loans can range from $2,000 to $35,000 with APRs between 9.95% and 35.99%. Furthermore, the loan terms offered can range from 24 to 60 months. However, you should also be aware of an administration fee that can range from 1.50% to 4.75%.

Reasons to Sign up

Reasons to Sign up

Reasons to Avoid

Reasons to Avoid

  • Rates range from 9.95% – 35.99% APR.
  • Loans are available in 46 states including the District of Columbia.
  • Turnaround of one business day to receive loan funding.
  • Loan amounts can range from $2,000 to $35,000.
  • Payment terms as short as two years or as long as five years are available.
  • Received A+ rating from the Better Business Bureau.
  • No option for secured loans.
  • You will need a credit score higher than 580.
  • Residents of Colorado, Iowa, Vermont, or West Virginia are out of luck.

Runners-up


The takeaways:

  • They accept applications with credit scores as low as 550
  • Loans range from $1,000 to $10,000
  • APRs start around 34% and get as high as 155%

The good thing about NetCredit is they look beyond just your credit score (sometimes accepting applications with scores as low as 550); however, that does come with a cost. Their loans range from $1,000 to $10,000 with APRs starting around 34% — and in some cases ranging as high as 155%. If your offer comes with an extremely high APR like that, look into other options, such as a secured loan or using a cosigner.


The takeaways:

  • Refers you to multiple lenders after just one application
  • Loans can top out at $35,000
  • Competitive APRs with several loan types

PersonalLoans.com allows multiple lenders to solicit your business after you fill out just one application. APRs are competitive and there are several types of loans, which top out at a generous $35,000. Of course, this is a referral site, so your terms, fees, and APRs will vary depending on the lenders who contact you. This kind of information can be easier to determine with a direct lender.

How Can I Fix My Bad Credit to Get a Better Loan?

This might sound obvious, but the best way to get a loan with bad credit is to raise your credit score. Even a slight increase can help: If you raise your credit score from “poor” to “fair,” say from 580 to 620, that can make a huge difference in the loan terms and interest rate you’ll qualify for, saving you a lot of money over the life of the loan.

There are several key things you can do to raise your credit score. Remember, bad credit is not a life sentence, but a temporary situation that can be improved if you put in the work. Before you resign yourself to a lifetime of bad credit, consider taking these steps to qualify for more and better loans:

  • Get to know your credit report. If you haven’t already done so, pull a free credit report. This will also let you verify that there aren’t any errors or fraudulent activity keeping your credit in the dumps. Knowledge is power, so take advantage of every option you have to know your exact situation. And if there are discrepancies, fix them fast — that alone can raise your score in a hurry.
  • Make more payments, and always pay on time. Nothing kills a credit score quite like late payments. Consider setting your bills to auto-pay so you can make sure that nothing falls between the cracks. And making smaller payments more frequently can help your credit score, too, because it can show you’re using less of your available credit — a good thing for your credit score.
  • Don’t use most of your available credit, even if you pay it off on time. Along those lines, your credit utilization ratio — your outstanding balance vs. your total credit limit — should be no more than 30%, but 10% or less is ideal, experts say.
  • Resist the urge to close accounts. Having credit that you don’t actually use is good for your score. Keep an account active by using it to pay a small bill from time to time and paying it off right away. Having the same account open for several years lengthens your credit history and boosts your score as well.
  • Take advantage of credit-building tools. Secured credit cards, for example, provide a safe way to make monthly payments and build credit history. You can also ride the credit coattails of a parent or other responsible mentor if they’re able to add you as an authorized user on their credit card — even if you never touch or use the card. If you need to take out a loan, you can ask someone with good credit that you trust to become a cosigner.
  • Reduce your amount of credit inquiries. If you’re applying for a lot of credit cards or loan products and your credit is constantly being pulled, it can drag down your score. This is the least influential factor in your credit score, but you should still be judicious about how often a company is running your credit.
  • Ask for a re-aging. If you’ve had some delinquencies on a credit card but you then you got back on track, can ask the issuer to “re-age” your account. To do this, you must have made on-time payments for at least three months. If the bank agrees to re-age your account, they’ll erase the past-due notations on your credit report for that credit card. However, keep in mind that there’s a set amount of time collectors can sue to collect on debts. Look into this before you do any re-aging so that you are not tricked into re-aging, or “bringing back to life,” debts that are not collectible.

