Once you have a solid cost estimate for your new pool and you’ve decided to finance it with a loan, the next step is to figure out your monthly payments so you can budget for them.
Enter a loan amount, repayment term, and estimated APR to see how much you might pay each month and the total interest.
How much does it cost to build a pool?
An above-ground pool costs $2,500 on average, according to HomeAdvisor, while an inground pool can run you $50,000 or more. The price can vary based on the size of the pool and materials you use.
When you finance with a personal loan, your annual percentage rate can be anywhere from 6% to 36%, and some lenders will finance up to $100,000 over a two- to 12-year repayment term.
Your credit score is an important factor lenders consider when they decide your loan amount and rate. On average, NerdWallet members with excellent credit (720 or higher FICO) received pre-qualified loan offers with rates between 10.7% and 12.5% in 2020, according to marketplace data. Lenders also consider factors like your income and existing debt.
A $50,000 loan with a six-year repayment term and a 11% APR would require monthly payments of $952. That loan would cost $68,544 in total, and $18,544 of that would be interest.
How to compare pool loans
Here are a few features to consider as you compare offers.
Annual percentage rates: APRs are the best apples-to-apples comparison for personal loans because they include the interest rate and other fees a lender charges. You can use this rate to compare offers between loans or to compare a loan with other financing options like a home equity loan.
Repayment terms: Most personal loan terms span from about two to seven years, but some lenders offer extended repayment terms on home improvement loans. For example, online lender Lightstream lets borrowers choose a repayment term up to 12 years. Your repayment term determines your monthly payment and the loan’s total interest — the longer your repayment term, the more you pay in interest.
Funding time: Some online lenders say they can fund a loan the day your application is approved or the following day. Banks and credit unions, however, can take a few days. Most personal loans can be funded within a week, though.
Ability to pre-qualify: Many online lenders let you pre-qualify to see your potential rate, loan amount and repayment term without affecting your credit score. You can pre-qualify with multiple lenders at once on NerdWallet to nail down another estimate of your monthly pool loan payments.
Bad credit is not something that can be solved overnight. Although you can work to repair your credit, progress usually takes time. Sometimes, you do not have time to wait for your credit score to improve because you need a loan right now.
Life has a habit of throwing unexpected expenses in your path such as an unexpected medical bill or car repair. Whatever has you seeking a personal loan, it is likely something that you need the money for soon. It might be ideal to wait for your credit score to improve but that is not always possible.
Luckily, there are many online lenders that are willing to provide bad credit personal loans for $5,000 or more. Let’s take a look at some of the best lenders who provide personal loans to people with bad credit.
Best Personal Loans for Bad Credit
You can absolutely secure a personal loan with bad credit. However, you should keep in mind that you will likely not receive the best terms. With bad credit, lenders are likely to charge you a higher interest rate for the loan. Make sure you absolutely need a personal loan before moving forward.
CashUSA
CashUSA serves as your one-stop shop to connect with online lenders that offer personal loans with bad credit. With a quick request process, CashUSA will work to connect you to a lender that is willing to work with you.
CashUSA lenders provide personal loans with a loan amount of $500 to $10,000. APR can vary widely based on the individual lender and your credit score, but it can range between 5.99% to 35.99%. The interest rate is variable with terms between 90 days and 72 months. Funds are deposited directly into your bank account.
Full review of CashUSA
BadCreditLoans.com
As the name suggests, BadCreditLoans.com is a place to find unsecured personal loans if you have bad credit. BadCreditLoans.com is not a direct lender but the site will connect you to lenders that are willing to work with you.
Lenders in the BadCreditLoans.com network offer loan amounts up to $10,000. Although most of the personal loans through these lenders are smaller than $10,000, it is possible to obtain the full $10,000.
The APR on personal loans can range between 5.99% and 35.99%. Interest rates are variable but generally on the shorter side, starting at just 3 months. You can get the money deposited in your bank account as soon as the next business day.
Full review of BadCreditLoans.com
PersonalLoans.com
PersonalLoans.com works to connect borrowers with personal loan offers between $500 and $35,000. If you have bad credit, then you should not expect to be approved for the maximum $35,000 loan. Although not everyone is able to qualify for the maximum amount, every applicant can request the amount they are seeking.
The APR on personal loans ranges from 5.99% to 35.99%. The APR you qualify for will be largely based on your credit score. One big benefit offered by PersonalLoans.com is the flexibility of repayment terms which range from 6 to 72 months. You’ll have the ability to choose the timeframe you’d like to repay the loan.
A final benefit of these personal loans is that there is no prepayment penalty. You’ll be able to repay your debt as quickly as you’d like without any repercussions.
Full review of PersonalLoans.com
Avant
Although Avant typically works with borrowers of average to above-average credit, it is still a company worth looking into. You do not need good credit to apply for an Avant personal loan.
The company offers personal loans with loan amounts between $1,000 and $35,000 with APRs that range from 9.95% to 35.99%. Many Avant borrowers are using the personal loan as a way to consolidate their debts. If you are using this strategy to rebuild your credit, the Avant may be the right choice for you.
Full review of Avant
OneMain Financial
You can obtain a personal loan from OneMain Financial with a loan amount of between $1,500 and $25,000. However, the company has set slightly different limits for each state, so you will need to confirm your state’s limit with your local office.
As an applicant, you’ll have the option to pursue a secured or unsecured personal loan. If you have poor credit scores, then a secured loan may be the better option.
The interest rates will vary greatly based on your credit history but you can expect an APR range from 25.10% to 36%. The maximum loan term we’ve seen in 60 months. Make sure you ask about the origination fee as it varies per state.
One thing to note about these personal loans is that they will need to be executed after communication with a loan officer. That means you’ll need to make an appointment with a loan officer and talk to them in-person or over the phone.
Full review of OneMain Financial
NetCredit
This Chicago-based lender works with borrowers across the country to provide bad credit personal loans. The company offers unsecured personal loans with a loan amount of $1000 up to $10,000.
NetCredit evaluates each loan application on a case-by-case basis. Your loan offer will likely vary greatly based on your credit score and the state you live in.
Since the company works in many states, the APR range is extremely wide, from 36% to 155%. You’ll need to check out NetCredit in your state to better understand what this company can offer you. There may also be an origination fee depending on where you live.
Full review of NetCredit
Bottom Line
A personal loan can seem difficult to obtain at a bank or credit union if you have bad credit. However, the lenders above can help you get approved for a loan to fund whatever life throws your way.
While it is possible to obtain a personal loan with a poor credit score, it may not be the best financial move, especially if you want to use it to consolidate credit card debt. It is more than likely that you will be offered unfavorable loan terms and high interest rates, which could cost you thousands over the course of your loan.
You could be using those funds to pay down other debts to improve your credit score. With a higher credit score, you’ll be able to obtain more favorable personal loan terms in the future. With that said, bad credit installment loans are still usually a better option than payday loans. Just make sure you can afford the monthly payments before you move forward with a personal loan.
