Best Online Installment Loans for Bad Credit of May 2022
Installment loans for bad credit can be less risky and more affordable than payday loans. Beware of those that don't check your credit or charge triple-digit interest rates.
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An installment loan is money you borrow all at once and repay in fixed monthly payments, or installments, over a period of months or years.
For borrowers with low or no credit profiles, some lenders offer installment loans for bad credit (a FICO score below 630). To see if you qualify for a personal installment loan, lenders gather information about you, like how much debt you have, your monthly transactions and your income.
Approach online installment loans with a skeptical eye. Some lenders, like the ones listed here, charge affordable rates and report payments to the major credit bureaus, which can help you build credit. But others charge triple-digit APRs and don't report payments.
Here’s a list of the best online lenders offering installment loans to people with bad credit.
Upgrade: Debt consolidation installment loans for bad credit.
Upstart: Bad-credit installment loans for borrowers with thin credit histories.
LendingPoint: Bad-credit installment loans with fast funding.
Universal Credit: Bad-credit installment loans with credit-building tools.
OneMain: Secured or co-signed bad-credit installment loans.
Oportun: Bad-credit installment loans with no credit score requirement.
An installment loan is money you borrow all at once and repay in fixed monthly payments, or installments, over a period of months or years.
For borrowers with low or no credit profiles, some lenders offer installment loans for bad credit (a FICO score below 630). To see if you qualify for a personal installment loan, lenders gather information about you, like how much debt you have, your monthly transactions and your income.
Approach online installment loans with a skeptical eye. Some lenders, like the ones listed here, charge affordable rates and report payments to the major credit bureaus, which can help you build credit. But others charge triple-digit APRs and don't report payments.
Here’s a list of the best online lenders offering installment loans to people with bad credit.
Upgrade: Debt consolidation installment loans for bad credit.
Upstart: Bad-credit installment loans for borrowers with thin credit histories.
LendingPoint: Bad-credit installment loans with fast funding.
Universal Credit: Bad-credit installment loans with credit-building tools.
OneMain: Secured or co-signed bad-credit installment loans.
Oportun: Bad-credit installment loans with no credit score requirement.
Best Online Installment Loans for Bad Credit
Lender | NerdWallet Rating | Est. APR | Loan amount | Min. credit score | Learn More |
---|---|---|---|---|---|
Upgrade Get rate on Upgrade's website | Best for Debt consolidation installment loans for bad credit | 5.44- | $1,000- | 560 | Get rate on Upgrade's website |
Universal Credit Get rate on Universal Credit's website | Best for Bad credit installment loans with credit building tools | 8.93- | $1,000- | 560 | Get rate on Universal Credit's website |
Upstart Get rate on Upstart's website | Best for Bad credit installment loans for borrowers with thin credit histories | 5.40- | $1,000- | None | Get rate on Upstart's website |
![]() LendingPoint Get rate on LendingPoint's website | Best for Bad credit installment loans with fast funding | 7.99- | $2,000- | 600 | Get rate on LendingPoint's website |
OneMain Financial Get rate on OneMain Financial's website | Best for Secured or co-signed bad credit installment loans | 18.00- | $1,500- | None | Get rate on OneMain Financial's website |
Oportun See my rates on NerdWallet's secure website | Best for Bad credit installment loans with no credit score required | 27.74- | $300- | None | See my rates on NerdWallet's secure website |
![]() SeedFi Borrow & Grow Personal Loan Get rate on SeedFi's website | Best for Bad credit installment loans that help build savings | 7.42- | $1,200- | 520 | Get rate on SeedFi's website |
Our pick for
Debt consolidation installment loans for bad credit
Our pick for
Bad credit installment loans with credit building tools
Our pick for
Bad credit installment loans for borrowers with thin credit histories
Our pick for
Bad credit installment loans with fast funding
Our pick for
Secured or co-signed bad credit installment loans
Our pick for
Bad credit installment loans with no credit score required
on NerdWallet's secure website
Oportun
Est. APR
27.74-Loan amount
$300-Min. credit score
Noneon NerdWallet's secure website
Our pick for
Bad credit installment loans that help build savings
Credit union installment loans for bad credit
In addition to online lenders, consider a credit union for installment loans if you have bad credit. Rates at federal credit unions are typically lower, and they offer payday alternative loans geared toward bad-credit borrowers.
You have to become a member to get a credit union loan. Generally, credit unions use a hard credit pull to see if you qualify, which will temporarily knock a few points off your score.
First Tech Federal and Navy Federal, as well as local credit unions, are options worth exploring if you have bad credit.