If you follow the steps above, you’ll be well on your way to getting a better loan, even if you have bad credit right now. Here’s some more advice from the smartest people in the financial world about raising your credit score so you can get better bad credit loans, with the ultimate goal of not needing bad credit loans at all.

headshot of Howard DvorkinTo fix bad credit, you need to dispute inaccurate information, keep a constant watch on charges in your credit reports and be sure to notify creditors/ loan officers once items are fixed. This can be a major factor in getting approved for loans you weren’t qualified before, receiving better interest rates on car or mortgage loans and getting better deals on credit cards.

-Howard Dvorkin, CPA and Chairman of Debt.com

headshot of Randall YatesThe fastest way someone with poor credit can increase their score before applying for a loan is to pay down your credit card debt. Your credit utilization ratio is the amount of available credit you’re using, and it accounts for 30 percent of your FICO score.

-Randall Yates, Founder and CEO of The Lenders Network 

Because even the most sympathetic lender won’t give you a great APR if you have bad credit, we recommend making every effort to give your credit a boost before resorting to a bad credit loan. It’s not a quick process, but the effort will be more than worth it in the long run.

headshot of Ben GoldFixing bad credit doesn’t happen overnight. If you’re in need of a loan, make sure you budget appropriately. Make sure you’re able to pay off the loan in full and on time to increase your chances of having better loan rates and terms should you seek financing again in the future.

-Ben Gold, President of QuickBridge

What Type of Bad Credit Loan Do You Need?

Bad credit loans range from conventional personal, auto, and home loans with less-than-favorable terms to short-term, no-credit-check loans like payday and auto title loans. All have pros and cons, but some are a much wiser choice than others — and some should be avoided entirely.

If you want to get a bad credit loan, it’s critical to understand exactly what you need it for so that you don’t waste your time looking at the wrong lenders.

Bad Credit Personal Loans

Personal loans for bad credit, available through brick-and-mortar banks, credit unions, and online lenders including those profiled above, are loans made for any purpose. The amount the lender will be willing to part with varies widely based on your credit and whether the loan is secured (backed with collateral that your lender can seize if you don’t pay back the loan) or unsecured (no collateral required).

If you want to do business locally, credit unions can be a particularly good choice because they might be more flexible with their lending criteria than bigger banks – especially if you’re a longtime customer.

Experts warn against borrowing from lenders who don’t thoroughly check your credit history, repayment ability, and other financial circumstances. You should also be wary of expensive insurance add-ons that ensure the loan will be paid back if you die or become disabled.

If you have very bad credit, secured loans can be a viable option — it will be easier to qualify and you’ll receive more favorable terms, such as a higher loan amount and a lower APR. However, you must be absolutely sure you can repay your loan on time or you could lose whatever collateral you’ve agreed to use — typically that’s your home, car, or savings account.

Another option is getting a co-signer with better credit to sign for a loan with you. The lender will then use the co-signer’s credit to determine the terms. Of course, doing so puts the co-signer at huge risk. He or she is equally responsible for payments if you suddenly can’t afford them. If you think there’s any chance you’ll default, save your friend or family member the trouble of becoming a co-signer or you’ll risk their finances — and your relationship — too.

Finally, keep in mind that many banks, such as US Bank, are starting to offer “simple” loans that are more consumer friendly. These are a direct response to the predatory practices of payday lenders. These loans are typically in amounts between $100 and $1,000, with the goal of helping out those who need bad credit loans but still want to work with large, trusted banks.

Compare Loan Companies and Apply Online

Use the loan comparison tool below to view multiple loan options with no obligation.
Simply enter the purpose of the loan, the amount you need, your estimated credit score, and the state you reside in to instantly view loan companies available to accept your application online right now.

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Bad Credit Mortgages

Even after the subprime mortgage crisis, it’s still possible to get a mortgage with bad credit. Of course, your choices will be more limited and more expensive. Experts say it’s wise to work with a mortgage broker who can help you evaluate your options. One option is an adjustable-rate mortgage, which can be easier to qualify for than conventional fixed-rate loans – but can leave you on the hook for larger payments once your introductory rate resets in a few years.

One of the best places to look for a bad credit home loan is the Federal Housing Administration’s loan program. Because the government backs FHA loans, lenders can still offer competitive interest rates while accommodating borrowers with credit scores as low as 580 and above. You’ll need a down payment of at least 3.5% — far less than the typical 20% required for conventional mortgages. The major downside is that you’ll pay fairly high mortgage insurance payments over the life of your loan or until you’re able to refinance.

Bad Credit Auto Loans

Bad credit auto loans are simply loans for car buyers with bad credit that have less favorable terms — generally a higher APR and a lower loan amount — than auto loans made to buyers with good credit.

