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Best bad credit loan options in October 2022

Written by Amanda Push | Edited by Katie Lowery | Updated October 11, 2022

*Annual percentage rate (APR) is a measure of your cost of borrowing and includes the interest rate plus other fees. Available APRs may differ based on your location. APR may include an autopay discount. Read how we chose the best personal loans for bad credit in our methodology below.

Lender details

Avant: Best for quick funding

• Minimum credit requirement: 600
• APR: 9.95% – 35.99%
• Terms: 24 to 60 months
• Origination fee: Up to 4.75%

Why we like it: If you’re approved for a personal loan with Avant, your funds may be deposited into your bank account as soon as the next business day.

Overview: Avant has higher interest rates than some lenders, but you may receive your loan faster than their competitors. This online lender also allows borrowers to change their loan due date up to the day before the deadline. Plus, Avant offers secured loans for those who don’t qualify for an unsecured loan. Getting a secured loan may also help you to get lower rates, though you stand to risk losing any collateral you put down, so be sure you’re able to repay your loan. Minimum loan amounts may vary by state.

Eligibility requirements: Avant doesn’t provide many details on its website as to its eligibility requirements — however, you’ll have to verify your identity, employment, income and bank account.

Read Avant review

Happy Money: Best for few fees

• Minimum credit score: 640
• APR: 7.99% – 29.99%
• Terms: 24 and 60 months
• Origination fee: 0.00% - 5.00%

Why we like it: Other than its origination fee, Happy Money doesn’t charge application and fees fees or prepayment penalties or late.

Overview: Happy Money (formerly Payoff) bad credit loans are specifically available to help borrowers eliminate their credit card debt. While you may not be eligible for Happy Money’s lowest interest rates, their personal loan rates may be lower than those on your current credit card. If you’re approved by this lender, you can typically expect to see your lump sum deposited into your account within three to six business days, which can be much slower than other lenders on this list.

Eligibility requirements: You’ll need to meet the following requirements to be eligible for a personal loan with Happy Money:

• At least three years of credit history
• A debt-to income ratio of less than 50%
• No current delinquencies
• Minimum credit score of 640

Read Happy Money review

LendingClub: Best for using a co-borrower

• Minimum credit requirement: Not specified
• APR: 8.30% – 36.00%
• Terms: 36 and 60 months
• Origination fee: 3.00% - 6.00%

Why we like it: Unlike some other competitors, LendingClub allows applicants to apply for a joint personal loan with a co-borrower.

Overview: LendingClub is a peer-to-peer lending marketplace through which you can borrow up to $40,000 and get funds in as little as 24 hours. You may also change your due date with LendingClub — either as a one-time occurrence or permanently — but be sure to check how changing your payment deadlines could affect your interest rates. You’ll need to be current on your payments in order to change your due date.

As an added bonus for borrowers with low credit scores, LendingClub also offers joint personal loans. The option to add a co-borrower may make it easier for some applicants with poor credit to qualify for a personal loan.

Eligibility requirements: To qualify for a personal loan with LendingClub, you’ll need to be a U.S. citizen who’s at least 18 years old, and have a verifiable bank account.

Read LendingClub review

LendingPoint: Best for loan-term flexibility

• Minimum credit requirement: 620
• APR: 7.99% – 35.99%
• Terms: 24 to 72 months
• Origination fee: 0.00% - 7.00%

Why we like it: With personal loan terms of 24 to 72 months, LendingPoint has some of the most flexible loan terms on our bad credit loans list.

Overview: LendingPoint sees your credit score as only one piece of the financial puzzle. In addition to your credit, this lender also evaluates your job history, financial track record, personal income and recent credit behavior using artificial intelligence. If you’re approved, your funds may be deposited in your account as soon as the next business day.

LendingPoint applicants must have an annual income of $35,000 or higher and cannot apply with joint or cosigned loans.

