Best Personal Loan for Bad Credit

How we picked the companies to evaluate:

NerdWallet reviewed and rated personal loan products offered by nine of the largest national banks based on asset volume, and by digital lenders and lending platforms that met these criteria: They cap interest rates at 36%, the maximum rate that is allowed by some states and considered affordable by consumer advocacy groups; they serve consumers in more than one state; and they are the top lenders by search volume. Some of the providers are NerdWallet partners, but this did not influence our selection of the winner.

How we chose the winner:

NerdWallet scored each provider in six categories and 28 subcategories. We weighted five of the categories in this way:
  • Features that affect affordability for consumers, including competitive rates, no origination fees, and rate discounts for autopayments and/or direct-to-creditor payments (30%).
  • Features that assess lenders’ underwriting and consumers’ eligibility, including affordability verification, pre-qualification with no impact to credit score, and loan options for consumers across credit bands (25%).
  • Features that give consumers flexibility, including options to change payment due dates; multiple loan types, amounts and terms; fast funding; hardship programs; and refinancing options (20%).
  • Features that enhance the consumer experience, including available and convenient customer support and mobile apps with loan servicing features (15%).
  • Features that offer consumers transparency in credit impact and loan product, including credit reporting; clearly presented rates, terms, fees and loan amounts; and comprehensive answers to common questions (10%).
The sixth category is unweighted and discretionary. A lender’s score may be lowered if it has faced governmental regulatory action in the past three years or been accused of predatory practices by a reputable source. A lender that offers a unique, consumer-friendly feature (outside of the scored categories above) that few others offer may earn a higher score.
To determine the award winner, we grouped lenders that cater to consumers with bad credit scores (roughly coinciding with a FICO score below 630). Within that group, the lender with the highest weighted score was the winner.

How we verified our data:

NerdWallet writers sent a comprehensive list of 50-plus questions to all loan companies we reviewed. We interviewed company representatives to better understand their products and confirm details. NerdWallet writers and editors cross-checked fees, rates and other features on each company's website. At least three writers and editors verified the scores and ratings we gave to lenders.