Before applying for short-term loans, think of other ways that you could fund the immediate emergency. You could sell belongings, pick up a side hustle, or find a way to fix the problem yourself. If you are interested in rebuilding your credit score, then take advantage of our free DIY guide.
It happens to the best of us. You might have been totally on top of your budget, and then an unexpected something turns up to throw you off course. Maybe it’s a medical bill, an unforeseen car repair, or a layoff. But regardless of the specifics, you find yourself in need of cash you just don’t have.
If you’re struggling with bad credit the situation is just that much more stressful. Because a poor credit score and history can make it very difficult to get your hands on the unsecured personal loans you need to get through a tough time. And that, in turn, can just drive your credit score even lower if it means you’ll end up defaulting on existing payment commitments.
Unsecured Loans for People with Bad Credit
Fortunately, there are some online lenders who understand that life isn’t always ideal. They’ve created accessible unsecured loans that you aren’t automatically disqualified for just because your credit history has a few blemishes.
Of course, as with any loan, you will be paying interest for the privilege of borrowing the money. And the lower your credit score, the higher your interest rate will be on average. So, it’s important to reserve the use of an unsecured loan for true financial emergencies.
It’s also a good idea to shop around and find the lender that can offer you the best terms for your specific needs and credit standing. So without further ado, here are five of the best places to choose from when you need an unsecured loan even though you have bad credit.
CashUSA
By matching you with a variety of lenders, CashUSA allows you to get an unsecured loan with bad credit.
Plus, their sprawling network of providers can offer sizable unsecured loans of up to $10,000. This can be a godsend if you’re dealing with unexpected medical bills or other major expenses.
Your loan request can be approved within a matter of minutes and funded in as little as one business day, and all credit types are eligible (though interest rates and terms will vary based on your standing).
Loan Amount: $500 – $10,000+
APR: 5.99% – 5.99%
Term: 3 – 72 months
Read our full review of CashUSA
MoneyMutual
Although it’s not ideal, it’s a fact: most Americans couldn’t come up with even a few hundred dollars to spare in the face of an emergency.
That’s why MoneyMutual offers fast, short-term loans of up to $2,500, even to borrowers with bad credit.
Their services have been trusted by more than two million customers to date, and once approved, you can receive your funds via direct deposit, sometimes in less than 24 hours after approval. There’s no cost to fill out the online application, and it takes just minutes.
Loan Amount: Up to $2,500
APR: Variable
Term: Variable
Read our full review of MoneyMutual
PersonalLoans.com
Crediful’s rating
Whether it’s a quick $500 to cover rent or a serious financial undertaking costing tens of thousands of dollars, PersonalLoans.com can match you with lenders offering the funds you need fast. And there is no minimum credit score.
Better yet, you’ll have up to 72 months (i.e, six years) to repay it in easy monthly installments, making these unsecured loans a great choice for debt consolidation or to pay off a large standing balance at a lower interest rate.
Loan Amount: $500 – $35,000
APR: 5.99% – 35.99%
Term: 3 – 72 months
Read our full review of PersonalLoans.com
Bad Credit Loans
It’s right there in the name: this personal loan company is all about matching you with the lenders who will fulfill your needs, even if you have bad credit.
Loan amounts range from a quick $500 to a more substantial $10,000. Interest rates start as low as 5.99%. Bad Credit Loans is a great first stop on your unsecured loan shopping trip — especially since it’s totally free (and easy!) to submit an application.
Loan Amount: $500 – $10,000
APR: 5.99% – 35.99%
Term: 3 – 36 months
Read our full review of Bad Credit Loans
CashAdvance
If you just need a small amount of cash and can pay it off quickly, CashAdvance is a great place to get a personal loan, regardless of your credit score.
Although their lenders tend to max out loan agreements at $1,000 and carry fairly high interest rates, you can get the money delivered directly to your bank account quickly and easily.
Loan Amount: $100 – $1,000
APR: 200% – 2000%
Term: Variable
Read our full review of CashAdvance
How to Improve Your Credit Score to Get Better Loans Later On
These lenders offer a much-needed service to borrowers with imperfect credit scores. However, it’s in your best interest to work to improve your credit score over time. That way, you’ll be able to get better loan terms later on down the line. And that includes when you want to take on major financial commitments like homeownership.
If your credit history is dotted with blemishes, it can feel overwhelming, or even impossible, to get back on track. But that’s not the case! By implementing sustainable changes and habits and being persistent, you can rebuild your credit score and create the financial freedom you deserve.
Budgeting and Paying Off Debt
Start by looking at your budget and seeing if you can make any cuts. This will save you money that you can then funnel directly toward your standing debt totals. Some people start with the highest-interest account first, known as the “avalanche” approach.
This approach will save you more money over time. Others prefer the “snowball” method, which means starting by paying off the account with the lowest total and using that success as motivation to tackle your bigger debt projects.
No matter which way you go about it, you can achieve the debt-free lifestyle of your dreams! And sometimes, a personal loan is exactly what you need to start moving in the right direction.
Written
by Alayna Okerlund, Content Management Specialist for BestCompany.com
Most people try not to think about taxes until
they absolutely have to. Thanks to the recent tax season, you’re probably still
thinking about your tax situation, especially if you have a large tax bill
looming over your shoulder.
Nothing is worse than realizing you don’t have
enough money to pay your taxes on time. There are several options you can take
to make sure you do pay off your tax bill; however, many people end up
procrastinating their tax payments. They might think obtaining enough money is
possible if they wait, or are unaware of what payment options are available.
Little do they know, putting off tax payments
can financially hurt in more ways than one.
Potential Consequences
Multiple consequences arise when you fail to
pay your taxes on time.
Penalties and Interest
The longer you procrastinate your tax bill
payments, the more money you will likely end up paying.
The IRS will give you what is called a “failure-to-pay penalty” if you do not pay
your taxes by the tax due date. The penalty is a recurring monthly charge that
you must pay until you’re done paying off your tax bill. In addition to this
penalty, you will have to pay whatever interest is accruing during the time
you’re not paying your taxes. Over time, you will be spending more money than
if you were to pay your tax bill on time.
Keep in mind that you can receive a different
penalty for failing to file your tax return. Consider filing your taxes
regardless of whether you can afford to pay your taxes on time. Filing your
taxes can help you avoid the “failure-to-file penalty” and other tax issues.
Wage Garnishment/levies
The IRS can also garnish/levy your wages. If a
wage levy takes place, the IRS website states that “part of your wages
will be sent to the IRS each pay period until
You make other arrangements to pay
your overdue taxes,
The amount of overdue taxes you
owe is paid, or
The levy is released.
Part of your wages may be exempt from the levy
and the exempt amount will be paid to you. The exempt amount is based on the
standard deduction and an ‘amount determined’ calculated in part based on the
number of dependents you are allowed for the year the levy is served.”
Indirect Credit Impact
Paying your taxes late could indirectly put
your credit
in a bind.
