Best Personal Loans for Bad Credit

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Struggling with bad credit can be one of the most stressful experiences in the world. If a financial emergency strikes or you want to consolidate your debt, you might believe it’s impossible to qualify for a personal loan without turning to predatory payday lenders. In most circumstances, however, that’s not true.

Personal loan options can be more limited when your credit isn’t in good shape, but that doesn’t mean you have no options. There are lenders who may be willing to offer you a personal loan even if you have a poor credit rating.

Best Personal Loans for Bad Credit
Avant: Best Overall
LendingClub: Best Maximum Loan Amount
LendingPoint: Best Post-Bankruptcy Personal Loan
OneMain Financial: Best In-Person Loan Experience
Your local credit union: Best Payday Alternative Loan
What Is Considered Bad Credit?
The credit scores used by most lenders range from 300–850. If you have a FICO score under 670, you’re considered a subprime borrower with a “fair” credit rating, according to Experian. The credit reporting company classifies a FICO score of less than 580 as “very poor.”

It’s important to understand that taking out a personal loan with bad credit is generally more expensive. Interest rates can often climb into the upper-30% range, based on your credit rating. Other obstacles you could face when you try to borrow with bad credit include lower loan amounts and shorter repayment terms. To help you compare the best loan options available, we’ve researched more than a dozen personal loans for bad credit. We compared interest rates, fees, qualification requirements, and other loan features.

Best Overall: Avant
Avant offers the best overall personal loan to borrowers with credit challenges. If you qualify for funding, you could receive up to $35,000. Interest rates start as low as 9.95%. Although Avant charges an administrative fee, the maximum amount it charges (4.75%) is lower than what you may see from other comparable lenders.

Pros
Lower starting interest rate among subprime lenders, but you might pay more if your credit score is on the low end of Avant’s approval range

No prepayment penalty for paying off your loan early

Soft credit inquiry performed when you check your loan options online

Cons
Higher interest rates compared to the rate you might receive elsewhere with better credit

Low maximum loan amount of $35,000—higher loan amounts available with other lenders

An administrative fee may be taken directly out of your initial loan amount

Other important information:

Minimum/maximum amount you can borrow: $2,000 to $35,000
APR range: 9.95%–35.99%
Fees: Avant may charge an administrative fee up to 4.75% that comes directly out of your loan. The lender charges late fees and dishonored payment fees as well.
Minimum credit requirement: 580 minimum credit score (most Avant borrowers have a credit score between 600 and 700)
Other qualification requirements: Besides checking your credit score, Avant will review your income to see if you qualify for a loan and how much you can borrow.
Repayment terms: 24 to 60 months
Time to receive funds: Loan funds may be deposited in your account as soon as the next business day.
Best Maximum Loan Amount: LendingClub
LendingClub is a peer-to-peer lending marketplace that matches millions of borrowers with investors, including some borrowers with subprime credit. Reports indicate that you may be able to qualify for a loan through the LendingClub platform with a credit score as low as 600.

Interest rates for well-qualified borrowers start as low as 6.95%. However, borrowers with credit challenges could pay rates up to 35.89%, making the cost of borrowing expensive. The lender offers personal loans up to $40,000.

Pros
Higher maximum loan amount compared with other lenders in this category

Soft credit inquiry to check your loan offer and estimated interest rate online

No prepayment penalties if you decide to pay off your loan early

Cons
A co-borrower may be needed to qualify for a lower interest rate

Higher origination fees than what other lenders may charge for subprime personal loans

A wait of four or more days to receive your funding once you qualify

Other important information:

Minimum/maximum amount you can borrow: $1,000 to $40,000
APR range: 6.95%–35.89%
Fees: Origination fees can be as high as 6%; the average is 5.2%. If you’re more than 15 days late on your payment, a late fee of $15 or 5% of the past due amount is charged, whichever is greater.
Minimum credit requirement: Reported to be 600, but not stated on website
Other qualification requirements: You should be at least 18 years old, a U.S. citizen or permanent resident (or have a long-term visa), and have a verifiable bank account. LendingClub will also consider your debt-to-income ratio and credit history.
Repayment terms: Choose between 36 and 60 months (three or five years).
Time to receive funds: Per LendingClub, most loans issued in 2018 were received in as few as four days.
Restrictions: Iowa residents aren’t eligible for LendingClub loans.
Best Post-Bankruptcy Personal Loan: LendingPoint
Qualifying for a personal loan can be especially tricky if you’ve filed bankruptcy in the past. But if your bankruptcy has been discharged for at least 12 months, LendingPoint might be willing to work with you.

