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Installment Loans for Bad Credit: Alternatives to Payday Loans

Installment loans for bad credit can be less risky and more affordable than payday loans. Some lenders offer installment loans without a credit check.

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An installment loan is a loan that you borrow all at once and repay in fixed monthly payments, or installments.

If you have a bad credit score (below 630), lenders that offer installment loans for bad credit will gather other information — including how much debt you have, your monthly transactions and how much money you make — to understand your financial behavior and help qualify you.

Payday lenders, however, usually don’t check your credit or assess your ability to repay the loan. To make up for that uncertainty, payday loans come with high interest rates and short repayment terms. Avoid this type of loan if you can.

Here’s a list of lenders that offer installment loans to people with bad credit. Some will check your credit score, while others won’t.

Summary of Installment Loans for Bad Credit: Alternatives to Payday Loans

Our picks for

Installment loans for bad credit

These online lenders accept lower scores and check your credit, debt, income and other factors that help them assess your ability to repay the loan. All offer different benefits depending on whether you want to finance a purchase, pay off debt, or even if you have no credit history.

Upgrade

on Upgrade's website

Upgrade

5.0

NerdWallet rating 
Upgrade

Min. Credit Score

580

Est. APR

7.99 - 35.97%

Loan Amount

$1,000 - $50,000

on Upgrade's website


Min. Credit Score

580

Key facts

Upgrade offers personal loans plus credit-building tools; you'll need strong cash flow to qualify.

Pros

  • Allows secured, co-signed and joint loans.

  • Offers rate discount with direct payment to creditors on debt consolidation loans.

  • Rate discount for autopay.

Cons

  • Charges origination fee.

  • Charges late fee.

Qualifications

  • Minimum credit score: 580.

  • Minimum annual income: None; average borrower income is $87,000.

  • Minimum credit history: 3 years.

  • Minimum number of accounts on credit history: 2.

  • Minimum monthly free cash flow: $800.

  • Maximum debt-to-income ratio: Varies between 55% and 65% including the loan you’re applying for and mortgage payments. To see your post-loan DTI, calculate your monthly payments on a personal loan, and then add them to your debt-to-income calculation.

  • Average loan amount is $10,000.

  • Average repayment term is 40 months.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2.9% to 8%.

Disclaimer

Personal loans made through Upgrade feature APRs of 7.99%-35.97%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's lending partners. Information on Upgrade's lending partners can be found at https://www.upgrade.com/lending-partners/. Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to 2 weeks to clear, depending on the creditor.
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Upstart

on Upstart's website

Upstart

4.5

NerdWallet rating 
Upstart

Min. Credit Score

580

Est. APR

6.16 - 35.99%

Loan Amount

$1,000 - $50,000

on Upstart's website


Min. Credit Score

580

Key facts

Upstart is a good option for those who have short credit histories and promising financial futures.

Pros

  • Accepts borrowers new to credit.

  • Able to fund loans within one business day.

  • Offers direct payment to creditors with some debt consolidation loans.

Cons

  • Borrowers can choose from only two repayment term options.

  • Charges origination fee.

Qualifications

  • Minimum credit score: 580.

  • Minimum credit history: none, this lender accepts borrowers with credit history too limited to produce a FICO score.

  • Minimum gross income: $12,000.

  • Employment: Full-time job, full-time job offer starting in 6 months, a regular part-time job, or another source of regular income.

  • Must have U.S. residential street address where borrower resides (unless military personnel on active duty).

  • Must be at least 18 years old.

  • Valid email account required.

  • Personal bank account with U.S. routing number required.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 0% - 8%.

  • Late fee: 5% of past due amount or $15, whichever is greater.

Disclaimer

1)This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website. 2) § Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5,100. The minimum loan amount in GA is $3,100. 3) ‡ The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 15% and 36 monthly payments of $33 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
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LendingPoint

on LendingPoint's website

LendingPoint

3.5

NerdWallet rating 
LendingPoint

Min. Credit Score

585

Est. APR

15.49 - 35.49%

Loan Amount

$2,000 - $25,000

on LendingPoint's website


Min. Credit Score

585

Key facts

LendingPoint accepts low credit scores and has flexible payments. Rates are high but comparable to competitors.

Pros

  • Soft credit check with pre-qualification.

  • Option to change your payment date.

  • Can fund a loan the business day after approval.

Cons

  • No co-signed or joint loan option.

  • Rates are high compared to other bad-credit and online lenders.

  • Reports payments to two of the three major credit bureaus.

Qualifications

  • Minimum credit score of 585; borrowers’ average is 670. LendingPoint uses the FICO 9 credit scoring model.

  • At least $35,000 in annual income; average customer earns $85,000.

  • Debt-to-income ratio of less than 40%; average customer is 15%.