Late tax payments and unpaid taxes might not show up on your credit reports, but there are ways tax liens can indirectly affect your credit.
According to Experian, “paying extra money in penalties and
interest because you sent in your tax payment late could make it more
challenging to keep up with the rest of your bills. If this happens, and you
fall behind on any credit obligations as a result, your late tax payment could
indirectly harm your credit. Payment history is the most important factor in
your credit score, counting for about 35 percent of your score, so late credit
payments reported by your creditors can damage your credit quickly.”
Potential Tax Payment Solutions
Paying your taxes is important. Paying on time
would be best, but if you can’t manage to pay your taxes before the tax due
date, here are a few options to consider:
Payment
Plan/installment Agreement
The IRS has a few different payment plans that
you can request. The IRS payment plan options include the
following:
Pay now plan
Full amount in one payment
$0 to apply
No interest or penalties
Short-term plan
120 days or less
$0 to apply
Interest + Penalties
Long-term plan option 1
More than 120 days
Automatic payments via direct
debit
$31 to apply online
$107 to apply via phone, mail, or
in-person
Interest + Penalties
Long-term plan option 2
More than 120 days
Electronic, non-direct debit
payment (Direct Pay or credit/debit card)
$149 to apply online
$225 to apply via phone, mail, or
in-person ($43 for low income)
Interest + Penalties
Personal Loans
A personal loan might not be your first
option, but it can be helpful in some unpaid tax situations.
You can obtain a personal loan
from credit unions, banks, and online lenders. So depending on a few factors
like credit score, interest rates, applications, etc., you could receive
funding within a short time.
It could be smart to get a short-term personal
loan if you are planning on using it to pay off your tax bill. However, it’s
important that you compare lenders and consider interest rates, your particular
financial situation, potential repayment plans, and other payment options
before you decide to take out a personal loan for tax payment purposes.
Credit Cards and Debit Cards
Paying your tax bill with a credit card may be
an option for you, depending on your circumstances. However, it’s generally not
the first option people consider due to a variety of fees and high tax bills.
It’s important to note that paying your taxes
with a credit card could be a good option if you can afford to pay off your
credit card bill. If you can’t afford to pay it off, however, your credit score
could suffer.
Before you start making tax-related payments
with a credit/debit card, visit the IRS website to learn about processing fees and
actions, payment limitations, and more.
The Bottom Line
Tax bills shouldn’t be put on the backburner
for too long. Although owing the IRS money doesn’t put you in an ideal
situation, sometimes it can seem inevitable. Knowing what can happen when you
fail to pay your taxes on time and what you can do about it will help you avoid
dealing with future tax debt. Consider conducting your own personal research to
figure out which tax relief options are best for your specific
situation.
If you notice that your credit situation is indirectly suffering from tax debt, consider looking into credit repair services sooner rather than later. After all, poor credit can restrict your loan options and harm your overall financial situation.
Written
by Alayna Okerlund, Content Management Specialist for BestCompany.com
Most people try not to think about taxes until
they absolutely have to. Thanks to the recent tax season, you’re probably still
thinking about your tax situation, especially if you have a large tax bill
looming over your shoulder.
Nothing is worse than realizing you don’t have
enough money to pay your taxes on time. There are several options you can take
to make sure you do pay off your tax bill; however, many people end up
procrastinating their tax payments. They might think obtaining enough money is
possible if they wait, or are unaware of what payment options are available.
Little do they know, putting off tax payments
can financially hurt in more ways than one.
Potential Consequences
Multiple consequences arise when you fail to
pay your taxes on time.
Penalties and Interest
The longer you procrastinate your tax bill
payments, the more money you will likely end up paying.
The IRS will give you what is called a “failure-to-pay penalty” if you do not pay
your taxes by the tax due date. The penalty is a recurring monthly charge that
you must pay until you’re done paying off your tax bill. In addition to this
penalty, you will have to pay whatever interest is accruing during the time
you’re not paying your taxes. Over time, you will be spending more money than
if you were to pay your tax bill on time.
Keep in mind that you can receive a different
penalty for failing to file your tax return. Consider filing your taxes
regardless of whether you can afford to pay your taxes on time. Filing your
taxes can help you avoid the “failure-to-file penalty” and other tax issues.
Wage Garnishment/levies
The IRS can also garnish/levy your wages. If a
wage levy takes place, the IRS website states that “part of your wages
will be sent to the IRS each pay period until
You make other arrangements to pay
your overdue taxes,
The amount of overdue taxes you
owe is paid, or
The levy is released.
Part of your wages may be exempt from the levy
and the exempt amount will be paid to you. The exempt amount is based on the
standard deduction and an ‘amount determined’ calculated in part based on the
number of dependents you are allowed for the year the levy is served.”
Indirect Credit Impact
Paying your taxes late could indirectly put
your credit
in a bind.
Late tax payments and unpaid taxes might not show up on your credit reports, but there are ways tax liens can indirectly affect your credit.
According to Experian, “paying extra money in penalties and
interest because you sent in your tax payment late could make it more
challenging to keep up with the rest of your bills. If this happens, and you
fall behind on any credit obligations as a result, your late tax payment could
indirectly harm your credit. Payment history is the most important factor in
your credit score, counting for about 35 percent of your score, so late credit
payments reported by your creditors can damage your credit quickly.”
Potential Tax Payment Solutions
Paying your taxes is important. Paying on time
would be best, but if you can’t manage to pay your taxes before the tax due
date, here are a few options to consider:
Payment
Plan/installment Agreement
The IRS has a few different payment plans that
you can request. The IRS payment plan options include the
following:
Pay now plan
Full amount in one payment
$0 to apply
No interest or penalties
Short-term plan
120 days or less
$0 to apply
Interest + Penalties
Long-term plan option 1
More than 120 days
Automatic payments via direct
debit
$31 to apply online
$107 to apply via phone, mail, or
in-person
Interest + Penalties
Long-term plan option 2
More than 120 days
Electronic, non-direct debit
payment (Direct Pay or credit/debit card)
$149 to apply online
$225 to apply via phone, mail, or
in-person ($43 for low income)
Interest + Penalties
Personal Loans
A personal loan might not be your first
option, but it can be helpful in some unpaid tax situations.
You can obtain a personal loan
from credit unions, banks, and online lenders. So depending on a few factors
like credit score, interest rates, applications, etc., you could receive
funding within a short time.
It could be smart to get a short-term personal
loan if you are planning on using it to pay off your tax bill. However, it’s
important that you compare lenders and consider interest rates, your particular
financial situation, potential repayment plans, and other payment options
before you decide to take out a personal loan for tax payment purposes.
Credit Cards and Debit Cards
Paying your tax bill with a credit card may be
an option for you, depending on your circumstances. However, it’s generally not
the first option people consider due to a variety of fees and high tax bills.
It’s important to note that paying your taxes
with a credit card could be a good option if you can afford to pay off your
credit card bill. If you can’t afford to pay it off, however, your credit score
could suffer.
