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Best Personal Loans for Bad Credit

Upgrade offers the best loans for bad credit

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Personal loans are a great option if you need to consolidate debt or cover a car repair, medical bill, home improvement project, or virtually any other expense. When you apply for a personal loan, most banks, credit unions, and online lenders will consider your finance profile, which includes your FICO score and income. 

Fortunately, you can get approved for a personal loan even if you don’t have the best credit. The best personal loans for bad credit offer an easy application process, fast funding, and minimal fees. To make your life easier, our expert team has researched and reviewed them below.

Best Personal Loans for Bad Credit of October 2022

Best Overall : Upgrade

The Balance's Rating
3.9

Upgrade logo

 Upgrade logo

  • Minimum credit score: 550
  • APR range: 6.95%–35.97%
  • Loan terms: 24–84 months
Pros and Cons
Pros
  • Can get funds in one day

  • No prepayment penalties

  • Joint applications allowed

Cons
  • 2.9% to 8% origination fees deducted from the loan amount

  • Late fees of up to $10

  • Can’t use funds for college or investments

Why We Chose It

Upgrade offers some of the best personal loans for bad credit because of its low credit score requirement, fast funding, and payment flexibility. You can borrow $1,000 to $50,000. Once you take out an Upgrade loan, you’ll be able to change your payment dates to better fit your budget. You can also land a 0.5% autopay discount and take advantage of a free credit monitoring program, known as Credit Health.

With Credit Health, you’ll be able to monitor your VantageScore 3.0 credit score and receive tips on how to improve it so you can open the doors to loans with great rates and terms in the future. Upgrade also offers a handy mobile app you can use to access Credit Health, manage your loan, and make payments.

Best for Quick Loan Funding : Rocket Loans

The Balance's Rating
3.8

Rocket Loans

Rocket Loans

  • Minimum credit score: 580
  • APR range: 7.727%–29.99% 
  • Loan terms: ​​ 36 or 60 months
Pros and Cons
Pros
  • Can pre-qualify without any impact to your credit

  • Fast approvals

  • No prepayment penalties

Cons
  • Origination fee of 1% to 6%

  • Only two loan terms available: 36 or 60 months

  • Late fee of $15

Why We Chose It

Same-day funding is available with Rocket Loans. As long as you complete your application and sign the loan documents before 1 p.m. ET, Monday through Friday, you may get your money that same day. This is great news if you have an emergency expense and can’t wait days or weeks for the money. Rocket Loans allows you to borrow $2,000 to $45,000.

In addition to fast funding, you can score a 0.5% interest rate discount if you enroll in automatic payments. Lastly, you may use a Rocket Loan personal loan to consolidate debt, improve your home, repair your car, or for any other expenses, except for college tuition.

Best for Debt Consolidation : Avant

The Balance's Rating
3.6

Avant logo

 Avant logo

  • Minimum credit score: 580
  • APR range: 9.95%–35.95%
  • Loan terms: 12–60 months
Pros and Cons
Pros
  • Next-day funding available

  • Can pre-qualify without hurting your credit

  • No prepayment penalties

Cons
  • Administration fee of up to 4.75%

  • Late payment fee of $25

  • Dishonored payment fee of $15

Why We Chose It

Avant provides debt consolidation loans, which can make sense if you’d like to pay off several high-interest credit card debts. Instead of multiple payments, you’ll have one convenient monthly payment with a fixed interest rate. This can help you save on interest and streamline the debt payoff process. Borrowers can take out $2,000 to $35,000.

In addition to debt consolidation, you can use an Avant personal loan for emergency expenses and home repairs. Avant’s website is also very transparent and allows you to easily check the rates and terms in your state, which can vary depending on where you live.

Best for Low Fees : LendingPoint

The Balance's Rating
3.7

Lending point logo

 Lending point logo

  • Minimum credit score: 580
  • APR range: 7.99%–35.99%
  • Loan terms: 24–72 months
Pros and Cons
Pros
  • Next-day funding available

  • Funds can be used for any expense

  • May pre-qualify without any impact to your credit

Cons
  • Minimum loan amounts in some states

  • Must earn at least $20,000 annually

  • Not available in Nevada and West Virginia

Why We Chose It

Unlike other lenders, LendingPoint doesn’t charge any fees for making extra payments on your loan or paying it off early. But you might be on the hook for an origination fee between 0% to 6% of your total loan amount, depending on where you live. You can borrow $2,000 to $36,500.