Since cars are a common form of collateral, there are plenty of reputable lenders who focus on bad credit auto loans (we detail them in a separate post on the Best Bad Credit Auto Loans). However, beware: Unscrupulous dealers may take advantage of bad-credit customers with shady tactics like leading you to believe your credit is even worse than it is or requiring you to buy add-ons to get financing. In general, you also shouldn’t pay interest rates in the high double digits or sign for a loan with terms longer than five years.

Payday Loans

Payday loans might be the most ubiquitous loan for people with bad credit. Unfortunately, they’re also almost always a bad deal for you.

Payday loans are typically small, usually $500 or less, and made for a short period of just a week or two before repayment is required on your next payday. They’re easy to get as long as you provide proof of income. The lender usually requires you to write a check for the loan amount plus interest that can be used for repayment. You may even give the payday lender electronic access to your account.

The main problem with payday loans is the astronomical finance charges. According to the Consumer Financial Protection Bureau, you may pay $10 to $30 in interest and fees just to borrow $100. If you pay $15 to borrow $100 for two weeks, that’s an APR of a whopping 400%. Meanwhile, when that two-week deadline comes around, many payday lenders allow you to pay only the interest and roll over the loan. This tempting scenario traps many low-income borrowers in a cycle of debt since they can only afford to pay back the excessive interest.

In fact, the CFPB has found that more than a third of borrowers take out between 11 and 19 payday loans over the course of a year. A quarter owe money to payday lenders for more than 80% of the year.

Some states have cracked down on payday lenders by capping interest rates, but many still allow the practice unabated. The unsavory nature of the business recently led to $505 million in refunds being sent to payday loan customers who were wronged by illegal practices.

Bottom line? You’re best off avoiding payday lenders if you need a bad credit loan.

Auto Title Loans

Do not confuse auto loans that are meant for car buyers with auto title loans. Auto title loans require you to use your car as collateral in order to get a loan that can be used for any purpose. The amount of these loans varies, but it’s usually for much less than your car is actually worth. You usually won’t need a credit check to get an auto title loan.

According to the FTC, auto title loans typically last for 15 or 30 days and have a triple-digit APR. These kinds of loans can easily trap borrowers who can’t afford to repay the loan in a cycle of debt, as they continually renew the loan with interest-only payments.

Many lawmakers have cracked down on auto title loans, which are now illegal in 23 states. If auto title loans are still legal in your state, beware. Like payday loans, they simply aren’t a smart choice for those looking for a bad credit loan.

Do I Need Collateral to Get a Bad Credit Loan?

Collateral is an asset a borrower owns, such as a house, car, or personal valuables, that is put up to reassure payment of a loan. If a borrower fails to pay their loan, the lender is allowed to repossess the collateral and sell it in order to make their money back.

There are two types of loans available to borrowers — secured and unsecured.

Secured is named because each loan is secured by a borrower’s collateral. Usually, the item put up for collateral is specified when the loan begins. Other types of collateral are required by the type of loan. (Mortgages, for example, are always secured using the borrower’s home as collateral.)

From a lender’s perspective, loans secured by collateral are less risky. Borrowers are more likely to pay if their personal property is at stake. As a result, secured loans tend to come with lower interest rates. And borrowers are usually able to take out higher amounts of money with a secured loan.

Unsecured loans do not require any collateral. Borrowers are essentially promising lenders that they’ll be able to repay their loan in full. Lenders tend to see unsecured loans as riskier investments, so unsecured loans tend to come with higher interest rates.

In summation, whether or not you need collateral to get a bad credit loan depends on your credit score, how much you need, and what company you choose to work with.

Can I Take Out an Unsecured Loan With Bad Credit?

It is possible to take out an unsecured loan with bad credit, although your interest rates may be considerably higher than with a secured loan.

You should only consider a secured loan if you’re positive in your ability to repay. You don’t want to risk your car or your home for the sake of a bad credit loan.

Can You Get a Loan if You’re Unemployed?

You can get certain types of loans even if you’re unemployed, but we strongly advise against considering them. Borrowing money while unemployed carries risks, and you’d probably be better off taking proactive steps to improve your credit score and shore up your financial situation first.

There are generally three types of loans available to unemployed borrowers:

  • Unsecured loans with high interest rates
  • Secured loans with high interest rates
  • Payday or auto title loans

None of the above is a good option. If you borrow without the ability to repay, you’re putting both your financial and professional future at risk. Some organizations require a credit check as part of their hiring process.