LendingPoint offers loans to borrowers in 49 states with credit scores as low at 585. Qualified applicants can borrow up to $25,000 and interest rates start at 9.99%. 

Pros
Lower credit scores accepted if you satisfy other qualification criteria

Past bankruptcy isn’t necessarily a deal killer as long as it was discharged at least 12 months ago

No prepayment penalty applies if you want to pay off your loan early

Cons
Lower maximum loan amount compared with other lenders

Origination fees can be as high as 6%, depending on the state where you live

Higher interest rates compared to the APR you might be offered elsewhere with better credit

Other important information:

Minimum/maximum amount you can borrow: $2,000 to $25,000
APR range: 9.99%–35.99%
Fees: LendingPoint charges origination fees as high as 6%.
Minimum credit requirement: 585
Other qualification requirements: You should be 18 years or older, provide a state or federal ID and Social Security number, and have a bank account in your name. You also need a minimum annual income of $20,000.
Repayment terms: 24 to 48 months
Time to receive funds: Once you're approved, you can receive funds as soon as the next business day.
Restrictions: If you live in the state of West Virginia you cannot receive a loan through LendingPoint. 
Best In-Person Loan Experience: OneMain Financial
If you prefer to do business with a lender face-to-face, OneMain Financial may be a good fit. The lender has almost 1,600 branches in 44 states where it offers unsecured personal loans to borrowers with less-than-perfect credit. Interest rates start at 18% and qualified applicants may be able to borrow up to $20,000.

Pros
Numerous branches available for borrowers who prefer to meet or pick up funds in person

No prepayment penalty if you opt to pay off your loan early

Soft credit pull used to check for prequalified offers

Cons
High starting interest rate compared with some other subprime lenders

Maximum loan amount of $20,000 is low compared with other personal loan providers

Origination fees and late fees may be charged on top of interest costs

Other important information:

Minimum/maximum amount you can borrow: $1,500 to $20,000
APR range: 18%–35.99%
Fees: Origination fees can be as high as $150 or 5% of your loan amount, depending upon your state of residence. Late fees also vary by state and can be as high as $25 per late payment or 15% of your past-due balance.
Minimum credit requirement: Not stated on website
Other qualification requirements: OneMain Financial will consider the following when you apply for a loan: your credit history, income, debts, and any collateral you wish to provide.  
Repayment terms: Term length may be 24, 36, 48, or 60 months.
Time to receive funds: You could receive your funds the same day you’re approved, if you opt to pick them up in person. Direct deposit may take one to two business days.
Restrictions: If you’re prequalified for a personal loan with OneMain Financial, you’ll need to visit a branch and meet with a loan specialist in person to complete the application process.
Best Payday Alternative Loan (PAL): Your Local Credit Union
If you’re struggling with severe credit problems and need a small-dollar loan to get you through an unexpected financial emergency, a payday alternative loan (PAL) is worth considering. PALs are issued by federally insured credit unions. The maximum amount you can borrow with a PAL is currently just $2,000. But the interest rate is capped at 28%, making PALs a more affordable option than payday loans and even some online personal loans for bad credit.

Pros
Lower interest rates than payday loans and some online personal loans

Low application fee is capped at a maximum of $20 nationwide

Cons
Small maximum loan amount of $2,000 might not be sufficient to meet your borrowing needs

Minimum membership period in the credit union might be required, depending on the lender

Other important information:

Minimum/maximum amount you can borrow: $200 to $2,000
APR range: 28% (current maximum)
Fees: Application fee cannot be more than $20.
Minimum credit requirement: No credit check required with many credit unions
Other qualification requirements: Requirements vary from lender to lender, but may include direct deposit participation, on-time payment history with other loans from the credit union, and verification of employment.
Repayment terms: 1 to 12 months
Restrictions: You should check with your individual credit union to see if any restrictions apply.

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