Eligibility requirements: You’ll need to meet the following requirements to qualify for a personal loan with LendingPoint:

• Must be at least 18 years old
• Must provide a government-issued identification
• Must have a Social Security number
• Must have a minimum annual income of $35,000
• Must have a verifiable bank account
• Must not live in Nevada or West Virginia

Read LendingPoint review

OneMain Financial: Best for secured loans

• Minimum credit requirement: Not specified
• APR: 18.00% – 35.99%
• Terms: 24 to 60 months
• Origination fee: 1.00% - 10.00%

Why we like it: For borrowers with bad credit, OneMain Financial offers both unsecured and secured loans — the latter of which may require collateral (a vehicle, for example).

Overview: OneMain Financial has the lowest loan amount cap ($20,000) on our bad credit loans lender list, so this company may be best for those searching for smaller-sized bad credit loans.

While OneMain Financial’s interest rates are fairly high, they may be lower than what you may find with other bad credit loan companies and predatory lenders. OneMain Financial charges late fees either ranging from $5 to $30, or as a percentage of your entire monthly payment charge (or the late portion of your monthly payment), which can range from 1.5% to 15%.

Eligibility requirements: OneMain Financial doesn’t provide specific details on eligibility criteria, but it does take the following into consideration:

• Your personal financial history
• Your credit history
• Your income
• Your expenses
• The purpose of your loan
• If you’ve filed for bankruptcy
• Where you live

Read OneMain Financial review

TD Bank: Best for no origination fees

• Minimum credit requirement: 660
• APR: 6.99% – 18.99%
• Terms: 12 to 60 months
• Origination fee: None

Why we like it: TD Bank is one of the few lenders that offers bad credit loans without charging origination fees.

Overview: With loans ranging from $2,000 to $50,000, TD Bank offers one of the most flexible ranges of loan amounts. Another feature that stands out with TD Bank is its lack of origination fees, a common fee that often accompanies unsecured personal loans and is taken out of the total amount of the loan upfront. In addition, TD Bank also doesn’t charge application fees or prepayment penalties.

If you’re approved for a personal loan with TD Bank, you may receive your funds within one business day and can receive terms 12 to 60 months.

Eligibility requirements: While TD Bank doesn’t offer specific information on its website regarding personal loan eligibility criteria, only borrowers who live in one of the following states can qualify:

• Connecticut
• Delaware
• Florida
• Maine
• Maryland
• Massachusetts
• New Hampshire
• New Jersey

• New York
• North Carolina
• Pennsylvania
• Rhode Island
• South Carolina
• Vermont
• Virginia
• Washington, D.C.

Read TD Bank review

Upgrade: Best for flexible loan amounts

• Minimum credit requirement: 620
• APR: 7.46% – 35.97%
• Terms: 24 to 84 months
• Origination fee: 1.85% - 8.00%

Why we like it: You could be eligible to borrow as little as $1,000 or as much as $50,000 if you qualify for a personal loan from Upgrade.

Overview: This online lender not only offers a wide range of loan amounts that consumers can choose from, but borrowers can also receive their loans as quickly as one business day after verifications are cleared. Furthermore, you could get a discount on your rates — though the lowest rates require borrowers to sign up for autopay, and they would also have to repay some of their current debts directly.

However, not only does Upgrade charge an origination fee (ranging from (1.85% - 8.00%), but if borrowers are unable to keep up with their payments, this online lender also charges late and failed payment attempt fees.

Eligibility requirements: While Upgrade doesn’t offer clear-cut criteria on its website, to qualify for a personal loan, you must be at least 18 years old and a resident of the U.S. Upgrade will also take your credit profile, score, usage and history into consideration.

Read Upgrade review

Upstart: Best for thin credit histories

• Minimum credit requirement: 600
• APR: 4.37% – 35.99%
• Terms: 36 or 60 months
• Origination fee: 0.00% - 8.00%

Why we like it: Upstart uses artificial intelligence (AI) rather than traditional FICO Score-based models to make lending decisions.

