Best Personal Loans for Bad Credit

 

Getting a personal loan with bad credit might feel like an uphill battle, but it’s far from impossible. Whether you're dealing with an unexpected emergency, trying to consolidate debt, or need extra funds for a big purchase, there are lenders out there who cater specifically to borrowers with less-than-perfect credit.

In this blog, we’ll cover the best personal loan options for bad credit, what to look for when comparing offers, how to avoid loan scams, and tips to boost your chances of approval — all without falling into a financial trap.

What Is Considered Bad Credit?

Before diving into lender options, it’s important to understand what “bad credit” means.

Generally, credit scores are categorized as follows:

• Excellent: 750 and above

• Good: 700–749

• Fair: 640–699

• Poor/Bad: Below 640

If your score is under 640, you’re typically considered a subprime borrower, meaning traditional banks may decline your application. However, many online lenders and credit unions specialize in loans for bad credit, often with flexible criteria and fast approval processes.

1. Upstart

💡 Best for: Non-traditional applicants (students, young borrowers)

Upstart stands out by using AI to evaluate more than just your credit score. It considers factors like education, job history, and earning potential, making it great for people with little to no credit history.

• Minimum Credit Score: 300

• Loan Amounts: $1,000 – $50,000

• APR Range: 6.4% – 35.99%

• Loan Terms: 3 or 5 years

• Funding Time: As soon as 1 business day

✅ Pros:

• Accepts low or no credit

• Quick funding

• Soft credit check for prequalification

❌ Cons:

• High origination fees (up to 12%)

2. OneMain Financial

💡 Best for: In-person service and secured loan options

OneMain Financial has no minimum credit score requirement and offers secured loans (with collateral), making it ideal for people with bad credit who want lower interest rates.

• Minimum Credit Score: None

• Loan Amounts: $1,500 – $20,000

• APR Range: 18% – 35.99%

• Loan Terms: 2 to 5 years

• Funding Time: 1–2 business days

✅ Pros:

• Available in all 50 states

• Secured and unsecured options

• Same-day or next-day funding

❌ Cons:

• Higher starting APR

• Requires in-person visit for some borrowers

3. Avant

💡 Best for: Quick access to smaller loans

Avant is a trusted name in the subprime lending space, offering fast personal loans with flexible requirements for borrowers with scores as low as 580.

• Minimum Credit Score: 580

• Loan Amounts: $2,000 – $35,000

• APR Range: 9.95% – 35.99%

• Loan Terms: 2 to 5 years

• Funding Time: 1 business day

✅ Pros:

• Transparent fee structure

• Fast approval and funding

• Mobile-friendly application

❌ Cons:

• Origination fee (up to 4.75%)

• Not available in all states

4. LendingPoint

💡 Best for: Fair-credit borrowers aiming to build credit

LendingPoint is designed for borrowers with fair to bad credit, using a combination of credit data and income to determine eligibility. It's a great option if your score is improving but still below 700.

• Minimum Credit Score: 600

• Loan Amounts: $2,000 – $36,500

• APR Range: 7.99% – 35.99%

• Loan Terms: 2 to 6 years

• Funding Time: As soon as next day

✅ Pros:

• Prequalification without hard credit pull

• Customized loan offers

• Reports to all major credit bureaus

❌ Cons:

• May charge an origination fee

• Lower max loan amount than some competitors

5. Upgrade

💡 Best for: Credit-building tools

Upgrade offers personal loans for borrowers with bad to fair credit, plus tools like free credit monitoring and budgeting tips to help improve your financial standing.

• Minimum Credit Score: 580

• Loan Amounts: $1,000 – $50,000

• APR Range: 8.49% – 35.99%

• Loan Terms: 2 to 7 years

• Funding Time: 1–4 business days

✅ Pros:

• Includes credit-building tools

• Joint applications allowed

• No prepayment penalty

❌ Cons:

• Origination fee (1.85% – 9.99%)

• Higher interest rates for lower scores

How to Avoid Loan Scams

When applying for a personal loan with bad credit, being cautious is critical. Desperate borrowers can become easy targets for predatory lenders. Here's how to avoid loan scams and protect yourself:

🚫 Red Flags to Watch Out For:

• No credit check at all: Legit lenders verify your ability to repay.

• Upfront fees before approval: Never pay fees before you’re funded.

• Unlicensed lenders: Always confirm the lender is registered in your state.

• Too-good-to-be-true offers: Unrealistically low interest rates are often a trap.

• High-pressure sales tactics: Reputable lenders give you time to review terms.

✅ Tips to Stay Safe:

• Read reviews and check the lender’s BBB rating

• Ensure the site uses HTTPS (secure)

• Never share banking info over unsecured channels

• Stick to known, licensed lenders like the ones listed above

Being informed is your best defense. Always take the time to research and understand any loan agreement before signing.

Tips to Improve Approval Odds

Even with bad credit, you can increase your chances of getting a better loan offer. Here’s how:

• Apply with a co-signer: Someone with better credit can reduce your interest.

• Pay down current debts: Improves your debt-to-income ratio.

• Review your credit report: Dispute errors and fix outdated info.

• Prequalify with multiple lenders: Compare offers with no impact on your credit.

Final Thoughts

Having bad credit doesn’t mean you're out of options. Personal loans for bad credit from lenders like Upstart, Avant, OneMain Financial, LendingPoint, and Upgrade offer legitimate paths forward — especially when you understand their terms and use borrowing as a tool to build a stronger financial foundation.

Just remember, always compare offers, read the fine print, and take the necessary steps to avoid loan scams. With the right personal loan and smart planning, you can take control of your finances and work toward rebuilding your credit — one payment at a time.