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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.


Easily compare real loan offers — not just ranges or estimates.

It's fast, free and won't affect your credit.

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We found 5 options from our lending partners

3 year loan

LendingClub

4.0

NerdWallet rating 
LendingClub

4.0

NerdWallet rating 
APR 
7.0-35.9% 

Mo. payment 
$190 

Min. credit 
600 

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 fair-credit 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 7.04% 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 and fees are valid as of 7/1/21 and 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.

Upstart

4.5

NerdWallet rating 
Upstart

4.5

NerdWallet rating 
APR 
7.84-35.99% 

Mo. payment 
$191 

Min. credit 
580 

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.

  • Allows borrowers to choose and change payment date.

Cons

  • Borrowers can choose from only two repayment term options.

  • Charges origination fee.

  • No mobile app to manage the loan.

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 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. 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.

LendingPoint

4.0

NerdWallet rating 
LendingPoint

4.0

NerdWallet rating 
APR 
24.75% 

Mo. payment 
$198 

Min. credit 
580 

Min. credit

580

Qualifications

  • Minimum credit score of 600; borrowers’ average is 670. LendingPoint uses the FICO 9 credit scoring model.

  • At least $20,000 in annual income; average customer earns $85,000.

  • Debt-to-income ratio of less than 40%; average customer is 15%.

Pros

  • Soft credit check with pre-qualification.

  • Option to choose and change your payment date.

  • Can fund a loan the business day after approval.

Cons

  • No co-signed, joint or secured loan option.

  • Rates are high compared to other bad-credit lenders.

  • Reports payments to two of the three major credit bureaus.

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

Disclaimer

Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint's proprietary scoring and underwriting system's review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint's final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 34.99% APR, with terms from 24 to 48 months.

Prosper Borrowers

3.5

NerdWallet rating 
Prosper Borrowers

3.5

NerdWallet rating 
APR 
32.0% 

Mo. payment 
$218 

Min. credit 
600 

Min. credit

600

Qualifications

  • Minimum credit score: 640; borrower average is 726.

  • Minimum credit history: 2 years.

  • Minimum income: No minimum income requirement; borrower average is $113,000.

  • Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 18% with housing payment.

  • No bankruptcies filed within the past year.

  • At least three open accounts on credit report.

  • Fewer than five credit bureau inquiries in the last six months.

  • Must be at least 18 years old.

  • Must provide Social Security number and a U.S. bank account.


Pros

  • Option to change your payment date.

  • Offers joint loan.

  • Offers wide range of loan amounts. 


Cons

  • No rate discount for autopay.

  • Charges origination and late fees.

  • Borrowers can choose from only two repayment term options.

Disclaimer

For example, a three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.90. A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 60 scheduled monthly payments of $222.39. Origination fees vary between 2.41%-5%. Personal loan APRs through Prosper range from 7.95% to 35.99%, with the lowest rates for the most creditworthy borrowers. Eligibility for personal loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All personal loans made by WebBank, Member FDIC.

Universal Credit

4.5

NerdWallet rating 
Universal Credit

4.5

NerdWallet rating 
APR 
34.99% 

Mo. payment 
$226 

Min. credit 
560 

Min. credit

560

Qualifications

  • Minimum credit score: 580.

  • Minimum number of accounts on credit history: 2 accounts.

  • Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.

Pros

  • Offers rate discount with direct payment to creditors on debt consolidation loans.

  • Option to change your payment date.

  • Offers free credit score access.

  • Offers a .5% rate discount for setting up autopay.

Cons

  • Charges origination fee.

  • No co-sign, joint or secured loan option.

Disclaimer

Personal loans made through Universal Credit feature APRs of 8.93%-35.93%. All personal loans have a 4.25% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 27.65% APR (which includes a 22.99% yearly interest rate and a 6% one-time origination fee), you would receive $9,400 in your account and would have a required monthly payment of $387.05. Over the life of the loan, your payments would total $13,933.62. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early.


Bad Credit Loans: What You Need to Know

Aug. 19, 2021

What is a bad-credit personal loan?

A bad-credit loan is a personal loan for borrowers with low credit scores. These loans have fixed rates and are repaid in fixed monthly installments. They are typically not backed by collateral — they're unsecured. Instead, lenders consider your credit score, credit report and debt-to-income ratio when deciding whether to lend you the money.

How a bad credit score affects your ability to get a loan

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 to pay for almost anything, including a home improvement project, medical bills or credit card consolidation.

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.

  • 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 on a personal loan application, but they 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. You can use this number to compare the cost of one personal loan to another or to compare it to other options, like credit cards. 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

Bad-credit loan repayment terms tend to fall between one and five years. A longer repayment term will get you a lower monthly payments, but be careful not to let it get too long. The longer your repayment term, the more you'll pay in total interest. Aim for a repayment term that keeps your monthly payments affordable, but helps you pay off the loan quickly.

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

Here are the steps to applying for a bad-credit loan:

  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 improve 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 apply for a personal loan — that way you’ll know how much you can afford to pay toward it each month.

  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: It can take anywhere from one business day to a week for a lender to review an application and fund a loan. The process triggers a hard credit inquiry, which can cause your score to dip, 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, 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.