Available Term Lengths

2 to 4 years

Fees

  • Origination fee: 0% - 6%.

  • Late fee: $30 after 15-day grace period.

Disclaimer

Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint's proprietary scoring and underwriting system's review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint's final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 34.99% APR, with terms from 24 to 48 months.
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OneMain

on OneMain Financial's website

OneMain Financial

4.0

NerdWallet rating 
OneMain

Min. Credit Score

None

Est. APR

18.00 - 35.99%

Loan Amount

$1,500 - $20,000

on OneMain Financial's website


Min. Credit Score

None

Key facts

OneMain is an option for bad-credit borrowers, but it comes with high starting rates and an origination fee.

Pros

  • Option to choose your payment date.

  • Offers joint and secured loans.

  • Able to fund a loan the same or next business day.

  • Offers online educational resources.

Cons

  • Rates are high compared to other online lenders.

  • Charges origination fee.

  • Does not offer direct payment to creditors on debt consolidation loans.

Qualifications

  • Minimum credit score: None.

  • Maximum debt-to-income ratio: None.

  • Minimum income: Not disclosed; average is $45,000.

Available Term Lengths

2 to 5 years

Fees

  • Origination fee: $25 to $400 or 1 - 10%

Disclaimer

Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Maximum annual percentage rate (APR) is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $400. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes. Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600. Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: Florida: $8,000. Iowa: $8,500. Maine: $7,000. Mississippi: $7,500. North Carolina: $7,500. New York: $20,000. Texas: $8,000. West Virginia: $14,000. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.
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Avant

on Avant's website

Avant

4.5

NerdWallet rating 
Avant

Min. Credit Score

580

Est. APR

9.95 - 35.99%

Loan Amount

$2,000 - $35,000

on Avant's website


Min. Credit Score

580

Key facts

Avant's low starting rates make it a good option for borrowers with low credit scores and income.

Pros

  • Able to fund loans within one business day.

  • Soft credit check with pre-qualification.

  • Option to change your payment date.

Cons

  • Charges origination fee.

  • No option to include co-signer.

Qualifications

  • Minimum credit score of 580.

  • At least $20,000 in gross annual income.

Available Term Lengths

2 to 5 years

Fees

  • Administrative fee: Up to 4.75%.

  • Late fee: $25 (most states).

  • Unsuccessful payment fee: $15 (most states).

Disclaimer

A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. Minimum loan amounts may vary by state. If approved, the actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. An administration fee of up to 4.75% will be deducted from the loan proceeds. Avant branded credit products are issued by Webbank, member FDIC
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Our picks for

Installment loans, no credit check

The following lenders do not check credit, and while rates are lower than payday lenders, they can still be high. Consider your alternatives before choosing one.

Oportun

on Oportun 's website

Oportun

Not yet rated

Oportun

Min. Credit Score

None

Est. APR

19.90 - 35.99%

Loan Amount

$300 - $10,000

on Oportun 's website


Min. Credit Score

None

Key facts

Oportun offers small loans at rates that are lower than payday loans, but still high. Fixed payments help you establish credit.

Pros

  • Soft credit check with pre-qualification.

  • Offers co-sign, joint and secured loan options.

  • Accepts borrowers new to credit.

  • Offers small loans starting at $300.

Cons

  • Available in a limited number of states.

  • Borrowers cannot choose or change their payment date.

  • Does not offer direct payment to creditors with debt consolidation loans.

  • Reports payments to two of the three major credit bureaus.

Qualifications

  • Valid identification.

  • Proof of income.

  • Proof of address.

  • Up to four references.

  • Be 18 years or older.

Available Term Lengths

6 to 46 months

Fees

Disclaimer

Loans subject to credit approval and may include an origination fee. Monthly payment options may not be available; Biweekly and semi-monthly payment options are standard. For example, a $5,000 loan in California would have 66 biweekly payments of $119 over 30 months at a 37.6% APR. Terms may vary by applicant and state and are subject to change. To apply, you must be at least 18 years old, must reside within our service area (AZ, CA, FL, ID, IL, MO, NJ, NM, NV, TX, UT and WI) and must not have applied for a loan with us during the past 90 days. While a prior credit history is not required to qualify, Oportun will request and consider credit checks for all applicants. California loans made pursuant to a California Financing Law License. For loans made in other states and for other information, visit oportun.com, which includes our state licenses. This is an advertisement for a consumer loan. ©2020 Oportun, Inc. All rights reserved.
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OppLoans
See my rates

on NerdWallet's secure website

OppLoans

3.0

NerdWallet rating 
OppLoans

Min. Credit Score

None

Est. APR

59.00 - 99.00%

Loan Amount

$500 - $4,000

See my rates

on NerdWallet's secure website


Min. Credit Score

None

Key facts

OppLoans offers no-credit-check small loans with fast funding but high rates. You may have cheaper options.

