Best Bad Credit Loans
Min. credit score
Best for Overall bad credit loans
Best for Thin credit
Best for Low fees
Best for Fast funding
Best for Credit-building tools
Our pick for
Overall bad credit loans
Our pick for
Our pick for
Our pick for
Our pick for
Compare bad credit lenders
Upgrade: Best overall bad credit loans
Why it made the list: Upgrade has a low minimum credit score requirement and low starting rates — a somewhat rare combination. These loans come with credit-building tools, flexible repayment terms and special features for debt consolidation and home improvement projects.
» MORE: Read NerdWallet's Upgrade review
Upstart: Best bad credit loans for thin credit
Why it made the list: Upstart is known for its advanced underwriting capabilities. The lender looks beyond traditional borrower information like credit and income and reviews alternative data, like education and work history, to qualify borrowers.
» MORE: Read NerdWallet's Upstart review
Prosper: Best bad credit loan with low fees
Why it made the list: Prosper is a peer-to-peer lender that charges low interest rates and fees compared to other bad-credit lenders. This lender has a low minimum credit score and a joint loan option, which may improve your chances of qualifying or getting a low rate.
» MORE: Read NerdWallet's Prosper review
Universal Credit: Best bad credit loan with credit-building tools
Why it made the list: Universal Credit borrowers have access to a credit report summary, credit score simulator and personalized recommendations for borrowers to build credit. The lender is owned by Upgrade, but bad-credit borrowers may be more likely to get approved with Universal Credit.
Avant: Best bad credit loan for fast funding
Why it made the list: Avant can approve a loan application within one business day and typically funds loans the day after approval. The lender requires a minimum credit score of 550 and a minimum monthly net income of $1,200.
» MORE: Read NerdWallet's Avant review
What are bad credit loans?
A bad credit personal loan is for borrowers with low credit scores or thin credit histories. Lenders that offer bad credit loans may accept borrowers with good or excellent credit scores (690 or higher) but have underwriting that’s flexible enough to accept those with low scores, too. Loan amounts range from about $1,000 to $50,000 and annual percentage rates are capped at 36%.
How do bad credit personal loans work?
Like all personal loans, bad credit loans have fixed rates and are repaid in fixed monthly installments over a period of one to seven years. These loans typically aren’t backed by collateral — they're unsecured.
Though you may qualify for a personal loan with bad credit, your rate will likely be on the high end of a lender’s range, and your approved loan amount may be smaller than what you request.
» LEARN MORE: What credit score do you need to get a personal loan?
How to compare bad credit loans
Qualification requirements and cost are the most important features to consider when choosing a personal loan. Here are some tips to compare bad credit loans.
1. Check the borrowing requirements
Bad-credit lenders consider many factors on a loan application, including:
Credit score: If a lender has a minimum credit score requirement, you’ll need at least that score, but ideally a higher one, to qualify.
Debt-to-income ratio: This is the percentage of your monthly income that goes to debt payments. Lenders typically like to see that you can cover your monthly bills, including any other loan or credit card payments, and have money left over after your new personal loan payment.
Co-applicant and collateral: If the lender offers a co-signed or secured loan, the person or item you add to the application becomes a factor in deciding whether you qualify.
2. Review the annual percentage rate
A loan’s APR consists of the interest rate plus any fees a lender charges. Many bad-credit online lenders charge an origination fee — a percentage of the loan the lender takes from the loan amount — and it is included in the APR. The highest APR an affordable bad credit loan should have is 36%, according to most consumer advocates.
3. Calculate the monthly payments
Review your budget to determine what an affordable monthly payment would be. Then, use a personal loan calculator to see what rate and repayment term you’d need to get that monthly payment.
4. Compare other loan features
If you have two or more competitive bad credit loan offers, compare loan features like funding time, whether the lender provides credit-building assistance and if you’re allowed to change the payment date.
What is the best loan company for bad credit?
No single lender is best for all bad-credit borrowers. Typically, the best bad-credit lender offers the lowest annual percentage rate and monthly payments that fit your budget. Some bad-credit lenders have special features for debt consolidation, provide flexible payment options or offer credit-building tools.
Where to get a bad credit loan
Online: Some online lenders offer personal loans specifically for bad-credit borrowers. These lenders may consider information beyond your credit and income to qualify you, though those are still major factors in a loan decision.