Once you make timely payments for six months, LendingPoint will review your account and may give you a lower rate. Depending on your situation, you might even qualify for more than one personal loan. The lender also offers hardship assistance that can come in handy if you lose your job or are unable to make your payments for certain other reasons.

Best for Very Low Credit : Upstart

The Balance's Rating
1.7

Upstart Personal Loan Review

Upstart Personal Loan Review

  • Minimum credit score: 300
  • APR range: 5.40%–35.99%
  • Loan terms: 3 or 5 years
Pros and Cons
Pros
  • May check rate with no impact to your credit

  • Can get funds the next day

  • No prepayment penalties

Cons
  • Origination fee of 0% to 10%

  • Co-signers not accepted

  • Only two repayment terms: 3 or 5 years

Why We Chose It

You can get approved for an Upstart personal loan of $1,000 to $50,000 with a credit score as low as 300. You must also meet a minimum debt-to-income ratio requirement of 45% or 50%, depending on where you live. Upstart also requires that you don’t have any bankruptcies or public records on any of your credit reports within the last 12 months. In addition, your payments must be up to date on all of your accounts.

If you take out an Upstart loan you’ll receive access to a Financial Fitness Dashboard, which can help you keep tabs on one of your FICO credit scores. The lender will also let you split your monthly payment into two installments to make them more manageable. If you’d like, you can schedule these payments automatically. 

Best for Military Members and Vets : Navy Federal Credit Union

The Balance's Rating
3.7

Navy Federal Credit Union logo

Navy Federal Credit Union logo

  • Minimum credit score: Not disclosed 
  • APR range: 7.49%–18.00%
  • Loan terms: 36–180 months
Pros and Cons
Pros
  • Loans as small as $250 and as high as $50,000

  • Same-day funding

  • Certificate secured loan available

Cons
  • Must join credit union to take out a loan

  • No chance to pre-qualify

  • Some loan types require higher minimum amounts

Why We Chose It

Personal loans from Navy Federal Credit Union (NFCU) are intended for active duty military members and veterans as well as their families. Members can choose from a variety of personal loans, including personal expense loans, home improvement loans, debt consolidation loans, and savings secured loans. 

No matter which loan you choose, you won’t have to pay any origination fees or prepayment penalties. But NFCU might charge you a returned payment or late fee.

Final Verdict

When it comes to personal loans for bad credit, there is no shortage of options. While some lenders are known for their easy pre-qualification process and fast funding, others have a reputation for affordable rates and flexible terms.

Upgrade is the best overall lender of personal loans for bad credit because of its low rates, one-day funding time, and wide variety of terms. You can adjust your payment due date to fit your financial situation, and keep tabs on your credit with the Credit Health program.

Compare the Best Personal Loans for Bad Credit 

Company Minimum Credit Score  APR Range  Loan Terms  Loan Amounts 
Upgrade Best Overall 550 6.95%–35.47% 24–84 months $1,000–$50,000
Rocket Loans Best for Quick Loan Funding  580  6.72%–29.99%  36 or 60 months  $2,000–$45,000 
Avant Best for Debt Consolidation  580  9.95%–35.95%  12–60 months  $2,000–$35,000 
LendingPoint Best for Low Fees  580  7.99%–35.99%  24–72 months  $2,000–$36,500 
Upstart Best for Very Low Credit  300  5.40%–35.99%  3 or 5 years  $1,000–$50,000 
Navy Federal Credit Union Best for Military Members and Vets  Not disclosed  7.49%–18.00%  36–60 months  $250–$50,000 

Guide for Choosing a Personal Loan for Bad Credit

Should You Get A Personal Loan for Bad Credit?

Your personal situation will determine whether you should take out a personal loan while you have bad credit. If you have an emergency expense and need cash to cover it, it might be a good option. A personal loan can also be useful if you need to pay an essential expense but don’t have the money on hand. They can also be great tools to help you consolidate high-interest debt at a lower interest rate.

Just keep in mind that if you do decide to apply for a personal loan with bad credit, you may find it difficult to get approved. This is because lenders consider borrowers with bad credit scores riskier and may be hesitant to lend them money. 

