Best Bad Credit Loans of May 2022
Bad-credit loans are one option for consumers with low credit scores. Before you get a bad-credit loan, consider cheaper alternatives, like borrowing from a family member or picking up a side gig.
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Bad-credit loans are available for consumers with low credit scores (roughly between 550 and 629 FICO). If that's you, you may qualify for a personal loan from a lender that specifically tailors its product for bad-credit borrowers. These lenders often provide a simple application process and fast funding, but the loans can have interest rates up to 36%.
The online lenders listed here accept borrowers with bad credit or thin credit histories and offer fast funding.
Bad-credit loans are available for consumers with low credit scores (roughly between 550 and 629 FICO). If that's you, you may qualify for a personal loan from a lender that specifically tailors its product for bad-credit borrowers. These lenders often provide a simple application process and fast funding, but the loans can have interest rates up to 36%.
The online lenders listed here accept borrowers with bad credit or thin credit histories and offer fast funding.
Best Bad Credit Loans From Our Partners
Lender | NerdWallet Rating | Est. APR | Loan amount | Min. credit score | Learn More |
---|---|---|---|---|---|
Upgrade Get rate on Upgrade's website | Best for Consolidating debt with bad credit | 5.44- | $1,000- | 560 | Get rate on Upgrade's website |
Upstart Get rate on Upstart's website | Best for Borrowers with limited credit history | 5.40- | $1,000- | None | Get rate on Upstart's website |
LendingClub Get rate on LendingClub's website | Best for Consolidating credit cards with bad credit | 6.34- | $1,000- | 600 | Get rate on LendingClub's website |
OneMain Financial Get rate on OneMain Financial's website | Best for Secured and co-signed loans for borrowers with bad credit | 18.00- | $1,500- | None | Get rate on OneMain Financial's website |
Universal Credit Get rate on Universal Credit's website | Best for Credit building tools for borrowers with bad credit | 8.93- | $1,000- | 560 | Get rate on Universal Credit's website |
![]() SeedFi Borrow & Grow Personal Loan Get rate on SeedFi's website | Best for Savings help for borrowers with bad credit | 7.42- | $1,200- | 520 | Get rate on SeedFi's website |
Our pick for
Consolidating debt with bad credit
Our pick for
Borrowers with limited credit history
Our pick for
Consolidating credit cards with bad credit
Our pick for
Secured and co-signed loans for borrowers with bad credit
Our pick for
Credit building tools for borrowers with bad credit
Our pick for
Savings help for borrowers with bad credit
» COMPARE: Find the right bad-credit loan for you
How to get approved for a bad-credit loan
Here are steps you can take to improve your application and potentially qualify for the loan you want.
Check your credit report. Is a credit reporting error keeping your credit score low? You can review your credit report for any incorrectly reported delinquencies or accounts that aren’t yours. Remedying these kinds of issues before you apply can improve your chances of qualifying.
Add a co-signer or co-borrower. Adding someone with better credit may boost your chances of qualifying since the lender will consider both applicants’ credit and income to make a decision. Keep in mind that whoever you add is on the hook for the loan if you fail to make payments.
» MORE: Find co-signed and joint loans
Add collateral. You may be approved more easily or get a lower rate with a secured loan. Online lenders like OneMain and Oportun let borrowers secure a loan with collateral — typically a vehicle — while credit unions and some banks offer loans secured with savings or CD accounts. If you can’t repay the loan, though, the lender can take the collateral.
How to choose a bad-credit loan
Here are five things to look for when comparing bad-credit loans:
Affordable rates: Look for a lender that caps rates at 36%, which is the maximum that consumer advocates consider to be affordable. There are online lenders that offer no-credit-check loans at rates above 36%, but we recommend you consider these only as a last resort, after you’ve ruled out alternatives. (See our list of alternatives below.)
Credit reporting: Find a lender that reports your payments to at least one of the three major credit bureaus. Ideally, a lender will report to all three, ensuring that on-time payments help you build credit and qualify for lower rates in the future.
Fast funding: If you need money quickly, an online loan may be your best option. Online lenders can often fund a loan the day after you’re approved, if not the same day. Some banks and credit unions may also fund a loan quickly if you’re already a customer.
Easy application: Online applications typically take a few minutes to complete. Pre-qualifying with an online lender can be a simple way to see your rates and loan terms without affecting your credit score.
Perks: Some lenders have features that help you build your credit, like free access to your credit score. A lender may also offer free financial education on their website.
About bad-credit loans: Rates, amounts, terms
Borrowers with bad credit can expect rates at the high end of a lender’s range. Most lenders have a minimum credit score requirement, but some weigh additional factors — like your monthly cash flow or occupation — when deciding how much to lend you and what rate to charge.
Rates
Annual percentage rates on personal loans generally range from 6% to 36%; rates on bad-credit loans can be above 20%. In 2020, bad-credit borrowers who pre-qualified for a personal loan using NerdWallet received APRs between 26.7% and 32.4%. The rate you get on a loan depends on many factors, not just your credit score.