At a credit union: Credit unions rely more on traditional information like credit and income but may also consider your history as a member. A member in good standing with the credit union may qualify for a personal loan despite a low credit score.
At a bank: Banks base loan decisions primarily on your credit score, history and income. Major banks are less flexible on qualification requirements, but having a good relationship with a local bank may help you qualify. Even if your bank or credit union doesn’t have pre-qualification, you can bring in a pre-qualified offer and ask if it will beat that offer.
Bad credit loan rates and fees
Lenders consider bad credit loans risky and charge high rates, sometimes with additional fees, to make up for that risk.
Bad credit loan rates
Here are the average personal loan rates for each credit score range.
Borrower credit rating
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified in NerdWallet’s lender marketplace from Aug. 1, 2023, through Aug. 31, 2023. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum APRs below 36%.
Bad credit loan fees
One of the most common bad credit loan fees is an origination fee, which is 1% to 10% of the loan amount. The fee is included in your APR, but a lender typically takes it before sending you the funds, effectively reducing your loan amount.
A two-year, $10,000 loan with a 20% interest rate and a 5% origination fee has an APR of 25.14%. You’d receive $9,500 and the lender would keep $500 for the origination fee.
Lenders also usually charge late payment and non-sufficient funds fees.
Compare bad credit loan costs
8.49% - 35.99%.
1.85% to 9.99%.
4.60% - 35.99%.
0% to 12%.
6.99% - 35.99%.
1% to 5%.
11.69% - 35.99%.
5.25% to 9.99%.
9.95% - 35.99%.
0% to 4.75%.
How to get a bad credit loan
Here are the steps to get a bad credit personal loan:
1. Check your credit
Review your credit reports from the three major credit bureaus to ensure the information is accurate and up to date. Fixing errors on your report before applying may improve your chances of qualifying. You can get them for free at AnnualCreditReport.com.
2. Pre-qualify to compare offers
Many lenders let you pre-qualify online to preview potential loan offers. You provide some information about yourself, like your income, desired loan amount and loan purpose, and the lender does a soft credit pull to determine your eligibility. No two lenders have the same borrowing requirements, so it pays to pre-qualify with multiple lenders.
3. Submit an application
Once you’ve found the right lender, gather documents, including proof of income and employment, a government-issued ID and bank statements. Most lenders have online personal loan applications, but your local bank or credit union may require an in-person application. The lender will do a hard credit check when you apply, causing your score to temporarily drop. Expect a decision within a few days.
4. Add the new loan payment to your budget
On-time loan payments can build your credit. Add loan payments to your monthly budget and set up autopay to avoid missing any.
Tips to qualify for a bad credit loan
Bad-credit borrowers may need to put in extra work to boost their chances of qualifying or lower their rate. Here are some ways to enhance your personal loan application.
Add collateral. Some lenders offer secured personal loans, which require you to provide collateral in order to borrow the money at a lower rate than an unsecured loan would have. Online lenders typically accept a vehicle as collateral, while banks and credit unions accept a savings or investment account. If you miss too many payments, the lender can take the collateral.
Add a co-applicant. Co-signed and joint personal loans let you add someone with better credit and income to your application to get approved or lower your rate. A co-signer or co-borrower agrees to repay the loan if you can’t, but a co-borrower has access to the loan funds while a co-signer does not. Your co-applicant must make the loan payments if you fail to.
Include all your income. Many lenders accept income from employment, alimony, retirement, child support and social security payments. Showing a lender that you have enough income to make the payments is crucial to approval, so be sure to include all sources of income when you apply.
Don’t ask for more than you need. Asking for a smaller loan won’t guarantee approval, but the larger your requested loan, the riskier it may look to a lender. Requesting a loan amount you can comfortably repay goes a long way with a lender.
Can you get a personal loan with bad credit?
Bad credit may not automatically disqualify you from getting a personal loan, but you’re likely to get a high rate.
Keep in mind that while credit is a top factor in determining your eligibility and rate, it’s not the only one lenders consider on an application.
What is a bad credit score?
A bad credit score is generally from 300 to 629, but individual lenders may define bad credit differently. Many lenders use the credit scoring company FICO, which defines poor credit as below 580. Some lenders use FICO’s competitor, VantageScore, which puts “subprime” scores between 300 and 600.
Bad-credit loans are intended for borrowers with scores on the high end of “bad” (think 560 and up). The lowest scores (below 500) are unlikely to qualify.
