Best Bad Credit Personal Loans

People with bad credit find it difficult to get approval for a personal loan, which is frustrating since they need funds. Having a bad credit score would decrease the probability of getting a personal loan approval since it vividly shows your financial situation. Lenders consider bad credit personnel a risky investment and granting them the loan may result in default payments. That is why lenders are unsure of taking on an investment from which they may not yield profit in terms of interest.

With the help of bad credit loans, people can get cash when they require funds, which means that lenders would not necessarily turn people away. Some lenders specialize in providing individuals with bad credit loans because they are familiar with the credit rating the need of such people. The market for bad credit loans has increased, with several lenders offering personal loans to people with bad credit.

Bad credit personal loans can serve a borrower’s needs in different ways, including paying for emergency bills, paying a payment to prevent default and other unexpected expenses that may surface. People use personal loans to renovate a house or part of their house. Hence, lenders would consider your application and provide you with the financial assistance you need.

Several lenders in the industry understand that living with a poor credit score can get very tiresome, which results from past unfortunate incidents that negatively impact the credit rating. Lending companies acknowledge that some factors may not be in the person’s control, which gives rise to frustration, so some lenders are known to provide bad credit personal loans to people.

This guide will help you understand the basics of bad credit personal loans. We will also look at the factors a person should consider before selecting a bad credit loan company. The article will discuss specific scams that people should avoid for bad credit loans. We will discuss the best bad credit personal loans in the industry.

Let us look at the fundamentals of bad credit personal loans.

What is a Bad Credit Personal Loan?

When a person applies for a loan, the lenders assess their creditworthiness and determine the risk they possess if the lender were to grant a personal loan to them. For each lender, the criteria to evaluate the individuals are different. But most lenders use the FICO or Vantage scoring models to determine a person’s credit score. They look at under which range the score follows to understand their financial situation better.

Since the lender is taking on additional risk by granting the borrower who has poor credit a personal loan, the loans’ terms and conditions are relatively unfavourable compared to other loans. For instance, the lender will charge the borrowers a high-interest rate on bad credit personal loans. This means the borrower will pay an increased interest amount which will substantially exceed the principal loan amount.

Moreover, bad credit personal loans have higher APRs, interest amounts, and other hidden charges, including processing fees, origination fees, late fee penalties, etc. Hence, a borrower’s overall cost will be comparatively high under unfavourable conditions than other loan types or people with good credit scores.

Bad credit personal loans come with short terms, which means the borrower will pay them off in less than 12 months due to the repayment period. Personal loans for bad credit personal come in secured or unsecured loans. For secured personal loans, the person would need to deposit some as collateral, including a home or a car. Unsecured loans do not need any collateral.

What is Considered a Bad Credit Loan?

In the previous section, we looked at the fundamentals of bad credit loans. Here, we will discuss bad credit loans from a numerical perspective to compare good and bad credit. 

People applying for bad credit personal loans would have credit scores south of the average score range on the FICO scale. The average credit score range is between a radius of 640 to 699, where any score falling below 640 would be considered poor. Although each lender has their set criteria from which they determine the creditworthiness of a person, the general range they all follow is:

Poor Credit Score

Poor credit score individual has bad creditworthiness where the score rating is less than 579, which means that they have a lot of credit that needs to be written off. People with this form of credit score face difficulties qualifying for a loan unless they apply for poor personal loans from a lender offering such loans.

Sometimes people take the help of a co-signer that agrees to vouch for the individual that they would pay back the loan in full on time. With the help of a co-signer, the interest rate on loans and APRs are reduced, which means they would need to pay less interest payment. A co-signer should be selected with a good credit score and a reputation to pay bills promptly.

Fair Credit Score

A fair credit score is the average creditworthiness of most individuals that fall in the radius of 580-669 on a scoring model such as FICO or Vantage. Many people fall in this range and can qualify for a personal loan with greater convenience. Despite the better creditworthiness than the prior category, people would still need to pay high-interest rates unless they take the help of a co-signer that would aid in helping them pay back the loan.

For lenders, the most important thing to consider before granting the loan is that can the borrower be trusted to pay back the loan amount in full. And since the borrower is a person who is new to the creditor, they take the help of credit reports to know about the person’s financial history to see how they handle their finances. If everything is good, the lender will approve the loan. However, there are occasions when the borrower has poor credit but has a co-signer that has a good credit rating and can be trusted. So the co-signer mitigates the risk for the lender.

Good Credit Score

Individuals with good credit scores are better off than those in the poor or fair credit score range. People with good credit scores get favourable terms and conditions on their loans or other forms of credit. A good credit score falls from 670 to 739 on most lenders’ scoring models. The interest rates that fall for good credit score individuals are relatively lower than others.