Before you start making tax-related payments
with a credit/debit card, visit the IRS website to learn about processing fees and
actions, payment limitations, and more.
The Bottom Line
Tax bills shouldn’t be put on the backburner
for too long. Although owing the IRS money doesn’t put you in an ideal
situation, sometimes it can seem inevitable. Knowing what can happen when you
fail to pay your taxes on time and what you can do about it will help you avoid
dealing with future tax debt. Consider conducting your own personal research to
figure out which tax relief options are best for your specific
situation.
If you notice that your credit situation is indirectly suffering from tax debt, consider looking into credit repair services sooner rather than later. After all, poor credit can restrict your loan options and harm your overall financial situation.
Over 24 million Americans will take out an unsecured personal loan this year, and that number is expected to rise in the years to come. So what exactly can you do with a personal loan?
Debt consolidation is one of the most popular uses because many consumers with credit card debt can find a better interest rate with a personal loan.
Many people use personal loans for other expenses as well. They’re usually reserved for expensive items that are difficult, if not impossible, to pay for all at once even if you have a beefed-up savings account.
For example, you might need a new roof or want to update your kitchen before you sell your house. Or perhaps your wedding plans cost more than your current cash flow or you need money to help pay for an adoption.
Personal loans make it easy to finance big-ticket items without draining your savings all at once. And while banks and credit unions have historically been the place to go for personal loans, online lenders now offer easy access to financing, often with lower interest rates.
Compare the Best Personal Loan Lenders and Apply Online
Compare offers from multiple lenders to make sure you’re getting the best personal loan rates. Look at the interest rate and origination fees (plus any other applicable fees) because that will tell you how much your total loan will cost.
Each lender’s annual percentage rate (APR) helps you compare these numbers as a single percentage. Also, make sure you can afford the monthly payments and that you’re comfortable with the length of the repayment period.
Without further adieu, we present the nine best personal loans. Because we included lenders focusing on different types of borrowers, we encourage you to read through the list to find the best fit for you.
Credible
If you’re looking to compare multiple, personalized offers for personal loans, Credible is your best bet.
Simply complete Credible’s short pre-qualification form and you can instantly receive real offers from as many as 8 different lenders. The entire process takes less than two minutes and will not affect your credit. It’s also completely free!
Lastly, and importantly, your personal information will not be shared with lenders. Comparing offers on Credible will ensure you do not receive any follow-up or outreach from the lenders in their marketplace.
Check your interest rate from the industry’s best personal loan lenders today!
Read our full review of Credible
Prosper
If you’re interested in a peer-to-peer loan, check out Prosper. Rather than submitting a loan application and getting an answer right away, your personal loan needs to get funded by investors.
Prosper will review key components of your request along with a snapshot of your credit profile. While the process is a bit slower because of this extra step, it opens the door for a wider range of borrowers.
The minimum credit score is 640 but the company says that the average borrower boasts a 710. There’s no exact minimum for income requirements, but again the average for a Prosper borrower is over $88,000 per year.
How much can you borrow with a Prosper loan?
Amounts start at $2,000 and are capped at $40,000. Since more credit types are accepted, there’s a broader range of APRs, moving anywhere between 6.95% and 35.99%.
You can also choose between loan terms, which last either three years or five years. You’re likely to save money on interest with the shorter term, but you can potentially lower your monthly payment amount if you spread it out over the longer period.
Expect to pay an origination fee with your Prosper loan, which can cost anywhere between 2.4% and 5% of your loan amount. The fee comes directly out of your personal loan before it’s deposited into your bank account.
Read our full review of Prosper
FreedomPlus
FreedomPlus offers personal loans to borrowers with good credit. While their main focus is primarily on debt consolidation loans, you can use the money for a number of purposes, such as home improvement or a wedding. The minimum amount you can borrow is $10,000 while the maximum is set at $35,000.
What kind of APR can you expect from FreedomPlus?
Depending on your credit, interest rates can start as low as 4.99% or go all the way up to 29.99%. You’ll also need to earn at least $30,000 a year through verifiable income.
With FreedomPlus, you can get a same-day personal loan assuming that you’ve provided a completed application with all required supporting documentation early enough on a day that their offices are open. Otherwise, funds can be deposited into your bank account within 48 hours.
An interesting benefit that comes with FreedomPlus is the potential to receive discount points. You can get your APR lowered by using a co-signer, taking advantage of debt consolidation direct pay, or by having at least $40,000 in your retirement account.
Overall, FreedomPlus is a transparent lender with generally favorable loan terms and some extra perks for those who qualify.
Read our full review of FreedomPlus
Payoff
Payoff allows you to consolidate credit card debt and instead manage a single installment loan with what could very well be a lower interest rate.
Many Payoff borrowers also experience an increase in their credit score, averaging at least 40 points when paying off $5,000 or more in credit card debt.
Loans start off at $5,000 and go up to $35,000 depending on your needs. APRs range from 8% to 25%, which includes an origination fee of 2% to 5%. Loan terms are also flexible, lasting between two and five years.
The minimum credit score is 660. Your debt-to-income ratio must be 50% or less, and you should also have at least three years of good credit.
You also can’t have any current delinquencies and any from the last 12 months should be for 90 days or less. If you meet these requirements, a Payoff personal loan may be a good fit for you.
Once you’re approved, Payoff will give you your free FICO score each month. This helps you track your progress in improving your credit as you pay down your debt.
You’ll also get job loss support in case you lose your job, and check-in calls throughout the year with the member experience team.
Read our full review of Payoff
Upstart
Upstart offers personal loans particularly for younger individuals who may not have an extensive credit history. Most borrowers are actually in their early 20s to mid-30s, and many of whom have recently graduated from college.
Rather than focusing solely on credit, they consider other factors as well when considering each loan application.
Upstart’s interest rates start at 7.46% and go up to 29.99% — quite a competitive range. You can borrow anywhere between $1,000 and $50,000 for up to five years, but you’ll need a credit score of at least 620 (with the average coming in at 692). If you hit financial troubles, they also offer flexible repayment terms.
If you have a solid work or education history that shows you’re a reliable person, you could find the online personal loan you need with Upstart. Each underwriting process is tailored specifically to the individual giving you the best chance for success.
Read our full review of Upstart
Best Egg
For borrowers with good credit seeking competitive interest rates, Best Egg is a strong option to consider. They’ve funded more than $2 billion since their opening in 2014 and have assisted over 200,000 clients.
For those with the strongest credit scores and an annual income of at least $100,000, APRs are as low as 5.99%. Otherwise, they range up to 29.99%.
Loan amounts are as low as $2,000 and as high as $50,000 if you meet special qualifications. Origination fees range between 0.99% and 5.99% and are taken out of your funds.
Once you’ve had a personal loan for at least six months, you can actually apply for a second loan if necessary. Your combined balances can’t exceed $50,000. However, it gives you more flexibility in your financing, where many lenders prohibit more than one outstanding loan.