Overview: Like Upgrade, Upstart offers flexible loan amounts to borrowers, providing larger personal loans for poor credit than many other conventional lenders. The minimum amount you can borrow depends on your state of residence, though Upstart doesn’t serve residents in Iowa or West Virginia.

Upstart’s application process may make it easier for some consumers with thin credit histories to qualify for a personal loan, since this lender also takes into account your level of education, areas of study and employment history. If you’re approved, you could receive your funds as soon as the next business day.

Eligibility requirements: Aside from meeting Upstart’s minimum credit score requirements, potential borrowers will also have to meet the following criteria:

• Be a U.S. citizen or a permanent resident
• Be at least 18 years old
• Provide an email address
• Provide their name, date of birth and social security number
• Have a full-time job or an offer to start within six months (or some form of regular income)
• Have a personal bank account

Read Upstart review

*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.

What are bad credit loans?

When lenders receive applications for personal loans, they typically take your credit score and overall creditworthiness into heavy consideration. Often, they require minimum credit scores to qualify — which can make it difficult for borrowers with poor credit to access these loans. Some lenders, however, offer personal loans for bad credit, meaning you can still qualify for a loan even if you have poor credit.

Unfortunately, those with unpolished credit scores often get saddled with higher interest rates and other less-than-ideal terms when applying for a loan. If you have bad credit, it’s typically difficult to qualify for a loan.

Bad credit loans generally come with fixed rates and are offered by lenders willing to loan you funds despite your limiting credit rating. These types of loans can help you build credit so you can eventually become eligible for better loan terms and other financial opportunities.

How to get a bad credit loan

It’s possible to get a personal loan with bad or no credit. However, if you take the time to work on your credit, you could save a lot of money by benefiting from a lower interest rate. If you need a personal loan now, however, consider these tips to finding the best personal loan for bad credit for you:

1. Check your credit score. Keeping tabs on your score can help you gauge which lenders you may qualify with. You can check your credit score at LendingTree to see where you stand, then find ways to improve your credit score. Since your score is generated by the information in your credit report, you can also request your credit reports from the three major bureaus through AnnualCreditReport.com to look for and dispute any errors.
2. Seek lenders that consider more than just your credit. Lenders whose assessments of your creditworthiness aren’t solely dependent on your FICO Score may be easier to qualify with, depending on your financial situation. For instance, some lenders may also take into account your income, employment and education level.
3. Prequalify for loans online. Through prequalification, you can check whether you’re likely to be approved for a loan and what rates you might be eligible for — the process won’t harm your credit score, as it only generates a soft inquiry. This can be a good way to assess what you could qualify for and how much it would cost you in the long term.
4. Compare loan offers. Once you’ve received a few personal loan offers, you’ll want to select the best option for you. That means reviewing interest rates, lender fee structures and available terms.
5. Submit an application. After narrowing down your options, it’s time to submit a formal application. This will trigger a hard inquiry, which will temporarily lower your credit score. After applying, you may need to wait a few business days to receive a loan decision. If your application is denied, you’ll typically be notified of the factors that contributed to the denial.

Where to find bad credit loans

Personal loans for bad credit can be found at a variety of types of institutions. At LendingTree, you can browse through our personal loan marketplace to compare eligibility requirements, interest rates, terms and loan amounts.

Here are a few different types of lenders that we offer where you can start your search:

• Banks: Some banks, such as Wells Fargo Bank, offer personal loans. However, you may be required to visit the bank’s local branch in order to go through the application process. While the online process can be convenient, visiting a branch can provide a personal touch when seeking a personal loan.
• Credit unions: Getting a personal loan through a credit union often requires borrowers to be members of that institution. For instance, with PenFed Credit Union, you don’t have to become a member to apply, but if you decide to proceed with your offer, you’ll have to become a PenFed member to close the loan.
• Online lenders: When applying for a personal loan through an online lender, the process is typically 100% remote. You’ll fill out an online application then submit documentation to verify your identity, income and address.

