Bad Credit Loans: Compare Top Lenders, Rates for March 2023
See if you pre-qualify for a personal loan – without affecting your credit score
Learn more about pre-qualifying
OneMain prioritizes a borrower’s ability to repay on a loan application. Rates are high, but this lender provides fast funding to borrowers with low credit scores.
On-time payments can get your credit profile off to a good start or help you recover from a mistake.
Here are 6 lenders for you
Compare the best bad-credit loans
NerdWallet has rated and reviewed personal loans from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives, go through lenders’ pre-qualification processes and compare lenders with each other as well as other financial products.
These are our picks for the best bad-credit loans.
Minimum credit score
Full APR range
Overall bad-credit loans.
8.24% - 35.97%.
$1,000 - $50,000.
Borrowers with limited credit history.
6.50% - 35.99%.
$1,000 - $50,000.
Secured and joint loans.
18.00% - 35.99%.
$1,500 - $20,000.
11.69% - 35.93%.
$1,000 - $50,000.
20.05% - 35.99%.
$300 - $12,000.
Midsize expenses and home improvement projects.
7.99% - 35.99%.
$2,000 - $36,500.
More about these lenders
NerdWallet’s guide to choosing the best personal loan for bad credit
A bad credit score (629 or lower) may not prevent you from getting a personal loan. In fact, you may receive loan offers from multiple lenders despite having a low credit score. The best bad-credit loan is usually the one with the lowest annual percentage rate, but there are other factors to consider when applying.
This guide will help you decide which personal loan is right for you and walk you through the steps to get one.
What is a bad-credit personal loan?
A bad-credit personal loan is for borrowers with low credit scores or thin credit histories. Lenders that offer bad-credit loans may accept borrowers with good or excellent credit scores (690 or higher) but have underwriting that’s flexible enough to accept those with low scores, too.
Like all personal loans, bad-credit loans have fixed rates and are repaid in fixed monthly installments over a period of two to seven years. Loan amounts range from about $1,000 to $50,000. These loans typically aren’t backed by collateral — they're unsecured.
Though you may qualify for a personal loan with bad credit, your rate will likely be on the high end of a lender’s range, and your approved loan amount may be smaller than what you request.
» LEARN MORE: What credit score do you need to get a personal loan?
How to choose a bad-credit loan
Qualification requirements and cost are the most important features to consider when choosing a personal loan. Here are some tips to compare bad-credit loans.
Check the lender’s borrowing requirements. Bad-credit lenders consider many factors on a loan application, including:
Credit score: If a lender has a minimum credit score requirement, you’ll need at least that score, but ideally a higher one, to qualify.
Debt-to-income ratio: This is the percentage of your monthly income that goes to debt payments. Lenders typically like to see that you can cover your monthly bills, including any other loan or credit card payments, and have money left over after your new personal loan payment.
Co-applicant and collateral: If the lender offers a co-signed or secured loan, the person or item you add to the application becomes a factor in deciding whether you qualify.
Review the annual percentage rate. A loan’s APR consists of the interest rate plus any fees a lender charges. Many bad-credit online lenders charge an origination fee — a percentage of the loan the lender takes from the loan amount — and it is included in the APR. The highest APR an affordable bad-credit loan should have is 36%, according to most consumer advocates.
Calculate the monthly payments. Review your budget to determine what an affordable monthly payment would be. Then, use a personal loan calculator to see what rate and repayment term you’d need to get that monthly payment.
Compare other loan features. If you have two or more competitive bad-credit loan offers, compare loan features like funding time, whether the lender provides credit-building assistance and if you’re allowed to change the payment date.
How to get a bad-credit loan
Here are the steps to get a bad-credit personal loan:
Check your credit. 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 them for free at AnnualCreditReport.com.
Pre-qualify to compare offers. Many lenders let you pre-qualify online to preview potential loan offers. You provide some information about yourself, like your income, desired loan amount and loan purpose, and the lender does a soft credit pull to determine your eligibility. No two lenders have the same borrowing requirements, so it pays to pre-qualify with multiple lenders.
Consider adding a co-signer or collateral. If you don’t get a good offer by pre-qualifying, consider strengthening the application with collateral or a co-signer. Some lenders won’t offer these options unless you fail to pre-qualify for an unsecured loan.
Submit an application. Once you’ve found the right lender, gather documents, including proof of income and employment, a government-issued ID and bank statements. Most 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. Expect a decision within a few days.
Add the new loan payment to your budget. On-time loan payments can build your credit. Add loan payments to your monthly budget and set up autopay to avoid missing any.
Where to get a bad-credit loan
Online: Some online lenders offer personal loans specifically for bad-credit borrowers. These lenders may consider information beyond your credit and income to qualify you, though those are still major factors in a loan decision.
At a credit union: Credit unions rely more on traditional information like credit and income but may also consider your history as a member. A member in good standing with the credit union may qualify for a personal loan despite a low credit score.
At a bank: Banks base loan decisions primarily on your credit score, history and income. Major banks are less flexible on qualification requirements, but having a good relationship with a local bank may help you qualify.
Even if your bank or credit union doesn’t have pre-qualification, you can bring in a pre-qualified offer and ask if it will beat that offer.
How does bad credit affect your ability to get a personal loan?
Bad credit may not automatically disqualify you from getting a personal loan, but you’re likely to get a loan with a higher rate.
Keep in mind that while credit is a top factor in determining your eligibility and rate, it’s not the only one lenders consider on an application.
What is a bad credit score?
A bad credit score is generally from 300 to 629, but individual lenders may define bad credit differently. Many lenders use the credit scoring company FICO, which defines poor credit as below 580. Some lenders use FICO’s competitor, VantageScore, which puts “subprime” scores between 300 and 600.