Pros

  • Option to change your payment date.

  • Able to fund loans within 1-2 business days.

Cons

  • Rates are high compared with other bad-credit lenders.

  • Short maximum repayment terms of up to 18 months in many states.

Qualifications

  • Minimum credit score: None required.

  • Minimum monthly gross income: $1,500.

  • Must be employed or receive benefits, like Social Security benefits. Borrowers cannot be self-employed.

  • Have a bank account in your name with 40 days of history.

  • Receive your paychecks through direct deposit.

  • Live in one of the states that OppLoans serves.

Available Term Lengths

0 month to 2 years

Fees

  • Origination fee: None.

Disclaimer

Not all applications are approved. Loan amounts range from $500 to $4,000 with annual percentage rates (APR) ranging from 59% to 99%. Loan lengths range from 6 to 24 months. Actual loan amounts and loan terms vary based on credit history, current income, ability to repay, and other factors. Example: A $1,000 loan repayable in 6 monthly installments with an APR of 99% would have monthly payments of $217.96. Loans may be issued by Opportunity Financial, LLC d/b/a OppLoans or one of our lending partners, depending on your state of residence. Personal loans issued by our lending partners are serviced by OppLoans. Information on the lending partners of OppLoans can be found at https://www.opploans.com/lending-partners/.
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Credit union installment loans for bad credit

If you have bad credit, consider turning to a credit union. Rates at federal credit unions are typically lower than online lenders — and they offer payday alternative loans geared toward bad-credit borrowers. You have to become a member of the credit union, but doing so may get you a loan specifically designed for your financial situation.

Credit unions generally use a hard credit pull to see if you qualify, which will temporarily knock a few points off your score.

First Tech Federal, Navy Federal and PenFed are options worth exploring if you have bad credit.

How to choose an installment loan

Compare rates. The most consumer-friendly personal loans come with annual percentage rates between 6% and 36%. For all unsecured personal loans, it’s helpful to compare rates at different lenders so that you can find the lowest rate for the amount you need. Many online lenders allow you to check your rate without affecting your credit score.

Understand fees. Some lenders charge an origination fee, which is usually 1% to 6% of the loan amount. Others charge a prepayment fee for repaying your loan early. Don’t agree to borrow money before the lender discloses all fees.

Choose a manageable term. The best repayment term is one that makes your monthly payments manageable. The longer your loan term, the more you’ll pay in interest. You can calculate your monthly payments based on the term length you choose, and then decide what would be manageable.

Explore lender perks. Some lenders offer features tailored to the reason you're borrowing money. If you're consolidating debt, some lenders will send the loan money to creditors on your behalf. Others may allow you to change your due date or offer a hardship plan if your financial picture changes.

Installment loans vs. payday loans

The defining characteristic of installment loans — that they’re paid in installments — doesn’t usually apply to payday loans. Here are some of the differences between installment and payday loans.

Installment loans

  • Repaid over the course of months or years.

  • APR of 36% or below, ideally.

  • Usually paid back online, over the phone or by check.

  • Usually require a credit check to assess your ability to repay the loan.

  • Report on-time payments to credit bureaus to help build your credit.

Payday loans

  • Repaid in full within a week or two — usually on your next payday.

  • APR can be as high as 300%.

  • Lenders withdraw the money from your bank account, using either a check you wrote ahead of time or your account information.

  • Do not require a credit check.

  • Do not report on-time payments to credit bureaus to help you build credit.

How installment loans affect your credit

Loans can help or hurt your credit, depending on how you use them. They give you the opportunity to improve your credit and show financial responsibility by making on-time payments. If you miss a payment or fail to repay the loan, however, your credit score could seriously suffer.

One way to make sure your payments are on time is to set up autopay. Many lenders offer an APR discount for borrowers that use autopay. For debt consolidation loans, some lenders send your payments directly to creditors so you don’t have to do it yourself.

Alternatives to installment loans for bad credit

If you have bad credit and need money quickly, take a moment to explore these low-cost options. Other lenders that offer payday or title loans might promise fast, painless approval, but you will end up paying much more in interest and fees.

Last updated on May 1, 2020

Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews.

To recap our selections...

NerdWallet's Installment Loans for Bad Credit: Alternatives to Payday Loans

  • Upgrade: Best for Installment loans for bad credit
  • Upstart: Best for Installment loans for bad credit
  • LendingPoint: Best for Installment loans for bad credit
  • OneMain Financial : Best for Installment loans for bad credit
  • Avant: Best for Installment loans for bad credit
  • Oportun : Best for Installment loans, no credit check
  • OppLoans: Best for Installment loans, no credit check

Frequently asked questions