Most of their borrowers use their funds to consolidate debt, but you can use the money for just about anything. Whether it’s for medical expenses, a new kitchen, or your upcoming wedding, they allow for a large variety of loan purposes.
If you have strong credit and are in a relatively high-income bracket, you can take advantage of some of their competitive rates and terms. It’s quick and easy to get an offer and won’t hurt your credit. In fact, you won’t have any hard pull at all until you’re ready to sign your loan agreement.
Read our full review of Best Egg
SoFi
SoFi is an online lender that works with a variety of borrowers to provide personal loans. The lender offers a variety of loans, but personal loans are one of its specialties.
The best part about SoFi is its transparency. The company offers its borrowers a quick and easy process that is clear the whole way. The personal loans offered through SoFi have no origination fees or pre-payment penalties, so you can more easily understand the loan terms.
SoFi offers unemployment protection. If you lost your job, then you would be able to put your loans into a temporary forbearance with little to no hassle.
Borrowers with a solid credit history and high income will have attractive rate offers made through a transparent lending process. Many of SoFi’s borrowers have high incomes and credit scores. The minimum credit score allowable is 680. The median income of borrowers is $106,000.
Fixed-rate loans through SoFi have a range between 5.99% APR and 16.740% APR. If you sign up for autopay, you may be able to save money through a 0.25% discount on your interest rate. The company offers personal loans with a minimum of $5,000 and a maximum of $100,000. However, it is possible to receive a higher loan amount with a strong application.
If you have a high income and good credit score, then SoFi is a great place to find your personal loan.
Read our full review of SoFi
Avant
Avant has served close to half a million borrowers since opening its doors online in 2012. It’s a great middle-of-the-road option because most Avant borrowers have either average or above-average credit. The average score range is actually between 600 and 700.
If you have strong credit, you can get an APR as low as 9.95%. The loan amount ranges from $1,000 to $35,000. With such a low minimum, you can get a low-rate personal loan for a short-term need, whereas many other lenders require a minimum of $5,000.
Many Avant borrowers use their personal loan for debt consolidation. Avant states that six months into the loan, those borrowers see an average 12 point increase in their credit scores.
Funds can be directly deposited into your account as soon as the next business day. You also get to track your VantageScore for free each month.
Another unique feature offered is their late fee forgiveness program. If you’re late making your payment, you’ll be charged a late fee. If, however, you pay your next three consecutive bills on time, your fee will be refunded in full.
You can access your loan dashboard online or through a smartphone app, making this lender user-friendly and competitive.
Read our full review of Avant
LendingClub
One of the country’s oldest peer-to-peer lenders, LendingClub offers unsecured personal loans to a wide range of borrowers. While most borrowers have excellent credit, it’s still possible to get your personal loan funded with a lower credit score.
The maximum loan is higher than most lenders at $40,000. The minimum loan amount is just $1,000. Your fixed interest rate can range anywhere between 5.32% and 30.99%.
On top of your monthly payments, you’ll be charged an origination loan when you get your cash. Again depending on your credit, you’ll pay anywhere between 1% and 6% of your loan amount.
For the maximum $40,000 loan, that can cost as low as $400 or as much as $2,400. You don’t need the money upfront; the fee will be taken out of your personal loan before receiving it.
Wondering about LendingClub’s credit requirements?
At a minimum, you’ll need a 600, but most successful applicants are closer to a 700 score. There isn’t a salary requirement but the average is just shy of $80,000.
Once you apply, you can choose from various loan terms to best suit your budget and desired repayment term. As a P2P lender, investors will need to fund your personal loan request. During that process, you’ll need to start submitting financial documentation to support your application.
Read our full review of LendingClub
OneMain
Having bad credit doesn’t mean you can’t work with an established lender like OneMain. APRs are above average, ranging from 25.10% to 36% but the minimum credit score is only 550.
While most of their personal loans are secured with collateral such as a vehicle, you might qualify for an unsecured loan if you pay a higher APR. You can potentially borrow as little as $1,500 or as much as $25,000, depending on what you qualify for.
They certainly have a strong track record, serving over 10 million customers in total. With over 1,700 physical branches across the country, it’s easy to get in-person support whenever you need it.
You can apply online, but if there’s a branch nearby, you’ll need to go in for a meeting to verify your information before finalizing your loan agreement. This final step can be performed over the phone if you don’t live near a physical location.
Once you’ve received a personal loan from OneMain, you get to choose from several flexible payment options. You can pay online or through the lender’s smartphone app.
There are also traditional payment options, such as at a branch or through the mail. Finally, you can even stop at a Walmart to pay there. It’s a straightforward and transparent process, particularly if you need access to bad credit financing.
Read our full review of OneMain
How We Picked the Best Personal Loans
We reviewed countless lenders to come up with the best places to get a personal loan online.
To make it to our list, each lender had to meet the following five criteria:
Diversity in loan options
Wide borrower approval rate
Dependability & Customer Service (or strong reputation and reviews from borrowers)
Competitive loan rates — because regardless of what you’re using the personal loan for, you want it to cost as little as possible
Special features, since many online lenders provide convenient benefits and services for borrowers.
Note: Geographic availability was also an important factor we considered.
Because each state has different regulations, many lenders only focus on a few select locations when they first open. Then, as they gain traction, they move into more and more states. We know our readers live all over the country, so we focused on lenders with a large geographic footprint.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
A credit builder loan is a type of loan that helps you rebuild poor credit or establish credit for the first time. Its sole purpose is to help you raise your credit score, and having a good credit score—or even any score at all—isn’t required to apply for one.
Taking out a credit builder loan means borrowing a specific sum of money—but you don’t have access to the funds. Instead, it gets deposited into a savings account that you can’t access until your loan term ends and you’ve made all of your payments.
How do credit builder loans work?
A common issue people face when trying to improve their credit is the inability to qualify for a loan or a credit card—an essential component to building credit. If you carry poor credit, lenders are less inclined to lend you money. But if you can’t get approved by any lenders, you never get the chance to build up your credit.
A credit builder loan is a low-risk way for lenders to loan money to those with poor credit, while also providing people the chance to build a strong credit history.
A credit builder loan functions in the opposite way of a traditional loan. Instead of gaining immediate access to funds that are repaid later, the money you borrow gets set aside in a secured savings account while you make monthly payments toward the balance. This allows you to make consistent, on-time payments on the loan that will show up on your credit report, thus improving your credit score.
How can credit builder loans raise my credit score?
As with any other type of loan, responsible credit usage is key to improving your credit score. Lenders will report the payments you make on a credit builder loan to at least one of the major credit bureaus, who will then put this information in your credit report.
If you make your payments on time for the duration of the loan, you show that you’re a reliable borrower. This is reflected on your credit report, which is what your credit score is based on. Keep in mind that since this isn’t a traditional loan, making your payments early won’t have any advantages over just paying your monthly balance on the agreed-upon schedule.
