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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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We found 3 options from our lending partners

3 year loan

Best Egg

on Best Egg

Best Egg

4.0

NerdWallet rating 
Best Egg

4.0

NerdWallet rating 
APR 
6.0-30.0% 

Mo. payment 
$181 

Min. credit 
600 

on Best Egg


Min. credit

600

Qualifications

  • Minimum credit score: 600; borrower average is 700.

  • Minimum credit history: 3 years and 3 accounts.

  • Minimum income: No minimum income requirement; borrower average is $80,000. Borrower must have enough cash flow to cover current financial obligations.

  • Minimum debt-to-income ratio: 40% or 65% including a mortgage; borrower average is 40%.

  • Employment: Must provide proof of income; part-time employees are eligible.

  • Must provide valid U.S. address and Social Security number.

Pros

  • Competitive rates among fair-credit lenders.

  • Able to fund loans within one business day.

  • Secured loan option for homeowners.

Cons

  • Charges origination fee.

  • Does not offer direct payment to creditors with debt consolidation loans.

  • Borrowers can choose from only two repayment term options.

Disclaimer

*Trustpilot TrustScore as of June 2020. Best Egg personal loans, including the Best Egg Secured Loan, are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender. “Best Egg” is a trademark of Marlette Funding, LLC. "Best Egg Secured Loan" is a pending trademark of Marlette Funding, LLC. All uses of “Best Egg” refer to “the Best Egg personal loan”, “Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan” and/or "the Best Egg Secured Loan"as applicable. The term, amount and APR of any loan we offer to you will depend on your credit sc¬ore, income, debt payment obligations, loan amount, credit history and other factors. Your loan agreement will contain specific terms and conditions. About half of our customers get their money the next day. After successful verification, your money can be deposited in your bank account within 1-3 business days. The timing of available funds upon loan approval may vary depending upon your bank’s policies. Loan amounts range from $2,000– $50,000. Residents of Massachusetts have a minimum loan amount of $6,500 ; New Mexico and Ohio, $5,000; and Georgia, $3,000. For a second Best Egg loan, your total existing Best Egg loan balances cannot exceed $50,000. Annual Percentage Rates (APRs) range from 5.99%–29.99%. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0.99%–5.99% of your loan amount, which will be deducted from any loan proceeds you receive. The origination fee on a loan term 4-years or longer will be at least 4.99%. Your loan term will impact your APR, which may be higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest APR. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

Upstart

on Upstart

Upstart

4.5

NerdWallet rating 
Upstart

4.5

NerdWallet rating 
APR 
7.87-35.99% 

Mo. payment 
$191 

Min. credit 
580 

on Upstart


Min. credit

580

Qualifications

  • Minimum credit score: 580.

  • Minimum credit history: None, this lending platform accepts borrowers with credit history too limited to produce a FICO score.

  • Minimum gross income: $12,000.

  • Employment: Full-time job, full-time job offer starting in 6 months, a regular part-time job, or another source of regular income.

  • Must have U.S. residential street address where borrower resides (unless military personnel on active duty).

  • Must be at least 18 years old.

  • Valid email account required.

  • Personal bank account with U.S. routing number required.

Pros

  • Accepts borrowers new to credit.

  • Able to fund loans within one business day.

  • Offers direct payment to creditors with some debt consolidation loans.

Cons

  • Borrowers can choose from only two repayment term options.

  • Charges origination fee.

Disclaimer

The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 24.4% and 36 monthly payments of $36 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

LendingClub

on LendingClub

LendingClub

4.0

NerdWallet rating 
LendingClub

4.0

NerdWallet rating 
APR 
30.7% 

Mo. payment 
$214 

Min. credit 
600 

on LendingClub


Min. credit

600

Qualifications

  • Minimum credit score of 600. LendingClub uses FICO 8 credit scoring model.

  • Minimum credit history of three years.

  • Debt-to-income ratio of less than 40% for single applications, 35% combined for joint applicants.

Pros

  • Offers co-signed and joint loan options.

  • Offers direct payment to creditors with debt consolidation loans.

  • Soft credit check with pre-qualification.

Cons

  • Borrowers can only choose from two repayment term options.

  • Rates are high compared to other online lenders.

  • Charges an origination fee.

Disclaimer

A representative example of loan payment terms is as follows: you receive a loan of $13,411 for a term of 36 months, with an interest rate of 12.16% and a 5.30% origination fee of $711, for an APR of 15.99%. In this example, you will receive $12,700 and will make 36 monthly payments of $446.46. Loan amounts range from $1,000 to $40,000 and loan term lengths are 36 months or 60 months. Some amounts and term lengths may be unavailable in certain states. APR ranges from 8.05% to 35.89% and is determined at the time of application. Origination fee ranges from 3% to 6% of the loan amount. Lowest APR is available to borrowers with excellent credit. Advertised rates are subject to change without notice. Loans are made by LendingClub Bank, N.A., Member FDIC (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. Loans are subject to credit approval and sufficient investor commitment before they can be funded or issued. Certain information that we subsequently obtain as part of the application process (including but not limited to information in your consumer report, your income, the loan amount that your request, the purpose of your loan, and qualifying debt) will be considered and could affect your ability to obtain a loan from us. Loan closing is contingent on accepting all required agreements and disclosures at Lendingclub.com. “LendingClub” is a trademark of LendingClub Bank.