Types of loans for bad credit

Bad credit loans aren’t just limited to traditional, unsecured loans. Here are the types of loans you can get with bad credit.

Secured loans

With a secured loan, you’ll have to offer your lender an asset as collateral, like a car, a home or even a savings account. Because secured loans require valuable collateral, they’re often easier to obtain than unsecured loans and generally offer better rates, since the lender is at less risk.

Best for: Consumers with bad credit who own valuable collateral they can afford to lose should they default on the loan.

What to like: Borrowers with poor credit may qualify for lower interest rates since they’re putting up collateral.

What to watch out for: If you default on a secured loan, your lender may legally confiscate your collateral to recover the money. And if your lender doesn’t recoup the cost of the loan by redeeming your assets, you may be responsible for the difference.

Unsecured loans

Since unsecured loans don’t require borrowers to offer up collateral, lenders of these types of loans mostly rely on factors such as credit history, income and debt obligations to determine your eligibility. Unlike secured loans, if you default on an unsecured loan, your lender cannot seize your assets.

Best for: Most borrowers could qualify.

What to like: If you’re unable to repay your unsecured loan, your lender cannot seize your assets.

What to watch out for: Because these types of loans don’t require collateral, lenders that offer unsecured loans rely heavily on your creditworthiness when it comes to approval and offers. This means that if you don’t have good or excellent credit, you may have a hard time qualifying or receiving low interest rates. If you default, your credit score is likely to take a major hit.

Joint personal loans

If your credit score isn’t quite high enough to get you approved by a lender, consider getting the support of a loved one and file for a joint personal loan. This enables you to apply for a personal loan with a second person.

Best for: Borrowers with poor credit who have a supportive family member or friend willing to back their loan request.

What to like: This approach can make it easier for consumers with bad credit to be eligible for a loan, as it lowers the primary borrower’s risk.

What to watch out for: If you’re unable to make payments on this type of loan, not only can your lender attempt to collect from you, they can also try to collect on the loan from your co-borrower. This can also impact both of your and your co-borrower’s credit scores.

Payday loans

Payday loans are considered a more dubious type of loan, with astoundingly high fees and interest rates. These loans are typically less than $500 and are expected to be paid back within two to four weeks. Many people who take out payday loans often have to take out additional loans to pay off the original payday loan, trapping them in a cycle of debt.

Best for: Those who can afford the sky-high fees and can pay the loan back right away — though it’s wise to avoid this type of loan if you can.

What to like: Payday loans don’t require credit checks, and you can often get your money right away.

What to watch out for: These types of loans are often predatory and may charge as much as 400% APR.

Cash advances

Cash advances are small, short-term loans that you can get from your credit card company. In these instances, you can withdraw cash from your credit card from your total balance.

Best for: Those who are in financial emergencies and need money quickly.

What to like: You won’t have to go through a credit check and can receive money fast if you need it.

What to watch out for: You may have to pay a fee, and you’ll pay much higher APRs than you would on typical credit card purchases.

Bank agreements

If you have a strong relationship with your bank, you may be able to get what’s known as a bank agreement. This can take the form of a small, short-term loan or even the ability to overdraft on your account (up to a certain amount).

Best for: Consumers who have good histories with their bank.

What to like: If you’re in need of a short-term fix, you can use an already favorable relationship for financial assistance.

What to watch out for: This option may not be offered at all banks.

Bad credit home equity loans

If you have bad credit, you may be able to cash in on the equity you’ve built into your home using a home equity loan. These loans have fixed rates and are typically paid off between five and 30 years. Like personal loans, with a home equity loan, you’ll be given the money in a lump sum.

Best for: Those who need large sums of money and have equity in their home

What to like: Allows borrowers to take out up to 80% of their home’s value.