While you might start off with a low credit score, a year or two of responsible borrowing with this kind of loan will help those numbers rise. Payment history is a critical credit scoring factor—it accounts for 35 percent of your FICO® score. By responsibly managing a credit builder loan, you have the chance to build a positive payment history.
How much does it cost?
Costs will always vary by lender, so it’s important to shop around and compare options to find the best rate. Here are some of the common costs to expect with a credit builder loan:
Administrative fees: An administrative fee of $8 – $15 is usually required before you can qualify for the loan.
Interest rates: Credit builder loans come with interest, and the rate will vary depending on your lender and your unique credit history. Typical interest costs are usually between six and 16 percent.
Payments: The cost of your monthly payments depends on how much you choose to borrow. Most loan amounts might be anywhere from $300 to $1,000—choose an amount
Is a credit builder loan worth it?
The answer to this question will always depend on your unique financial situation. A credit builder loan can be a helpful tool if you need to build your credit from the ground up or improve a poor credit score. Here are some things to consider that might indicate a credit builder loan wouldn’t be your best option for building credit:
You need access to funds right away: Remember that a credit builder loan works in the reverse way of a traditional loan. Instead of using the loan to access borrowed funds, you’ll be contributing your funds to a secured savings account that you can’t access until the loan term is up. If you’re looking to take out a loan because you need immediate funding, a credit builder loan won’t help you.
You don’t have enough money to dedicate to a credit builder loan: A credit builder loan will only improve your credit score if you make your payments consistently and on time for the duration of the loan. If you have to stretch your budget in order to fund a credit builder loan, you risk missing a payment and ultimately damaging your score. Make sure you can afford to contribute to this type of loan before committing to it.
Where to get a credit builder loan
Credit builder loans are offered by many financial institutions, including credit unions and local banks. You usually won’t find them at big banks, as credit builder loans aren’t profitable enough and are rarely advertised. Check these places instead:
Credit unions: To get a loan from a credit union, you need to become a member. Common membership requirements include living in the area where the credit union is based or working for a certain company. You might also have to pay a membership fee.
Community banks: Smaller, local banks usually offer credit builder loans as well. You can search for local banks in your area and call them to inquire about what types of loans they provide.
Online lenders: It’s possible to find online lenders who offer credit builder loans, and finance companies are becoming aware of the benefits of offering them.
Wherever you decide to go, make sure their lender reports payments to at least one of the major credit bureaus: Experian®, Equifax® and TransUnion®. Ideally, they report to all three—this is necessary in order to have your payment history reflected on your credit report.
How else can I increase my credit score?
A credit builder loan isn’t the only way to build credit. Even if you have a poor credit score, there are other options to improve your credit standing.
Secured credit cards
This is a great option for poor credit carriers because approval is basically guaranteed. The only requirement is a cash deposit, which also becomes your credit limit. Your activity on a secured credit card gets reported to the credit bureaus just like with a credit builder loan, so you have the opportunity to demonstrate a positive repayment history and boost your credit score.
Become an authorized user
If you can’t qualify for a credit card of your own, a low-risk way to build credit is to become an authorized user on someone else’s credit card. This allows you to use the credit card owner’s line of credit, but the card owner is the only one responsible for payment. If you have a friend or family member who’s willing to add you to their card—and they have responsible credit usage habits—their payments and activity will appear on both of your credit reports, giving you the chance to raise your score.
Secured personal loan
A secured personal loan requires you to put up collateral in order to borrow funds. This makes it less risky for lenders to loan to you, since they can seize your collateral if you don’t make your payments as scheduled. While this is an option to build up your credit, the possibility of losing your collateral makes it riskier.
Unsecured personal loan
This type of loan isn’t backed by collateral, but interest rates are typically much higher, making this a more expensive way to build your credit. They’re also harder to get approved for since the lack of collateral means a higher risk for lenders. You might need a slightly higher credit score to qualify for an unsecured loan, and you can expect to pay more interest on it than you would on a secured loan.
Is a credit builder loan right for me?
Your credit score influences almost all of the major financial decisions you’ll make in a lifetime. Maintaining a good credit standing will impact your ability to finance things like a car, a home or a college education. If you have a poor credit history, finding ways to improve your credit score is a responsible and worthwhile goal.
A credit builder loan can be a helpful tool if you need to build your credit from the ground up or improve a poor credit score. Remember that this type of loan won’t give you immediate access to any funds, so keep this in mind when deciding whether or not it’s right for you. But if you have a small sum of money you can afford to part with, putting it toward a credit builder loan is certainly an option to start or improve your credit building journey.
Empowering yourself financially requires discipline and patience, especially if you’re climbing out of a bad credit history. But the possibility of financial freedom exists for anyone willing to commit to the process, and there are many resources available to help you along the way. The consultants at Lexington Law can provide you with tools to help you secure a better financial future and guide you through your credit building journey.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
A credit builder loan is a type of loan that helps you rebuild poor credit or establish credit for the first time. Its sole purpose is to help you raise your credit score, and having a good credit score—or even any score at all—isn’t required to apply for one.
Taking out a credit builder loan means borrowing a specific sum of money—but you don’t have access to the funds. Instead, it gets deposited into a savings account that you can’t access until your loan term ends and you’ve made all of your payments.
How do credit builder loans work?
A common issue people face when trying to improve their credit is the inability to qualify for a loan or a credit card—an essential component to building credit. If you carry poor credit, lenders are less inclined to lend you money. But if you can’t get approved by any lenders, you never get the chance to build up your credit.
A credit builder loan is a low-risk way for lenders to loan money to those with poor credit, while also providing people the chance to build a strong credit history.
A credit builder loan functions in the opposite way of a traditional loan. Instead of gaining immediate access to funds that are repaid later, the money you borrow gets set aside in a secured savings account while you make monthly payments toward the balance. This allows you to make consistent, on-time payments on the loan that will show up on your credit report, thus improving your credit score.
How can credit builder loans raise my credit score?
As with any other type of loan, responsible credit usage is key to improving your credit score. Lenders will report the payments you make on a credit builder loan to at least one of the major credit bureaus, who will then put this information in your credit report.
If you make your payments on time for the duration of the loan, you show that you’re a reliable borrower. This is reflected on your credit report, which is what your credit score is based on. Keep in mind that since this isn’t a traditional loan, making your payments early won’t have any advantages over just paying your monthly balance on the agreed-upon schedule.
While you might start off with a low credit score, a year or two of responsible borrowing with this kind of loan will help those numbers rise. Payment history is a critical credit scoring factor—it accounts for 35 percent of your FICO® score. By responsibly managing a credit builder loan, you have the chance to build a positive payment history.
How much does it cost?
Costs will always vary by lender, so it’s important to shop around and compare options to find the best rate. Here are some of the common costs to expect with a credit builder loan:
Administrative fees: An administrative fee of $8 – $15 is usually required before you can qualify for the loan.