» LEARN MORE: What credit score do you need to get a personal loan?
Types of bad credit loans
Type of bad credit loan
When to use
An unsecured loan doesn’t require collateral. Instead, a lender determines whether you qualify based on factors like your credit score, income and cash flow.
A secured loan requires you to pledge collateral — usually a vehicle or bank account — to borrow money.
A co-signed loan requires someone to vouch for your ability to repay the loan.
A joint loan is one you get with another person, meaning they share responsibility for payments and can access the funds.
“Buy now, pay later” is an at-checkout financing option that lets you split a purchase into smaller installments.
A cash advance app gives you an advance up to a few hundred dollars and withdraws repayment — plus any tips and fees — on your next payday.
Alternatives to high-interest loans for bad credit
High-interest lenders offer payday, pawn, car title and expensive installment loans to consumers with bad credit. They tout fast applications and no credit checks, but the loans can be difficult to repay and may damage your finances.
If you can’t qualify for a bad credit loan with a low interest rate, consider these alternatives to high-interest loans.
Borrow from a trusted friend or family member. It may help to have a plan for interest, repayment terms and payment frequency in mind when you ask for the loan. Then you and the lender can formalize the details in a family loan agreement.
Payment plan for bills
If you’re struggling to cover rent, utilities or credit card payments, consider asking for an extension or getting on a hardship program. Your credit card issuer, mortgage lender or utility company’s website may have an online application for hardship assistance, but you may have to ask a landlord directly.
Local nonprofits or charities
For help meeting basic needs, consider a local food pantry, religious organization or nonprofit. Some organizations can provide food, clothing or bus tickets. NerdWallet’s database of local payday loan alternatives lists resources in each state.
Medical bill assistance
Medical bill negotiators, medical credit cards or a payment plan with your provider may help take some of the stress and urgency out of paying a steep medical bill. These options may come with fees or interest, so compare medical bill payment options to find the most affordable one.
How to spot a bad-credit loan scam
The lenders on this page offer legitimate personal loans. Here are a few red flags to look out for when you're shopping for a bad credit loan.
No credit check or guaranteed approval. Reputable lenders dig into your finances, including your credit and income, to determine whether you can repay the loan. A lender that doesn't do this may charge exorbitant rates that could land you in a debt trap.
No state license. The Federal Trade Commission requires lenders to register in states where they do business. Many lenders list state licenses on their websites.
Asking for a gift card. No legitimate lender asks for a gift card in exchange for a loan. If you're asked to provide a gift card — even by someone who says they work for a popular lender — consider it a scam.
No fee disclosures. The Truth in Lending Act requires lenders to disclose the loan's APR, total interest and total repayment amount before you sign a loan agreement. Ask to see this information before signing and walk away if the lender refuses.
How we chose the best bad credit loans
We compared more than a dozen lenders that require a minimum credit score of 620 or lower to choose the best personal loans for bad credit. Only lenders with APRs below 36% were considered for this list. Here are the other factors we considered.
Credit score of average approved borrower.
Flexibility in repayment terms.
Co-signed, joint or secured loan offerings.
Last updated on September 1, 2023
NerdWallet’s review process evaluates and rates personal loan products from more than 35 technology companies and financial institutions. We collect over 50 data points from each lender and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. 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. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. 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.
NerdWallet's Best Bad Credit Loans of September 2023
Frequently asked questions
- What is the best loan company for bad credit?
Our picks for the best bad credit loans are from these loan companies:
- Can I get a loan with bad credit?
Borrowers with credit scores between 550 and 629 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 showing on-time payments to credit cards and other loans can help you qualify.
- What is the easiest way to get a loan with bad credit?
First, 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 does not affect your credit score.
- How can I get a loan for bad credit?
- Where can I get a loan for bad credit?
Credit unions and online lenders offer personal loans for bad credit (credit scores below 630).
Federal credit union personal loan rates may be low for bad-credit borrowers. These organizations look beyond your finances and income and consider your standing as a member.
Some online lenders have low minimum credit score requirements, accept borrowers with limited credit history or consider other factors like employment and education.
- What’s the easiest loan to get with bad credit?
Payday, car title, pawnshop and other high-interest installment loans are the easiest to get with bad credit, but they can do long-term damage to your credit and finances. Reputable online lenders may accept bad-credit borrowers or those with thin credit histories.
The best bad-credit loan is one that you can repay on time and has an APR below 36%.