Best Loans for Bad Credit of May 2025

Bad-credit borrowers (those with a score below 630) have an easier chance qualifying for an Upgrade personal loan due to its low minimum credit score requirement and the ability to add a co-borrower or collateral to the loan. Wide ranges of loan amounts and repayment terms, as well as relatively low starting rates, make Upgrade ideal for most loan purposes.

Upstart says it considers loan applicants across the credit spectrum, including those with a thin credit file or no credit history. Its alternative underwriting model evaluates factors such as education and work experience, rather than relying heavily on credit score, to determine whether a borrower qualifies.

Universal Credit is owned by Upgrade, and borrowers get access to many of Upgrade’s features, including free credit score and credit monitoring. Universal Credit also offers a rate discount for enrolling in autopay, which lets borrowers save money in addition to maintaining on-time payments that can boost their credit scores.

Avant shines in its ability to approve and fund a loan the day after you apply, which is ideal if you need money quickly to cover an emergency or other urgent expense.

Best Egg offers two ways to get a secured loan: You can use a vehicle as collateral or household fixtures, such as cabinets and vanities. Both secured loan options come with lower rates than the lender’s unsecured personal loans.

You may have a tougher time qualifying for a personal loan with bad credit, but many lenders accept lower scores and weigh them equally with alternative factors. Narrow your search to lenders with credit score, income and other requirements you can meet.

A loan’s APR consists of the interest rate plus origination fees and is one of the best ways to compare loan costs. Your rate may be on the high end of a lender’s range, from about 20% to 36%.

Bad-credit loan amounts typically range from about $1,000 to $50,000, with repayment terms from two to seven years. Because lenders often view lower credit as added risk, your approved loan amount may be smaller than what you request.

Some lenders offer perks like rate discounts, fast funding or the ability to change a payment due date. These loan features can help you choose between two or more competitive offers.

Read online reviews from other borrowers, verify the lender’s state license and physical address to ensure the lender is providing fair, legal loans.

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 your credit reports for free on NerdWallet or at AnnualCreditReport.com.

In addition to your credit, lenders will consider the following on a loan application:

Check your monthly income and expenses to see what you can comfortably afford to pay toward a personal loan each month. A missed loan payment can damage your credit score even further, so take this chance to determine how much you can commit to paying.

Many lenders let you pre-qualify to preview potential loan offers without affecting your credit score. You provide some information about yourself, like your income, desired loan amount and loan purpose, and the lender does a soft credit pull — which doesn’t impact your score — to determine your potential loan rate, amount, repayment term and monthly payment. No two lenders have the same borrowing requirements, so it pays to pre-qualify with multiple lenders.

Once you’ve found the right lender, gather documents, including proof of income and employment, a government-issued ID and bank statements. Many 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 by a few points. If approved for the loan, you can usually expect to receive funds within a few days.

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.

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.

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 financial assistance programs lists resources in each state.

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.

“Buy now, pay later” is an at-checkout financing option that lets you split a purchase into smaller installments. It’s typically best for necessary purchases that will otherwise stretch your budget and if you have a plan to make the payments on time.

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. These apps can help bridge a temporary income gap, but be sure you can cover regular expenses when the advance is taken from your next paycheck to avoid falling into a debt cycle.