Individuals with good credit ratings don’t need a co-signer as their creditworthiness speaks for themselves. A co-signer is only necessary to improve your chances of getting a loan. So it is not essential to have one if your credit score falls in the 670 to 739 range. However, people still like to apply for a personal loan with a co-signer to further improve their probability of loan approval under the best terms and conditions.

Excellent Credit Score

People with excellent credit scores will have creditworthiness greater than 800, which lands them the top-tier personal loans from lenders. Such loans will have the lowest interest rates as the lenders market them. Although the proportion of people in this range is less than in the other ranges, fewer people have excellent credit ratings.

Let us look at the various factors determining the best bad credit personal loan lenders.

How Can a Person Choose the Best Bad Credit Personal Loan Lenders?

The financial industry has numerous creditors and credit loan companies providing different loans to people. Individuals approach them for personal loans even. Those who have bad credit also apply for personal loans. This section will discuss how you can compare the best bad credit personal loan lenders in the market as per your needs and preference.

Several factors should be considered before considering some lenders as the best bad credit personal loan providers. They include the following:

Eligibility Requirements

All lenders have different eligibility criteria, which should be considered as it is not always the same for everyone. For instance, for one lender, the minimum credit score would be 640, whereas, for the other lender, it would be 680. Each lender has the requirements to qualify for the loan listed on their website for individuals to have some idea before applying for the loan.

Similarly, each lender has a minimum level of income that needs to be maintained when applying for a personal loan as it counts for the financial condition of that person. As a result, a credit utilization ratio is mentioned on the website under eligibility requirements. For some lenders, the rate should be below 30%, and for others, it should be less than 40%.

Interest Rate and Fees

The loan a person qualifies for is prone to specific interest rates directly related to that person’s creditworthiness and the evaluation done by the lender depending upon the risk. The interest rate is also related to the loan amount and the repayment period to repay the amount with interest. Since different lenders would give you different interest rates, it is better to ask for quotes from several lenders and compare them to see which one offers the most favourable terms.

In addition, lenders also charge varying APRs, including interest rate, origination fee, and other hidden and non-hidden charges that are compulsory to be paid off. Asking for quotes from different lenders is the best solution to go by as you can compare and make a final decision.

Repayment Terms

Repayment terms are the periods under which the borrower has to pay back the loan amount and the interest. Personal loans have a repayment period between one year to 12 years, between which the borrowers have to write off their entire dues. The repayment period can be shorter or longer depending on the loan amount. For instance, short term periods will be paid off in a year or less, which means all dues and debt is cleared off. Short term loans will have less interest payment linked to them. If someone pays off their loan soonest, they will reduce the interest rate.

Similarly, a long term period means that the loan can be paid off over a considerable period. Still, the interest payment is distributed across a wide period with more interest payment, so each period has interest payment linked to it. When this payment is accumulated, it is more than the loan amount. However, a long term personal loan period will decrease the monthly bill of the person making payments payable without any defaults.

Type of Lenders

The financial industry has several lenders that offer personal loans to people, including traditional banks, credit unions, lenders, and credit companies. The lenders may operate through brick and mortar stores, or their operations are entirely online. Online lenders are known to provide the lowest rates, but the drawback is that you will not have the in-person experience with them, and sometimes these lenders scam people.

Let us look at the scams people should avoid when applying for bad credit personal loans.

How to Avoid Scams for Bad Credit Personal Loans?

The previous section discussed the factors that a person should adapt to choose the best bad credit personal loan companies. This section will highlight the scams people should avoid when dealing with lenders. There are several bad credit personal loan lenders in the market, and some of them are untrue, false and shady and should be avoided to stay away from all sorts of inconvenience.

They include the following

The Lender Demands an Individual to Pay Fees Upfront

Some lenders in the market might scam you by asking you to pay the fees upfront to be considered for the loan. That is not the case since no legitimate lender would ask a borrower to pay the fees beforehand. Lenders would check your creditworthiness and see if you qualify for the loan, and in the event you get approved for the loan, the fees will be deducted after the funds have been transferred.

The Lender Requires You to Act Immediately

No lender in the industry would ask you to make a decision now. They give the borrowers time to think and consult with their family members or even their consultant because it is a significant decision. If that is not how it goes, then it is a major red flag that should be understandable when the lender says it. No lender would give you an offer limit or the time when that offer expires, so it is better to avoid it if you come across someone who does that.

The Lender Has No Physical Address

Suppose a reputable lender doing business in the market has no physical address mentioned on their card, letterhead, receipt or the company’s website. In that case, it is most likely going to be a scam. Each reputable lender has a physical address available on Google maps for the convenience of the borrowers to locate.

