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Personal loans for bad credit
NerdWallet’s personal loans tool helps you compare bad credit loans and find a lender with flexible terms - looking beyond just your credit score.
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Bad credit loans: What to know
A bad credit score (300-629 on the FICO scale) doesn’t automatically disqualify you from getting a personal loan.
Some online lenders cater specifically to people with bad credit. These loan companies take into account your credit scores and credit history when deciding whether to lend you money, but they have looser requirements than banks and they may consider factors beyond your credit score.
However, interest rates at online lenders can be high if you have bad credit, with annual percentage rates typically above 20%.
What rate should I expect on a personal loan?
Rates vary from lender to lender and depend heavily on your credit history and ability to repay, but here is what interest rates on personal loans look like, on average:
| How's your credit? | Score range | Estimated APR |
|---|---|---|
| Excellent | 720 - 850 | 13.9% |
| Good | 690 - 719 | 18.0% |
| Fair | 630 - 689 | 21.8% |
| Bad | 300 - 629 | 27.2%; lowest scores unlikely to qualify |
Source: 2018 NerdWallet lender survey
How to get a bad credit loan
Check your credit report: Before you apply for a personal loan, check your credit report and address any errors that could be impacting your score. Bumping your credit several points can not only boost your chances of qualifying, but also get you a lower interest rate.
NerdWallet offers free access to your TransUnion credit report. You can also get a free report from each of the three big credit bureaus (the other two are Experian and Equifax) from AnnualCreditReport.com.
Visit a credit union: Personal loans from reputable online lenders are fast and convenient, but you may get a lower rate and more personalized service from a credit union. The maximum APR offered at federal credit unions is 18%.
Pre-qualify online: If you can’t get a loan through your local credit union, compare offers from multiple online lenders before signing any loan agreement. The easiest way to compare actual rates is to pre-qualify.
You can also use a personal loan calculator to see what rates may be available to you, based on your credit and the loan you want.
Submit an application: Applying for a loan can take anywhere from one business day to a week, and the process triggers a hard credit inquiry. That can temporarily hurt your credit score, but it should rebound over time as you make timely payments on the personal loan.
Managing your personal loan
As with any debt you take on, have a plan to pay off your personal loan. Follow these tips for managing your loan.
Update your budget: Follow a budget that divides your income into needs, wants, savings and debt to ensure timely monthly payments toward your personal loan.
Set up autopay: Setting up automatic payments ensures you’ll make them on time. Over time, this will help improve your credit score. Some lenders offer discounts to customers who set up autopay.
Keep in touch with the lender: If you lose your job or encounter a surprise expense and think you may fall behind on payments, contact the lender right away to work toward a solution. Some lenders offer hardship programs or will temporarily defer your payments and waive late fees until you get back on your feet.
Which lender is right for me?
NerdWallet has reviewed more than 25 lenders to help you compare and choose one that’s right for you. Below is a list of some of our most popular reviews. See our picks for best personal loans.
Here are reviews of lenders that offer personal loans for bad or fair credit:
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Disclaimers
Annual Percentage Rates (APR), loan term and monthly payments are estimated based on analysis of information provided by you, data provided by lenders, and publicly available information. All loan information is presented without warranty, and the estimated APR and other terms are not binding in any way. Lenders provide loans with a range of APRs depending on borrowers' credit and other factors. Keep in mind that only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend on factors like credit score, requested loan amount, loan term, and credit history. All loans are subject to credit review and approval.