How to choose an installment loan
Compare annual percentage rates. A loan’s cost is often expressed as an annual percentage rate, which includes the interest rate plus any fees. Look for the lowest APR you can find — the most consumer-friendly personal loans have rates below 36%.
Understand fees. Some lenders charge an origination fee, which is usually 1% to 10% of the loan amount, or late fees. Don’t agree to borrow money before the lender discloses all fees.
Check monthly installments. You can calculate your monthly payments based on the term length you choose. The longer your loan term, the more you’ll pay in interest. Look for a repayment term short enough to avoid overpaying on interest but long enough to make the payments manageable.
Pre-qualify. One simple way to find out if you qualify for a bad-credit installment loan is to pre-qualify. During this process, you’ll fill out a short application with information about your income and the loan you want. The lender will do a soft credit pull, but your credit score won’t be affected. You’ll then see what rates, terms and loan amounts you may qualify for.
Bad-credit installment loans vs. payday loans
The defining characteristic of installment loans — that they’re paid in installments — doesn’t usually apply to payday loans. It also makes them safer than payday loans because borrowers can better manage smaller payments over time than a lump sum repaid all at once. Here are some of the differences between installment and payday loans.
Installment personal loans | Payday loans |
---|---|
Repaid over the course of months or years. | Repaid in full within a week or two — usually on your next payday. |
APR of 36% or below, ideally. | APR can be as high as 400%. |
Usually paid back online, over the phone or by check. | Lenders withdraw the money from your bank account, using either a check you wrote ahead of time or your account information. |
Usually require a credit check to assess your ability to repay the loan. | Do not require a credit check. |
Report on-time payments to credit bureaus to help build your credit. | Do not report on-time payments to credit bureaus to help you build credit. |
High-interest installment loans
Though you’ll ideally find an installment loan with a rate below 36%, some lenders offer installment loans with APRs above 36% that are more affordable than payday loans.
Lenders offering high-interest installment loans may not check your credit, which means they’re taking on more risk. For you, that means a higher APR, sometimes up to 150% or 200%.
OppLoans, for example, doesn’t check your credit via the three major credit bureaus, but instead looks at information from an alternative credit reporting service and your bank account to decide whether to lend you money. Its APRs are higher than other lenders that rely on traditional credit information.
While these loans may be repaid in installments, they are still unaffordable for most borrowers. Think of them as a last resort when your main alternative is a payday loan.
How installment loans affect your credit
Loans can help or hurt your credit, depending on how you use them. Since many lenders report to the three major credit bureaus, an installment loan gives you the chance 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 suffer.
One way to make sure your payments are on time is to set up autopay. Many lenders offer a small APR discount — usually a fraction of a percentage point — for borrowers who use autopay.
» MORE: How to manage your loan payments
Alternatives to bad-credit installment loans
If you have bad credit and need money quickly, explore other low-cost options.
Seek assistance from local nonprofits, charities and religious organizations.
Use a paycheck advance loan app to cover you until payday.
Try other ways to make money.
If you're comfortable with it, ask family and friends for a loan through lending circles or a loan agreement.
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 Online Installment Loans for Bad Credit of May 2022
- Upgrade: Best for Debt consolidation installment loans for bad credit
- Universal Credit: Best for Bad credit installment loans with credit building tools
- Upstart: Best for Bad credit installment loans for borrowers with thin credit histories
- LendingPoint: Best for Bad credit installment loans with fast funding
- OneMain Financial : Best for Secured or co-signed bad credit installment loans
- Oportun: Best for Bad credit installment loans with no credit score required
- SeedFi Borrow & Grow Personal Loan: Best for Bad credit installment loans that help build savings
Frequently asked questions
You can find installment loans at banks, credit unions and online lenders. Credit unions and online lenders with no or low credit score requirements may be the best options for bad-credit borrowers.
Here are our picks for online bad-credit installment lenders:
Upgrade.
Universal Credit.
Upstart.
LendingPoint.
Avant.
OneMain.
Oportun.
Credit score requirements generally range from 550 to 720 FICO, and some lenders have a lower credit score requirement than others. Borrowers with bad credit usually get higher APRs on personal loans.
You may find lenders offering no-credit-check loans, but beware of very high interest rates. Lenders that don’t check your credit and income can’t properly determine a fair rate for you and therefore charge rates of 100% or more.
An installment loan is a loan you receive in a lump sum and then repay over months or years. These loans come from banks, credit unions and online lenders. The defining feature of installment loans — that they’re repaid over time rather than all at once — helps make them more affordable than payday loans.