Amounts
Personal loan amounts for consumers with low credit scores typically range from $1,000 to $50,000. Few online lenders offer loan amounts below $1,000, and not everyone qualifies for the largest loans. Borrowers with consistent income and a credit history of regular on-time payments may qualify for higher loan amounts.
Terms
To repay your loan, you typically make monthly payments over a period of two to five years. In some cases, a lender may allow bi-weekly payments. A longer term gives you lower monthly payments, but you’ll pay more interest over the lifetime of the loan.
Bad-credit loan example
A $2,000 loan with a 28.7% APR repaid over 12 months would require monthly payments of $194, according to NerdWallet’s personal loan calculator. You’d pay $328 in total interest on that loan.
» GET STARTED: Pre-qualify with multiple online lenders on NerdWallet
Alternatives to bad-credit loans
Personal loans are one option if you need fast cash, but you may have access to cheaper alternatives.
Friend or family loan: Borrowing from a friend or family member takes your credit score out of the equation. You can draw up a contract and agree to repayment terms. Try to discuss how you both can keep the relationship intact once you’ve mixed in money.
Charity or nonprofit: If you’re having a hard time covering everyday expenses like groceries, gas and housing — or if an expensive emergency comes up — a local charity may be able to help. These organizations may provide assistance with food or rent, or offer small, interest-free loans.
Credit-builder loan: If you’re trying to build credit and don’t need money right away, a credit-builder loan is a safe option. These loans are typically offered by credit unions and community banks and require you to have an income that supports monthly payments.
Side gig: There are legitimate ways to make extra cash, no matter how quickly you need it. From babysitting and selling your gently used clothes to becoming an influencer and creating for Etsy, you may be able to find another way to bring in extra money.
Lending circles: You can form a lending circle with a group of people you trust. Everyone contributes some amount of money, which is then pooled and distributed to one circle member every month or so. In some cases, contributions are reported to help build credit. It isn’t the fastest option, but it’s one way friends or family can help each other.
How to choose between bad-credit loan companies
Each lender offers something unique, so if you qualify for a similar rate with multiple companies, compare them to decide which loan you'll get the most out of.
Here's who each bad-credit lender is best for:
Upgrade is best for borrowers who:
Have fair or bad credit (689 or lower FICO).
Want to secure the loan or add a co-borrower to their application.
Are consolidating credit cards and other unsecured debts.
Need help building credit.
Upstart is best for borrowers who:
Have at least a 580 FICO score and strong earning potential.
Value fast funding and the ability to change the payment due date.
Don't need to manage their loan from a mobile app.
LendingClub is best for borrowers who:
Have fair credit (FICO of 630 to 689).
Want help building credit and managing their budget.
Want to consolidate other debts.
OneMain is best for borrowers who:
Have fair or bad credit (689 or lower FICO score).
Can add collateral or a co-borrower to the application, which can help lower your rate.
Need the funds fast.
Oportun is best for borrowers who:
Have limited or no credit history, but not bad credit.
Want to add a co-signer, co-borrower or secure the loan with a vehicle.
Live in one of the states where loans are available.
Universal Credit is best for borrowers who:
Have bad credit (629 or lower FICO) and a high debt-to-income ratio.
Are consolidating other high-interest debts.
Don’t want to add a co-signer or secure the loan with a vehicle.
Don't mind choosing a three- or five-year repayment term.
Last updated on May 2, 2022
Methodology
NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.
To recap our selections...
NerdWallet's Best Bad Credit Loans of May 2022
- Upgrade: Best for Consolidating debt with bad credit
- Upstart: Best for Borrowers with limited credit history
- LendingClub: Best for Consolidating credit cards with bad credit
- OneMain Financial : Best for Secured and co-signed loans for borrowers with bad credit
- Universal Credit: Best for Credit building tools for borrowers with bad credit
- SeedFi Borrow & Grow Personal Loan: Best for Savings help for borrowers with bad credit
Frequently asked questions
Upgrade: Best bad-credit loans for credit-building tools. Upstart: Best bad-credit loans for thin credit history. Avant: Best bad-credit loans for low credit scores. LendingClub: Best bad-credit loans for credit card consolidation. OneMain: Best bad-credit loans for secured and co-signed loans. Oportun: Best bad-credit loans for small loans.
Borrowers with credit scores between 550 and 629 FICO may qualify for a personal loan with a loan company that serves bad-credit borrowers. Having a bank account that shows consistent income and a credit history of consistent on-time payments to credit cards and other loans can help you qualify.
First, do what you can to build your credit, by fixing errors or catching up on late payments. Consider adding a co-signer with good credit, or securing your loan. It's always a good idea to pre-qualify to check the rate and loan amount you might get. Pre-qualifying should not affect your credit score.