If you find a lender that approves your application, you may have to pay a higher interest rate that can increase the cost of your loan by thousands of dollars. Plus, you might be on the hook for higher fees and may have to deal with less flexible terms. 

How to Compare Personal Loan Lenders

Not all personal loans for bad credit are created equal. That’s why it’s important to consider the following when you compare your options.

  • Pre-qualification: Pre-qualifying for a loan allows you to check your rates and terms without any impact to your credit score. Some lenders allow you to pre-qualify online and make it easy to find the right choice for your unique needs.
  • Interest rates: Interest is the price you pay to borrow money; when it comes to loans, the interest rate is included as part of the APR. A higher rate will increase the overall cost of the loan while a lower rate can save you hundreds or even thousands.
  • Terms: The term refers to how long you have to repay a loan. While a longer term can lead to lower payments, it will cost you more in interest in the long run.
  • Fees: Most lenders charge fees like origination fees, late fees, and returned payment fees. Some of them, however, are known for low or no fees.
  • Reputation: Just because a lender offers personal loans for bad credit doesn’t mean they are reputable. Check third-party review sites and customer reviews if you’re not sure.
  • Customer service: At some point in time, you may need assistance with your loan. That’s why strong customer service via phone, email, live chat, and/or website resources is essential. 

How to Apply for a Personal Loan

Once you find a lender that meets your needs, it’s time to apply for a loan. Most lenders will let you apply online on their company websites. Be prepared to share your personal and financial information, including your employment status and monthly housing costs, along with why you need the money and how much you’d like to borrow.

Depending on the lender, you may also have to submit certain documents. These may include a government-issued ID, like a driver’s license or passport, paystubs, tax forms, and/or bank statements to prove your identity and income. 

When a lender receives your application they’ll likely perform a hard inquiry, which will impact your credit. Upon approval, you may receive the funds via direct deposit, check, or sometimes prepaid card. You can then manage your loan payments online or through the lender’s mobile app. If you’d like, you can set up automatic payments from a credit card or bank account.

Frequently Asked Questions

What Does It Mean to Have Bad Credit?

A FICO credit score between 300 and 579 is generally considered to be in the “bad credit” or “poor credit” range. If you have a history of missed payments, bankruptcies, and other negative marks, you might have bad credit.
No credit, on the other hand, means you don’t have any information on your credit reports. This may be because you’re young or recently moved to the U.S. and haven’t opened any credit accounts.

Can I Get a Personal Loan With Bad Credit?

Lenders have different eligibility requirements. Fortunately, some are more lenient than others and are willing to lend to borrowers with bad credit. If you find a personal loan you like but don’t have the best credit, you can apply with a co-signer to increase your chances of approval. 

Or you can work work on improving your credit by paying your bills on time and reducing your debt, and then applying at a later time. Another option is to secure a loan with collateral—collateral is something valuable you own, like your savings account or car.

What’s the Easiest Type of Loan to Get With Bad Credit?

If you have bad credit but want a personal loan, there are several options you may consider, including:

  • Unsecured loans: Unsecured loans are based on your credit and are offered by most lenders. If you go this route, you might find it more difficult to get approved and may be forced to accept higher rates.
  • Secured loans: Secured loans are tied to collateral. Since the lender can seize your collateral if you fail to make your payments, secured loans are easier to qualify for and tend to come with lower rates.
  • Payday loans: Payday loans are small, short-term loans designed to hold you over until you get paid next. While they’re easy to get, you’ll need to pay them back quickly when you receive your next paycheck, usually within a few weeks. 
  • Credit cards: Some credit cards are available even if you have bad credit. If possible, find one with no or low annual fees and rewards like cash back or travel points. Be sure to pay your balance in full every month or you might steer yourself into credit card debt.

Methodology

Our team evaluated 38 lenders and collected 1,520 data points before selecting our top choices. We weighed more than 20 criteria and gave a higher weight to those with a more significant impact to potential borrowers. 

The top picks were selected based on factors like membership requirements (weighted 15%), average fixed APR (weighted 15%), and average origination fees (weighted 10%). 

We also took into account the flexibility of repayment terms, helpful features like pre-qualification, and whether a co-signer or joint applications are permitted to ensure borrowers get the best possible experience.

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