Bad-credit loans are intended for borrowers with scores on the high end of “bad” (think 560 and up). The lowest scores (below 500) are unlikely to qualify.
» LEARN MORE: What credit score do you need to get a personal loan?
Bad-credit loan rates
Lenders consider bad-credit loans to be risky, and they charge high rates to make up for that risk.
Here are average personal loan rates for each credit score range.
How's your credit?
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified in NerdWallet’s lender marketplace from July 1, 2022, to Oct. 31, 2022. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below a 500 credit score — are unlikely to qualify. Information in this table applies only to lenders with APRs below 36%.
6 types of bad-credit loans
The most common type of personal loan is unsecured with fixed rates and payments. Other loans are available to bad-credit borrowers, such as joint and “buy now, pay later” loans. Compare loan types to find the right one for your situation.
Unsecured personal loans
An unsecured loan doesn’t require collateral. Instead, a lender determines whether you qualify based on factors like your credit score, income and cash flow.
It may be difficult for bad-credit borrowers to qualify for an unsecured loan because many banks, credit unions and online lenders weigh credit scores heavily when approving this type of loan.
Secured personal loans
Credit standards are typically lower for secured loans, which require collateral, so it may be easier to qualify if you have bad credit.
Adding collateral to an application lowers the lender’s risk because it has something valuable to take if you don't repay the loan. Banks and credit unions usually accept a savings or investment account as collateral, while online lenders often accept a vehicle.
Though it may be easier to qualify or get a lower rate on a secured loan, weigh the importance of getting the loan against the risk of losing your collateral.
» MORE: Best secured personal loans
Co-signed personal loans
A co-signer with better credit and higher income may improve your chances of qualifying for a loan or get you a lower rate. Having a co-signer tells the lender that if you don’t make the loan payments, someone else likely will.
A co-signer doesn’t have access to the loan funds or information about your payments. If you fail to make a payment, both of your credit scores will be affected.
» MORE: Personal loans with a co-signer
Joint personal loans
A joint personal loan is one that you get with another person. It works similarly to a co-signed loan: The lender usually considers both borrowers’ credit and income on an application.
Once approved, both borrowers are equally responsible for repayment, and both borrowers have access to the loan funds and payment information.
Buy now, pay later
“Buy now, pay later” companies like Affirm and Afterpay let consumers split a purchase into smaller installments.
These companies don’t do a hard credit pull, so consumers with bad credit may often qualify. BNPL can help you cover an urgent purchase, but it’s best to wait until you’ve paid off one purchase before using it on another.
Cash advance apps
A cash advance app lets you borrow a few hundred dollars from your next paycheck before you receive it. These apps typically don’t consider your credit score when you request an advance. Instead, they review deposits and expenses in your bank account to determine whether you qualify for an advance.
They often withdraw repayment on your following payday. These apps may charge fees for things like subscriptions or fast funding, and most ask you to tip them for the service.
Alternatives to high-interest loans for bad credit
High-interest lenders offer payday, pawn, car title and expensive installment loans to consumers with bad credit. They tout fast applications and no credit checks, but the loans can be difficult to repay and may damage your finances.
If you can’t qualify for a bad-credit loan with a low interest rate, here are some alternatives to consider.
Family loan: 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.
Payment plan for bills: 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.
Local nonprofits or charities: For help meeting basic needs, consider a local food shelter, religious organization or nonprofit. Some organizations can provide food, clothing or bus tickets. NerdWallet’s database of local payday loan alternatives lists resources in each state.
Medical bill assistance: 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.
How to spot a bad-credit loan scam
The lenders on this page offer legitimate personal loans. Here are a few red flags to look out for when you're shopping for a bad-credit loan.
No credit check or guaranteed approval. Reputable lenders dig into your finances, including your credit and income, to determine whether you can repay the loan. A lender that doesn't do this may charge exorbitant rates that could land you in a debt trap.
No state license. The Federal Trade Commission requires lenders to register in states where they do business. Many lenders list state licenses on their websites.
Asking for a gift card. No legitimate lender asks for a gift card in exchange for a loan. If you're asked to provide a gift card — even by someone who says they work for a popular lender — consider it a scam.
No fee disclosures. The Truth in Lending Act requires lenders to disclose the loan's APR, total interest and total repayment amount before you sign a loan agreement. Ask to see this information before signing and walk away if the lender refuses.
NerdWallet’s personal loan rating methodology
NerdWallet writers and editors conduct a full fact check of our personal loan ratings and reviews 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. We do not receive compensation for our ratings. Read more about our personal loan star ratings methodology and our editorial guidelines.
Here are the steps to get a personal loan with bad credit:
Check your credit report and fix any errors that are dragging your score down.
Compare bad-credit lenders.
Pre-qualify to check your rate and loan amount.
Gather documents, such as W-2s, pay stubs and your Social Security number.
Adding collateral, like a car or savings account, or a co-applicant may improve your chances of qualifying for a personal loan with bad credit.
Credit unions and online lenders offer personal loans for bad credit (credit scores below 630).
Federal credit union personal loan rates may be low for bad-credit borrowers. These organizations look beyond your finances and income and consider your standing as a member.
Some online lenders have low minimum credit score requirements, accept borrowers with limited credit history or consider other factors like employment and education.
Payday, car title, pawnshop and other high-interest installment loans are the easiest to get with bad credit, but they can do long-term damage to your credit and finances. Reputable online lenders may accept bad-credit borrowers or those with thin credit histories.
The best bad-credit loan is one that you can repay on time and has an APR below 36%.
About the author: Annie Millerbernd is a personal loans writer. Her work has appeared in The Associated Press and USA Today.
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.