If you’re unemployed with existing debts, you still have a few steps you can take:

  • Examine and prioritize your debts.
  • Negotiate with your creditors.
  • See if you qualify for unemployment insurance.
  • Consider freelance or part-time work.

If you’re newly unemployed, you might qualify for unemployment insurance. Check out unemployment benefits by state. There’s a ton of good information online about how to get a job, and for more advice on finding employment you can check out our employment guide.

Can I Get a Bad Credit Loan Without a Checking Account?

In short, the answer is yes. Many lenders require borrowers to have at least a checking account in order to receive funds. Both installment and lump-sum lenders prefer to deposit funds directly into a checking account. But you have other alternatives that can help you receive a loan and build credit. One way to boost your odds is to join a credit union.

Larger banks usually examine your credit history closely when you’re applying for a new account. If your credit score needs work, it’s less likely that you’ll be able to open an account. But instead of just considering your financial history, credit unions will consider your overall financial situation.

Credit unions are nonprofits, offering their members lower borrower rates and annual fees. But to join a credit union, you often have to be a member of a specific group or live in a specific area. Luckily, a number of credit unions have more relaxed membership requirements. To join, you may just have to donate $5 to $20 to a charity with a relationship to the credit union.

Another way to improve your odds of getting a bad credit loan is to open a second chance checking account. They’re like secured credit cards in that they give those with bad credit another shot at traditional banking.

Many second chance banking accounts come with required monthly fees as collateral. Second chance accounts often restrict an account holder’s ability to overdraft, so you won’t be able to take out more than you have.

Second chance accounts give account holders the opportunity to pay bills and write checks from their account. Holders can access debit cards that pull directly from their account. Second chance accounts can be transitioned into traditional accounts after 6 months to a year as a result of good financial practices.

How to Spot Bad Credit Loan Scams

Bad credit puts you in a vulnerable position when you’re searching for a loan. But just because your terms won’t be as favorable as they would be with excellent credit doesn’t mean you should accept any old offer.

headshot of Priyanka PrakashBe wary of online lenders or brokers who charge fees up front to get you approved for a loan. Not all fees are a sign of a scam, but when coupled with claims that bad credit doesn’t matter, it’s usually a troubling sign. Brokerage fees should come out of your loan after your loan closes. Someone who asks you to pay upfront might be trying to swindle you.

-Priyanka Prakash, Loans Expert at Fundera

Keep your eyes peeled for these red flags while searching for the best bad credit loans:

  • Guarantees: Legitimate lenders won’t tell you that you can get a loan without knowing your income, credit score, and other personal information. Any lender who guarantees that you’ll qualify before evaluating your information is probably bad news.
  • Upfront fees: It’s against the law for lenders to charge you simply for filling out an application.
  • Lots of uninitiated contact: Be careful if you’re getting constant mailings or calls from a certain company. Legitimate lenders don’t need to hound potential customers.
  • Fishy-sounding names: Some unscrupulous companies will closely copy the names of legitimate lenders to profit from their better reputations. Make sure you’re really doing business with the right company.
  • Pushy requests for personal information: You should only provide personal information to a company you trust once you know what kind of loan you’re applying for. Be particularly cautious about giving out information over the phone, especially if you didn’t initiate the call.
  • Scare tactics: It’s common to shop around for the best deal and wise to take time to evaluate how much you can safely borrow. Your lender shouldn’t pressure you to make a deal before you’ve considered your options.

headshot of James DurenA bad credit loan scam is going to do a few things. First, they’re going to pressure you by making their loans seems like a no-downside proposition. Second, they’re going to skim over the interest rate and fees you’ll pay. Third, your instinct is probably going to raise a red flag. Look for loans that present the loan fees and APR in a clear way and that don’t use pressure tactics to get you to borrow from them.

-James Duren, Personal Finance Analyst at HighYa.com

 

headshot of David WaxlerIf the lender pressures you to agree over the telephone and insists on your bank account information for automatic payments, take caution. Any reputable company will allow you time to review the loan documents and think about your decision or talk it over with a family advisor.

-David Waxer, Finacial Wellness Expert and Housing Counselor at GreenPath 

Above all else, take a few minutes to check up on a lender yourself. Look at online reviews and the company’s Better Business Bureau profile. Be suspicious of consistently positive or negative reviews — the truth is probably somewhere in between. Double-check a company’s address, too. Being proactive at the beginning of your search can save you a lot of trouble down the road.