The Lender Is Not Registered in Your State

Each lender that wants to operate their business in any state across the USA needs to get registered under the Federal Trade Commission (FTC) as this is a requirement written in the law. Both online and in-person lenders must follow this criterion to carry out their business activities in the designated area. If that is not the case and you are suspicious of illegal activity, you can reach out to the district attorney who has complete knowledge of the matter.

The Lender Contacted You First

There have been occasions where people have received calls on their phone or home address from various lenders telling them about personal loans. If you have not initiated the first step for getting a bad credit personal loan, you can simply block their number and report them if they annoy you constantly. It is recommended not to give an untrustworthy lender any financial information on the call. A reputable lender will not call you and ask you to provide your details, so such a scam should be avoided.

The Lender Doesn’t Check Your Payment History

People who apply for bad credit personal loans are constantly checked for their creditworthiness to understand how risky an investment they are for the lender. Suppose a lender does not check your credit score and grants you approval for the loan. In that case, this is one shady activity and should be avoided as it shows the lender is only doing this to extract your personal information from you, like bank account details.

Legit lenders would check your DTI ratio, credit history, and financial situation and make a suitable decision.

Let us look at the best bad credit personal loans available in the market for people.

Best Credit Personal Loans

We discussed the scams that people should avoid before committing to a personal loan in the previous section. Here, we will cover the best bad credit personal loans that people can opt for in the industry. Let’s dive into it!

Bad Credit Loans

Bad Credit Loans are considered ideal for people with poor credit scores. The lending company is known for charging no fees to an individual that wishes to use the company’s website. People can easily qualify for the loan that they need for personal use. As part of the eligibility criteria, the company has low minimum borrowing amounts.

The drawback of choosing this lending company is limited information before the borrower matches with the lender. Moreover, the lenders a person will partner with will have terms and conditions that the person has to follow.

The following are the company’s features

  • Minimum credit score: 580 on the FICO scale
  • APR: Lenders have APRs that range from 5.99% to 35.99%
  • Loan amount: Minimum $500 to maximum $10,000
  • Minimum annual income: $12,000
  • Repayment Period: Not specified on the website


Upstart is considered best for those people that have a limited credit history. Such people can include students who have recently turned 18 and need loans for their personal or educational expenses. Anyone with a short or insufficient credit record can apply for a personal loan with Upstart, and their application will be catered for.

The company is known to provide fair unsecured loans efficiently to people seeking them. The company considers the applicant’s education, job history, and job type to understand their foreseeable income in the future. The company provides funding efficiently, so the funds are available in the applicant’s account the day after their application is approved.

The following are the company’s features

  • Minimum credit score: None required
  • APR: Lenders have APRs that range from 3.22% to 35.99%
  • Loan amount: Minimum $1000 to maximum $50,000
  • Minimum annual income: $12,000
  • Repayment Period: Three to five years
  • Origination fee: Up to 8% of the loan amount

OneMain Financial

OneMain Financial is considered ideal for those people that require secured personal loans. But the company also offers unsecured loans, but it is best known to provide secured loans to its borrowers. In the financial industry, lending companies only provide unsecured loans, but with OneMain Financial, people can get secured loans and have better chances of getting approval.

The company believes in providing its services in person, and therefore, there are more than 1500 branches nationwide in the USA where people can go to acquire personal loans. The secured and unsecured loans are only for personal use and cannot be used for business expenses. The company has a strict policy where the funds should be allocated for personal use only. 

The following are the company’s features

  • Minimum credit score: None required
  • APR: Lenders have APRs that range from 18% to 35.99%
  • Loan amount: Minimum $1500 to maximum $20,000
  • Minimum annual income: $7200
  • Repayment Period: Two to five years
  • Origination fee: Vary by state

TD Bank

TD Bank is considered ideal for those who would like to incur less interest rate and APR on their loan amount. The bank provides unsecured personal loans that can get approval, and funds can be transferred to the appropriate account within one business day. The bank carries out a soft credit check on the financial accounts of the applicant to not hurt the credit score in any way. The applicants have an option to change their payment date every month as per their budget, preference and needs.

People with low credit scores can apply for unsecured personal loans with TD bank and will have to pay a lesser interest payment relative to other lending companies that have a cap of 30% and above. The drawback of choosing TD bank for personal loans is that it is only available in particular states. The borrowers cannot use the personal loan for business or cover educational expenses.