Interest rates: Credit builder loans come with interest, and the rate will vary depending on your lender and your unique credit history. Typical interest costs are usually between six and 16 percent.
Payments: The cost of your monthly payments depends on how much you choose to borrow. Most loan amounts might be anywhere from $300 to $1,000—choose an amount
Is a credit builder loan worth it?
The answer to this question will always depend on your unique financial situation. A credit builder loan can be a helpful tool if you need to build your credit from the ground up or improve a poor credit score. Here are some things to consider that might indicate a credit builder loan wouldn’t be your best option for building credit:
You need access to funds right away: Remember that a credit builder loan works in the reverse way of a traditional loan. Instead of using the loan to access borrowed funds, you’ll be contributing your funds to a secured savings account that you can’t access until the loan term is up. If you’re looking to take out a loan because you need immediate funding, a credit builder loan won’t help you.
You don’t have enough money to dedicate to a credit builder loan: A credit builder loan will only improve your credit score if you make your payments consistently and on time for the duration of the loan. If you have to stretch your budget in order to fund a credit builder loan, you risk missing a payment and ultimately damaging your score. Make sure you can afford to contribute to this type of loan before committing to it.
Where to get a credit builder loan
Credit builder loans are offered by many financial institutions, including credit unions and local banks. You usually won’t find them at big banks, as credit builder loans aren’t profitable enough and are rarely advertised. Check these places instead:
Credit unions: To get a loan from a credit union, you need to become a member. Common membership requirements include living in the area where the credit union is based or working for a certain company. You might also have to pay a membership fee.
Community banks: Smaller, local banks usually offer credit builder loans as well. You can search for local banks in your area and call them to inquire about what types of loans they provide.
Online lenders: It’s possible to find online lenders who offer credit builder loans, and finance companies are becoming aware of the benefits of offering them.
Wherever you decide to go, make sure their lender reports payments to at least one of the major credit bureaus: Experian®, Equifax® and TransUnion®. Ideally, they report to all three—this is necessary in order to have your payment history reflected on your credit report.
How else can I increase my credit score?
A credit builder loan isn’t the only way to build credit. Even if you have a poor credit score, there are other options to improve your credit standing.
Secured credit cards
This is a great option for poor credit carriers because approval is basically guaranteed. The only requirement is a cash deposit, which also becomes your credit limit. Your activity on a secured credit card gets reported to the credit bureaus just like with a credit builder loan, so you have the opportunity to demonstrate a positive repayment history and boost your credit score.
Become an authorized user
If you can’t qualify for a credit card of your own, a low-risk way to build credit is to become an authorized user on someone else’s credit card. This allows you to use the credit card owner’s line of credit, but the card owner is the only one responsible for payment. If you have a friend or family member who’s willing to add you to their card—and they have responsible credit usage habits—their payments and activity will appear on both of your credit reports, giving you the chance to raise your score.
Secured personal loan
A secured personal loan requires you to put up collateral in order to borrow funds. This makes it less risky for lenders to loan to you, since they can seize your collateral if you don’t make your payments as scheduled. While this is an option to build up your credit, the possibility of losing your collateral makes it riskier.
Unsecured personal loan
This type of loan isn’t backed by collateral, but interest rates are typically much higher, making this a more expensive way to build your credit. They’re also harder to get approved for since the lack of collateral means a higher risk for lenders. You might need a slightly higher credit score to qualify for an unsecured loan, and you can expect to pay more interest on it than you would on a secured loan.
Is a credit builder loan right for me?
Your credit score influences almost all of the major financial decisions you’ll make in a lifetime. Maintaining a good credit standing will impact your ability to finance things like a car, a home or a college education. If you have a poor credit history, finding ways to improve your credit score is a responsible and worthwhile goal.
A credit builder loan can be a helpful tool if you need to build your credit from the ground up or improve a poor credit score. Remember that this type of loan won’t give you immediate access to any funds, so keep this in mind when deciding whether or not it’s right for you. But if you have a small sum of money you can afford to part with, putting it toward a credit builder loan is certainly an option to start or improve your credit building journey.
Empowering yourself financially requires discipline and patience, especially if you’re climbing out of a bad credit history. But the possibility of financial freedom exists for anyone willing to commit to the process, and there are many resources available to help you along the way. The consultants at Lexington Law can provide you with tools to help you secure a better financial future and guide you through your credit building journey.
Financial emergencies can happen at any time, and when they do, you need to respond quickly. But this can be challenging if you don’t have the funds available in savings. When this happens, taking out a personal loan can be a good way to cover the shortfall.
You may think that the process of applying and getting approved for a personal loan would be tedious and time-consuming, but it’s not. Many online lenders will give you access to the funds within the same day or by the next business day.
6 Lenders That Provide Quick Cash Loans
Listed below are six online lenders that provide quick access to personal loans.
1. Upstart
Upstart helps borrowers that have strong financial futures but are still in the process of building their credit. The company will consider a variety of factors, including your degree and your job history. You do need to have a credit score of at least 620 to qualify.
The approval and funding process is quick with Upstart, and you could receive the money within one business day. Upstart does charge origination fees and late fees.
Loan amount: $1,000 to $50,000
APR range: 5.67% to 35.99%
Repayment terms: 3 to 5 years
2. Best Egg
Best Egg caters to creditworthy borrowers that are looking for ways to consolidate their debt. You’ll need to have good to excellent credit to qualify, and you can receive the funds as soon as the next business day.
However, Best Egg isn’t going to be the best option for borrowers with bad credit. And the company does charge origination and late fees.
Loan amount: $2,000 to $35,000
APR range: 5.99% to 29.99%
Repayment terms: 3 to 5 years
3. Avant
Avant is a great option for less creditworthy borrowers who are looking to take out a quick loan. The company offers same-day funding, flexible repayment terms, and refinancing options.
And the company is very transparent about its fees and gives borrowers the option to prequalify for a loan. However, you won’t have the option to apply with a co-signer.
Loan amount: $2,000 to $35,000
APR range: 9.95% to 35.99%
Repayment terms: 2 to 5 years
4. Discover Loans
Discover Loans are a great option for borrowers with stellar credit that are looking for a low interest rate and fast funding. You can receive the funds within the next business day, and the company doesn’t charge any origination fees.
However, Discover does put some limitations on what borrowers can do with a personal loan. You can take out a personal loan to consolidate debt or fund a large home improvement project. These cash loans are not designed to pay for college expenses or pay down the balance on a Discover credit card.
Loan amount: $2,500 to $35,000
APR range: 6.99% to 24.99%
Repayment terms: 3 to 7 years
5. Lending Club
Lending Club was one of the first peer-to-peer (P2P) lenders and is one of the best lenders for borrowers looking for fast, convenient online cash loans. You’ll apply on Lending Club’s website, and the company will match you with investors that are willing to fund the loan.
If you’re approved for a loan the funds will be deposited in your bank account within a week. You should expect to pay an origination fee between 1% and 6% of the total loan amount.