What to watch out for: Because you’re using your home as collateral, defaulting on your home equity loan may result in losing your home.

HELOC loans for bad credit

A home equity line of credit (HELOC) works similarly to a credit card; consumers can borrow as much as they need (up to a limit) against their home’s equity and only have to pay back the amount they took out. Unlike home equity loans, HELOCs typically have variable interest rates.

Best for: Borrowers who aren’t sure how much money they need and want to be able to borrow from their home’s equity over a period of time

What to like: Consumers can borrow and pay back as needed, and reuse the line of credit.

What to watch out for: Since interest rates are variable, borrowers may experience highly monthly payments.

Student loans for bad credit

If you’re in school or preparing to attend college and have poor credit, you may be able to get student loans for bad credit to help cover expenses. While many lenders don’t allow borrowers to use a personal loan toward education financing, lenders like Upstart do allow for it.

Best for: Those who are pursuing financing for educational purposes

What to like: Some student loan lenders will cover up to the entire cost of your tuition.

What to watch out for: Some lenders have strict or vague forbearance and deferment programs — or none at all — in case you’re unable to repay the loan down the road.

Understanding your credit score

If you have bad credit, your score in most scoring models likely falls somewhere between 300 and 579. Poor credit may be a result of the lack of time or opportunity to build up your credit, financial missteps — such as missing payments or having a high debt-to-income ratio — or perhaps being a victim of a scam or identity theft.

Whatever the reason, lenders often consider your credit score as a signal of your creditworthiness, or how likely you are to pay them back. As a result, poor-credit borrowers often have to pay higher APR rates than those with good or excellent credit.

If you’re looking for a personal loan, here are some of our most recent statistics on what kind of APR you may expect based on your credit score.

Average personal loan APR by credit score

Source: LendingTree data, Q2 2022

How to compare personal loans for bad credit

Compare lender APRs

The annual percentage rate (APR) is what your financial institution charges you for taking out a loan, but it’s not the same as the interest rate.

While the APR does include the interest rate you’ll be paying to borrow the funds, it gives you a more comprehensive picture of how much your loan will cost, as it also includes any additional fees. The lower the APR is, the less the loan will cost you over time. Therefore, you may want to choose a lender that can offer you a lower APR.

Account for fees

Your financial institution could charge you several fees for your personal loan in addition to the annual interest rate. Some of these fees could include administrative costs deducted upfront from the amount you’re borrowing, while others could be charged for making a late payment or paying off your loan before the end of its term.

Read lender reviews

Do your due diligence when deciding on the best lender for your needs. As part of your research, make sure to read online lender reviews.

Examine repayment terms

Your repayment terms can make a difference in how large or small your monthly payments will be. Generally, lenders offer unsecured personal loan repayment terms between 12 to 60 months, but you can find loans with long-term repayment plans.

The longer your payment term, the higher your APR rate may be, but you’ll pay in smaller monthly payments. You’ll also pay more in total interest over the life of a long-term loan. If your repayment plan is shorter, however, your APR rates may be lower but your monthly payments will be larger.

While some lending companies only offer two or three different repayment terms, other companies may have more flexible terms to choose from.

How to spot scams for bad credit loans

Unfortunately, some poor-credit loans really are too good to be true. To avoid being scammed by a shady lender, be on the lookout for the following signs:

• The lender demands you pay fees upfront: A legitimate lending institution won’t ask for payment before you’ve been approved and receive your loan. While some trustworthy lenders may require that you pay an application fee or a credit report fee, these are typically taken out of the loan you borrowed.
• The lender requires that you act immediately: If a lender is pressuring you to make a decision within a small window of time, that may be a red flag. A proper lender won’t corner you and understands that the decision to take out a loan may require some time to think over.
• The lender has no physical address: A reputable lender will have the company’s physical address listed on its website (not a post office box), and you’ll be able to confirm it by using Google Maps or a similar app.
• The lender is not registered in your state: Whether a lender is online or in person, in order to do business in your state, it must be registered in your state, according to the Federal Trade Commission (FTC). Lenders should note which states they are or aren’t registered with. If you’re suspicious of a scam, you can reach out to your state attorney general’s office to find out if that lender is registered where you live.
• The lender contacts you first: If you did not initiate contact with the lender, you may not want to answer any phone calls or other types of communication — it may be a ploy to get your financial information. A credible lender won’t cold call you, asking you to disclose your personal information.
• The lender doesn’t have a secure website: Some scammers may attempt to steal your information through their website. When researching bad credit loans, be sure to check that a website’s URL has the letter “s” following “http,” as well as a padlock icon on pages that ask you for your financial information.
• The lender doesn’t check your payment history: A reputable lender won’t guarantee your approval for a loan. Legitimate lending institutions will first want to see your payment history, your credit and DTI ratio and other financial information.

What to do if you’ve been scammed

If you find out you’ve been scammed, the first step is to contact law enforcement and file a police report. Unfortunately, there may not be much they can do, but you’ll want to document the crime as much as possible.

Once you’ve filed a police report, you should also report the scam to the FTC Internet Crime Complaint Center. By reporting it, you could potentially prevent others from being scammed in the future.

Frequently asked questions

The easiest way to get a loan if you have bad credit may be to seek a payday loan or pawn shop loan, since you’re not required to submit to a credit check for either. However, it’s typically best to avoid these types of loans, as they can be predatory and often involve exorbitant fees and high interest rates. Instead, consider applying for a loan with a reputable lender that offers personal loans to borrowers with bad credit.

While many trustworthy lenders won’t offer you a personal loan if you have a credit score of 550 or lower, there are other ways you may be eligible to get a loan.

• Apply with a co-borrower: Some lenders give consumers the option to submit a joint application. In this instance, the primary borrower can ask a loved one with a higher credit score to serve as a co-borrower, which can help lower their risk in the eyes of lenders.
• Apply for a secured loan: If you aren’t able to find a co-borrower, applying for a secured loan is another route you can take. For these types of loans, you’ll have to offer up collateral — such as a vehicle or bank account — to increase your creditworthiness. If you default on a secured loan, however, your lender can legally seize your collateral.

The list above outlines what we believe to be some of the best companies for loans for bad credit. To apply for a loan with the lenders mentioned in this article, you’ll typically need to submit to a credit check and verify your identity, address, income and employment status.

How much money you’ll be able to borrow with a bad credit loan will vary from lender to lender. Personal loans typically range anywhere from $1,000 to $50,000, though certain lenders may offer even smaller or larger loans in some cases.

Unfortunately, if you have bad credit and you receive a personal loan, chances are that you may be paying higher rates. This can make it more challenging to get out of debt, particularly if you’re already struggling financially. If you find yourself buried in debt, you can consider other options, such as bankruptcy.

There is no such thing as a no-credit-check personal loan. What you may encounter are predatory offers from unscrupulous lenders who’ll charge you exorbitant interest rates or offer unfavorable terms (or both), and require you to put up collateral, like your vehicle or next paycheck. These products are commonly known as payday loans.

While payday loans don’t require a credit check, they do often come with triple-digit APRs and short repayment periods. Because it can be easy to roll over your original payday loan into a new one, you could get stuck in an infinite cycle of debt that’s hard to escape.

Methodology

We looked at eight lenders that offered personal loan services with credit scores ranging from 585 to 640 to determine the best lenders for bad credit. By offering a detailed and objective account of each lender’s rates and terms, LendingTree’s goal is to provide you with all the information you need to make a financially sound decision specific to your situation.

Here’s the criteria we assessed to choose the best poor credit lenders:

• Minimum personal credit score requirements below 640
• Transparent rates and repayment terms
• Flexible loan amounts
• Low fees

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