The following are the company’s features

  • Minimum credit score: Not disclosed on the website
  • APR: Lenders have APRs that range from 6.99% to 18.99%
  • Loan amount: Minimum $2000 to maximum $50,000
  • Minimum annual income: None
  • Repayment Period: Three to five years


Avant is considered ideal for those who would like a range of repayment options on their personal loans. With a wide range of repayment terms, people have an option to pay back the loan with a reduced interest rate, thus saving their money. A borrower can use their family member who has a stable job to help them qualify for the loan. The borrower can use as many family members as they want to strengthen their application for loan approval.

Borrowers cannot bring on a co-signer to their application but can only bring on family members that earn. Borrowers also have to pay an upfront administration fee which is relatively high compared to other companies. The administration is almost 4.75% of the loan amount.

The following are the company’s features

  • Minimum credit score: Minimum score of 580 on the FICO scoring model
  • APR: Lenders have APRs that range from 27.95% to 35.99%
  • Loan amount: Minimum $2000 to maximum $35,000
  • Minimum annual income: $14,400
  • Repayment Period: Two to four years

Lending Point

Lending Point is considered ideal for those who would like to apply for small personal loans to cover immediate emergency expenses like a medical bills. The company operates in 48 states in the USA, where people can visit the physical store to inquire about personal loans. The company provides unsecured personal loans to people.

The benefits of lending Point are that the loan application’s approval process depends on various factors and not just one factor that increases the probability of loan approval. The personal loan has a low minimum borrowing amount, which benefits people who require only a small loan amount.

The following are the company’s features

  • Minimum credit score: Minimum score of 600
  • APR: Lenders have APRs that range from 15.49% to 34.99%
  • Loan amount: Minimum $2000 to maximum $36,500
  • Minimum annual income: $30,000
  • Repayment Period: Two to five years
  • Origination fee: Up to 6%


The upgrade is considered ideal for people requiring immediate access to funds, so the company is known for fast funding for personal loans. The company offers unsecured personal loans that serve several purposes that may not be limited to debt consolidation, credit card refinancing, and home renovations.

Applying for a personal loan at upgrade is that the loan can get approval efficiently, and funds are transferred to the borrower’s account within one business day. The company allows joining applications so two or more people can apply for one personal loan under the same application, which will help such individuals manage their budget and expenses.

The following are the company’s features

  • Minimum credit score: Minimum score of 560
  • APR: Lenders have APRs that range from 5.94% to 35.97%
  • Loan amount: Minimum $1000 to maximum $50,000
  • Minimum annual income: $30,000
  • Repayment Period: Three to five years
  • Origination fee: From 2.9% to 8%

Lending Club

The Lending Club is considered ideal for those who would like to enjoy the best online experience for personal loans. The company gives bad credit personnel the option to use a co-signer to apply for the loan application to increase their chances of loan approval. In the market, few lenders are offering the use of a co-signer for the loan application, and the lending club is one of those few lenders.

The benefit of going with the lending club is that borrowers will be given a grace period of 15 days in the case of late payment, and within this period, no late fee or penalty charges will be applicable. The company also has low borrowing for those who require a small loan amount to cover the immediate expense. The company has a user-friendly website that makes the application process easy, simple, and efficient.

The drawback of the lending club is that it charges the borrowers with origination and late fees on their personal loans.

The following are the company’s features

  • Minimum credit score: Minimum score of 600
  • APR: Lenders have APRs that range from 7.04% to 35.89%
  • Loan amount: Minimum $1000 to maximum $40,000
  • Minimum annual income: None required
  • Repayment Period: Three to five years
  • Origination fee: From 3% to 6%
best bad credit personal loans


This guide covered the basics of bad credit personal loans by understanding what credit score is considered bad, fair, good, and excellent. Based on the fundamental concepts, we looked at the factors any person seeking personal loans should consider selecting the best bad credit personal loan companies. We further studied the common scams in the industry related to personal loans. It is essential to be self-aware of all such scams to avoid mishaps or inconveniences.

In the last section of the guide, we discussed the best bad credit personal loans in the market and looked at each loan’s specifications to better understand them and their category for the people who need personal loans. Each loan company specializes in a specific category for personal loans. So people should adhere to their needs and preferences and then choose the company they want to borrow the funds from.

Bad credit personal loans are a good way for people to work on their credit, and if they were to pay their dues on time, the trust between the borrower and the lender would increase. As a result, the borrower would also report their credit activities to the major credit bureaus to improve their credit score. So if you want your credit score to improve, get the top tier personal loans with favourable rates, improve your credit score, pay your due promptly, and miss not even a single payment.

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Robert Ferry

We are an unbiased knowledge center for finance and our goal is to help you make your own, educated decisions about getting your credit life turned around.