Bad Credit Loans: What You Need to Know

June 9, 2021

What is a bad-credit personal loan?

A bad-credit loan is a fixed-rate loan for borrowers with low credit scores. These personal loans are not backed by collateral. Instead, lenders consider your credit score, credit report and debt-to-income ratio.

Having a bad credit score (300-629 on the FICO scale) doesn’t automatically disqualify you from getting a personal loan, but it lowers your chances of approval. If you do qualify, you may get an interest rate at the high end of a lender’s range.

Bad-credit loans are often repaid in monthly installments, usually over one to five years. You can use the funds for almost any purpose, whether you need to cover a large expense or consolidate your debt.

Best bad-credit loan companies

Bad-credit lenders each have something different to offer borrowers. These lenders report loan payments to the credit bureaus, so your on-time loan payments can help you build credit.

  • Upgrade: Best for bad-credit debt consolidation loans.

  • Upstart: Best for borrowers with limited credit history.

  • Avant: Best for bad-credit loans with flexible payments.

  • LendingClub: Best for credit card consolidation loans for bad credit.

  • OneMain: Best for bad-credit secured and co-signed loans.

  • Universal Credit: Best for bad-credit loans with credit-building tools.

  • Oportun: Best for small bad-credit loans.

Bad-credit loan rates

Personal loans can have high rates for borrowers with low credit scores. Bad-credit borrowers can expect an annual percentage rate in the high 20s or 30s. Some lenders may consider what you’re using the funds for and the amount you request when calculating your rate.

Personal loan interest rates by credit score

How's your credit?

Score range

Estimated APR

Excellent

720-850

11.8%

Good

690-719

17.4%

Fair

630-689

23.4%

Bad

300-629

28.7% (Lowest scores unlikely to qualify.)

Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified in NerdWallet’s lender marketplace between Jan. 1, 2020, and Dec. 31, 2020. Rates are estimates only and not specific to any lender.

How to compare bad-credit loans

Borrower requirements

Many bad-credit lenders consider your credit score, but weigh it alongside other factors like your monthly cash flow, how steady your income is, your employment history and your other debts.

If a lender has a minimum credit score requirement, you’ll need at least that score — ideally a higher one — to borrow from them.

Cost

Bad-credit loans typically have high interest rates compared to good-credit loans, but you should still compare offers to find the most affordable loan. There are two important ways to measure the cost of a loan:

Annual percentage rate: A loan’s annual percentage rate is similar to its interest rate, but it also includes any fees a lender may charge, like an origination or prepayment fee. Most financial experts agree that affordable loans should have an APR below 36%.

Monthly payments: Measure a loan’s monthly payment against your budget to see if you can afford it. You can use a personal loan calculator to see your monthly payments on a personal loan with any rate and term. Many lenders also show you this information when you pre-qualify. If a loan’s monthly payments will overextend your budget, consider cheaper alternatives first.

Terms

Most personal loans have terms between two and seven years. Many bad-credit lenders let you choose a three- or five-year repayment term. A longer term will have lower monthly payments, but cost more in overall interest.

Speed

A bad-credit loan can be funded the same day you apply or it could take up to a week. During the approval process, a lender may ask you for more documentation, like W-2s and pay stubs. In that case, your loan’s funding time is also on you.

When you’re comparing offers, funding time shouldn’t outweigh affordability, but this information can help you choose between similar offers.

Credit building tools

If you have bad credit, consider choosing a lender that will help you understand and build your credit. Some lenders will share your FICO score with you for free and offer financial education to help you learn about ways to build credit.

How to get a personal loan with bad credit

Some online lenders cater specifically to people with bad credit. Consider these steps for getting a loan with bad credit:

  1. 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.

  2. Review your budget: It helps to know your monthly budget when you’re about to get a personal loan — that way you’ll know how much you can afford in monthly payments.

  3. Pre-qualify online: Pre-qualifying lets you see potential loan rate, amount and repayment term offers from multiple online lenders. The process involves a soft credit check, which does not impact your score.

  4. Consider a co-signed or secured loan: Adding a co-signer or collateral, like a vehicle, to the loan application can improve your chances of qualifying or get you a lower rate. If you can’t pay a co-signed loan, your co-signer will be on the hook for the funds. With a secured loan, the lender can take your collateral.

  5. Gather your documents: Most lenders will ask for your Social Security number, but some may ask for proof of employment or income. Gather things like tax documents, pay stubs and W-2s before you apply to speed up the process.

  6. 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 on-time payments on the personal loan.

Secured vs. unsecured bad-credit loans

Credit standards are typically higher for unsecured loans than they are for secured loans, so it may be easier to qualify for a secured loan if you have bad credit.

With an unsecured loan, the lender only uses information about you, like your credit profile and income, to decide whether to lend to you. But when you add collateral to an application, the risk to the lender tends to be lower — it has something of value to take if you don't make the loan payments.

Bank and credit unions that offer secured loans may let you use an account, like a CD or investment account, to secure the loan. Online lenders more often let you secure the loan with a vehicle.

Though adding collateral to the loan can help you qualify or get you a better rate, a lender can take the collateral if you fail to repay. Weigh the importance of getting the loan against the risk of losing your collateral.

How to manage your personal loan

As with any debt you take on, have a plan to pay off your personal 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 rate discounts to customers who use 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.

More bad credit loans


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.