Tips for Finding the Best Bad Credit Loans

Interest rates are a big consideration when you’re searching for a loan with bad credit, but there are other factors to consider. Here are the criteria we focused on in our search for the best loans for bad credit. If you focus on these factors, you can find the best bad credit loans for your unique situation. Always look for:

  • Higher loan limits: While it’s common for some lenders to cap loans for bad credit at low amounts such as $1,000, the best lenders allow larger loans for those who need them.
  • Reasonable APRs: Unfortunately, you’re not going to land a low interest rate with a bad credit score. Exorbitant APRs are out there, especially if you have very bad credit and are trying to get a loan without collateral. The best lenders still keep their interest rates competitive relative to your credit score.
  • Reasonable fees: Common fees include charges for loan origination, late payments, prepayments, and unsuccessful payments. Some lenders charge most or all of these; others don’t charge any fees at all. The best lenders keep fees to a minimum and charge a reasonable amount for those they do require.
  • Flexible terms: You may want to pay off a loan as quickly as possible to save on interest, or you might want a longer term to keep your payments low. The best lenders don’t lock you into one or two predetermined terms, such as three or five years.
  • Easy-to-find specifics: The best lenders understand that potential borrowers want to know potential APRs, loan amounts, terms, and fees before they start an application and include that information on easy-to-find pages on their websites.
  • Extensive reach: Different state regulations mean lenders may operate only in certain states. The best lenders have a wider reach.
  • Reputation: Consider each lender’s online reviews and status with the Better Business Bureau. BBB accreditation isn’t a necessity, especially for newer companies, but it is a plus. Also, consider how long the company has been in business. Give the least weight to individual reviews, as it’s common for prospective borrowers to give negative reviews for reasons such as being denied a loan.

Be sure to evaluate a range of choices when you’re searching for the best bad credit loans. You’ll want to find a lender who knows your credit score is just one part of a bigger picture, and you’ll need to make sure you understand what kind of loan you need, what kinds of loans to avoid, and how to avoid scams.

headshot of Gerri DetweilerAlways look at the interest rate and fees. Generally, the worse your credit, the more likely you’ll pay a high interest rate. Also make sure you understand how much your monthly payments will be to determine if they are affordable. You don’t want to default and make your credit even worse.

-Gerri Detweiler, Education Director at Nav

Be Aware of Minimum FICO Scores for Bad Credit Loans

When you’re looking for the best bad credit loans for your situation, it’s important to know going into it what FICO score you’ll need to qualify. Here are the credit score requirements among our top recommended lenders:

Company Credit score as low as …
1 BadCreditLoans.com 600 or below
2 OneMain 600
3 Peerform 600
4 Avant 580
5 NetCredit 550
6 PersonalLoans.com 500 or below

You can also consider talking to your local bank. If you’ve been at the same institution for years, they might be more willing to work with you on providing good terms for a bad credit loan. You’ll never know unless you ask.

If you schedule a time to talk with a banker in person, make sure to come prepared! Bring as much information as you can to demonstrate you’re worthy of getting a loan. This could include W-2 forms, pay stubs, information on your job history, bank statements, and a list of your assets. The more prepared and professional you are, the better your chances.

As always, you’ll want to consider all of your options to find the best loans for bad credit that work well with your unique situation. A great place to start is to compare multiple loan companies using our free loan search tool below. (After all, knowledge is power!)

Compare Loan Companies and Apply Online

Use the loan comparison tool below to view multiple loan options with no obligation.
Simply enter the purpose of the loan, the amount you need, your estimated credit score, and the state you reside in to instantly view loan companies available to accept your application online right now.

Advertiser Disclosure

We particularly recommend Avant for unsecured loans, OneMain for secured loans, and Peerform for peer-to-peer loans. All are reputable lenders willing to work with borrowers who have less-than-perfect credit.

Remember to keep your expectations realistic, however. You will undoubtedly receive higher interest rates than borrowers with good credit. And if your APR is truly sky-high, don’t be afraid to think outside the loan box about other ways to get the cash you need.

If your bad credit is symptomatic of deeper debt problems, you may also want to check out our series on debt management: Learn more about the Best Debt Management Companies, the Best Debt Settlement Companies, and the Best Debt Consolidation Loans.

Finally, if you’re reading this, you might be one of the 55 million Americans without an emergency fund. If disaster strikes and you have bad credit, you might need a bad credit loan to get back on your feet. With determination and a little bit of research, you can find decent options to borrow money with bad credit. At the same time, make sure you’re doing everything you can to boost your credit score and build your emergency fund so that you can get better loan rates in the future.

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