Lending Club is ideal for borrowers with good credit history and a low debt-to-income ratio.
Loan amount: $1,000 to $40,000
APR range: 6.95% to 35.89%
Repayment terms: 3 to 5 years
6. OneMain Financial
OneMain Financial is another lender that is willing to work with borrowers that have bad credit. The company doesn’t have any minimum credit score requirements, and it offers same-day funding on cash loans.
However, you will pay for this kind of convenience. The company charges higher interest rates than others, and you’ll have to pay an origination fee.
Loan amount: $1,500 to $20,000
APR range: 18.00% to 25.99%
Repayment terms: 2 to 5 years
Things to Keep in Mind
Keep in mind that when we say you can receive the funds within the same day or by the next business day, it’s not guaranteed. There are a variety of factors that will influence how quickly you receive the cash loan. These factors include things like the rules of your bank, the loan amount, and when you apply.
If you’re not sure if your credit scores are high enough to qualify with any of these lenders, then you might consider a lending marketplace. With a lending marketplace, you’ll apply, and the company will match you with multiple lenders that are willing to work with you. This lets you compare interest rates from multiple lenders without further damaging your credit.
And finally, when you’re feeling a financial pinch, it can be tempting to settle for the easiest option. But don’t make the mistake of turning to predatory payday lenders that charge insanely high interest rates.
Choosing the wrong lender will only hurt your financial situation over the long haul. If you’re this desperate for cash, consider asking friends or family to loan you the money. Or you can look for creative ways to earn some extra money.
Summary
If you’re looking for a fast cash advance loan, any of the lenders on this list will make an excellent choice. The application process is fast, and if you’re approved, you can receive the funds with the same day or by the next business day.
Make sure you understand the terms and conditions of that loan before agreeing to anything. And start taking steps to save an emergency fund so you won’t find yourself in this situation again.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Getting credit when your score is low or you don’t have a strong credit history can be challenging. One way many people solve this problem on their first loan is by getting a cosigner. But this isn’t always an option for everyone. Find out more about this process, as well as how to get a loan without a cosigner, below.
What Is a Cosigner, and Why Would You Want One?
A cosigner is a person who agrees to be responsible for a debt if you can’t or don’t pay it. Typically, you get a cosigner when you don’t have sufficient creditworthiness on your own to qualify for the loan you need. The cosigner’s credit score and history are considered when approving the loan.
Some reasons you might want a cosigner include:
You’re young and haven’t had time to build a credit history yet, so you don’t qualify on your own for the loan you want.
You need better credit to qualify for more favorable terms.
You have credit history, but some financial mistakes in the past have left it lackluster and you want assistance getting new credit so you can rebuild your credit history.
Reasons You Might Not Have a Cosigner
Not everyone in the above listed scenarios needs has a cosigner, though. Here are some reasons why you might not have a cosigner even if having one could help you get a loan.
You Don’t Have Access to a Cosigner
First, you simply might not have access to someone who can act as cosigner. Cosigners must have better credit than you to do much good, and they also have to be willing to put that good credit on the line to help you.
If you don’t make the payments on your loan, the cosigner’s credit is also hurt. They might also end up on the hook for the payments. This risk can limit who is willing to act as a cosigner.
You Want to Take Full Responsibility for the Loan
In some cases, you might have access to cosigners but want to avoid using them. Perhaps you want to avoid tying up a family member’s credit with your own loan. In other cases, you may simply want to avoid having loved ones be that involved in your financial affairs.
This is obviously a personal decision, and you have to decide what would be best for you and your relationships.
Tips for Getting a Personal Loan With No Cosigner
Whether you decide against a cosigner or don’t have access to one, you do still have options. Check out these tips for how to get a loan without a cosigner.
Shop Around
Some lenders are more flexible than others. Credit unions—especially ones in which you belong to already—tend to have more flexible requirements than larger banks. And online lenders can often afford to be more flexible because they aren’t covering the costs of physical locations.
Just remember not to apply for every loan you see. Each loan application can result in a hard inquiry on your credit, which can damage your score a little each time. Instead, read through all the requirements and talk to the lender if possible to determine whether you are likely to qualify for a loan before you apply.
Improve Your Credit Score
If the loan isn’t an immediate pressing concern, take some time to improve your credit score and creditworthiness to boost your chances at approval. Some steps to take include:
Requesting your credit reports from all three major bureaus and reviewing them for any errors. If you find inaccurate negative items, you can dispute them by sending a communication such as an email or letter to the credit bureau in question.
Making good choices for your credit now, including making all your payments on time and paying down any open credit card balances you might have as much as possible.
Improving your debt-to-income ratio. This is how much debt you have compared to how much you make. You can improve it by paying down some of your debt, finding ways to make more reportable income or both.
Modify Your Loan Request
Try to get a loan for less money. The smaller the loan, the smaller the risk for the lender, and many might be willing to give you a chance for a lower amount than you originally wanted.
Get a Secured Loan
A secured loan is one that you back with collateral, typically in the form of a physical asset, like a car or a house. If you ever fail to pay back the loan, the lender can put a lien on the collateral. The benefits of this type of loan are that they can be fairly easy to get and typically designed to help you improve your credit, which means the lender probably reports to all three major credit bureaus.
There are a couple of downsides to this option. First, you pay interest, so the loan does cost you money. Second, you risk losing ownership of a physical asset, which could cause you even more problems in the long run if you can’t make your payments.
Additional Tips for Getting a Student Loan with No Cosigner
All of the above listed tips can apply when you’re trying to get a student loan as well—particularly a private student loan. But here are a few more tips that are specific to student loans.
Apply for Federal Loans
The Free Application for Federal Student Aid process doesn’t take credit into account when considering students for financial aid. You can potentially get direct subsidized loans, direct unsubsidized loans, direct PLUS loans or parent PLUS loans via this process, all without a credit check.
Build Your Credit Profile in Other Ways
If you don’t qualify for federal loans and want to see private student loan options, find ways to build your credit profile before you apply if possible. For example, you can:
Apply for a secure credit card or no-credit credit card and use the account responsibly. Make sure the credit card you get reports to all major credit bureaus.
Get added as an approved user on someone else’s credit card. Make sure the card in question reports credit information for approved users and that the person who adds you to their account uses their credit cards responsibly.
Consider signing up for a product that allows your rent and utility payments to be reported to the credit bureaus to help you build positive payment history. RentReporters and Experian RentBureau are just two options.
Find the Best Loan for You
Many loan options exist, and many lenders specialize in credit for people who are building or rebuilding their credit histories. There’s a good chance you can find something that suits your needs by following the steps above. Alternatively, you can get a cosigner now and refinance the loan in the future when your credit is stronger.
Some loans also come with options for having the cosigner released after a sufficient period of timely payments and responsible account management. No matter your financial standing, it’s a good idea to start by looking at your credit report whenever you plan to apply for a loan.
If you find questionable information that could hamper your chances at approval, consider working with Lexington Law for professional credit repair.
Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.
Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
