May 12, 2022 by Brett Tams

The 13 Best Bad Credit Loans of 2022

APR range
Best for No Minimum Credit Score
Contributor Dana Miranda is a Certified Educator in Personal Finance® who has written about work and money for publications including Forbes, The New York Times, CNBC, Insider, NextAdvisor and Inc. Magazine.

Key Features

Company	APR with Autopay	Loan Amounts	Min. Credit Score
SeedFi	7.42% – 29.99%	$300 – $4,000	520		GET DETAILS
Happy Money	5.99% – 24.99%	$5,000 – $40,000	600		GET DETAILS
Stilt	7.99% – 25%	$1,000 – $35,000	None		GET DETAILS
Universal Credit	8.93% – 35.93%	$1,000 – $50,000	560		GET DETAILS
Best Egg	5.99% – 35.99%	$2,000 – $50,000	640		GET DETAILS
LendingClub	7.04% – 35.89%	$1,000 – $40,000	600		GET DETAILS
Prosper	7.95% – 35.99%	$2,000 – $40,000	600		GET DETAILS
OneMain Financial	18% – 35.99%	$1,500 – $20,000	None		GET DETAILS
Avant	9.95% – 35.99%	$2,000 – $35,000	580		GET DETAILS
NetCredit	19.9% – 155% (range varies by state)	$1,000 – $10,000	None		GET DETAILS
Upgrade	5.94% – 35.97%	$1,000 – $50,000	580		GET DETAILS
LendingPoint	5.94% – 35.97%	$2,000 – $36,500	600		GET DETAILS
Upstart	5.22% – 35.99%	$1,000 – $50,000	580		GET DETAILS

SeedFi

Key Features

Minimum credit score

3.5 out of 5 Overall

Build savings while you repay
Two monthly payments aligned to payday
Access $300 to $4,000 today

3.5 out of 5 Overall

Loans between $5,000 and $40,000
Pay off credit card debt
No prepayment fees

3.5 out of 5 Overall

AI-powered lending for partner banks
Considers more than your credit history
Loan amounts as low as $1,000

3.5 out of 5 Overall

APR: 7.99% – 25%
Loan amounts: $1,000 – $35,000
Minimum credit score: None

3.5 out of 5 Overall

Funding within one day
Fixed interest rate
Rate discounts for debt pay off

3.5 out of 5 Overall

Funding within three days
Adjust your payment due date
Variety of terms

3.5 out of 5 Overall

Borrow up to $40,000
Funding within 48 hours
No prepayment penalty

3.5 out of 5 Overall

Peer-to-peer lending
Next-day funding
No prepayment penalty

3.5 out of 5 Overall

No minimum credit score
Secured loans available
Interest rates from 18% – 35.99%

3.5 out of 5 Overall

Next-day funding
Minimum 580 credit score
Not available in New York

3.5 out of 5 Overall

Next-day funding
No prepayment penalty
Interest rates between 19.9% and 155%

3.5 out of 5 Overall

Checking, credit and loans in one platform
No prepayment penalties
Next day funding

3.5 out of 5 Overall

Next-day funding
No co-sign loans
Not available in Nevada or West Virginia

Loan amounts
3.5 out of 5 Overall

Types of Loans for Bad Credit

Is There a Real Way to Get a Loan with Bad Credit?
3 out of 5 Overall

Debt consolidation loan. This is a type of personal loan where the loan proceeds go to your creditors instead of directly to you. Debt consolidation or refinancing is a way to pay off high-interest debt like credit cards and pare down your monthly obligations to a single payment.

Secured loan. A secured personal loan is one where you put up collateral, like a car (title), boat, jewelry or something else of value. If you don’t repay the loan on time, the lender will own the collateral. These types of loans are usually easier to get when you have bad credit, because your collateral reduces the lender’s risk of losing money if you don’t repay.

Unsecured loan. An unsecured personal loan is one without collateral to back it. Typical lenders require good or excellent credit for an unsecured loan, but the lenders in this list make these loans available to borrowers with lower credit scores.

Home equity loans. If you have a low credit score but you’ve paid off a lot (or all) of the mortgage for a home you own, you could take out a loan based on how much your home is worth. These loans tend to come relatively easily, because they’re backed by your home, which is an incredibly valuable asset.

Credit builder loans. These loans, from lenders like SeedFi, may be structured as personal loans or something else, but they function similarly. They often come in low amounts so you have low monthly payments, and part of the loan might be withheld in a savings account as collateral until you repay.

Payday loans. If you can’t qualify for a traditional personal loan, payday lenders are lying in wait to get you money in an emergency. Payday loans are meant to carry you between paychecks, and you qualify based on your expected income rather than your credit score. They come with effective interest rates of around 400% — or about $15 to $10 for every $100 you borrow — which can compound quickly if you’re unable to repay within two weeks.

Loan Risks to Consider

640
600

APR. Annual percentage rate is the annualized amount you’ll pay over the amount of your loan. Bad credit personal loan rates tend to fall between 9% and 35%. The lower your credit score and the longer your repayment period, the higher your rate will likely be.

Origination fees. Most lenders charge a fee out of your loan right up front, typically as a percentage of the loan amount. An origination fee could lop off around 2% or 3% of your loan before you receive it, so count that in when you figure out how much to borrow.

Late fees. If any monthly payment is late, some lenders charge a late fee that’s a percentage of the payment due or a flat fee. Those fees get added to your loan balance and then accrue interest, so they can add up over time.

Prepayment penalties. Some lenders charge you a fee if you repay ahead of schedule. This is as silly as it sounds, so it’s becoming pretty rare. But it’s an option, so keep an eye out for prepayment fees in your loan agreement, and plan your repayment accordingly.

Upstart is a platform that supports partner lenders in making loans to borrowers using proprietary AI to assess creditworthiness. The platform looks at factors beyond your traditional credit score (though it also does a credit check), including education and income, so you could have a higher chance of approval if you have a low or no credit score but other positive factors.

Application for credit. When you apply for credit — a loan, a new credit card, a mortgage, etc. — lenders typically report the request to credit bureaus. Any request for credit can briefly knock your credit score down, and multiple requests in a short period can have a serious impact in the short term (because lenders don’t want to lend to someone taking on a bunch of debt all at once). A soft credit check for prequalification doesn’t get reported, so comparing rates doesn’t hurt your score.

Debt-to-income ratio. Your monthly loan payment gets added to your debt-to-income ratio (DTI), the difference between how much you make each month and how much you owe in debt payments. A high DTI, above 35% to 45%, can hurt your ability to get additional credit or loans, including a mortgage.

Payment history. Make on-time payments, and your credit score will likely improve! Just make sure the lender reports payments to all three credit bureaus (they usually mention that on their site or in their FAQs, or you can ask customer service). If you make late payments or don’t repay the loan in full, that’ll be a negative mark on your credit report.

Who Can Take out a Loan With Bad Credit?

APR range

Minimum credit history. Lenders might have a low or no credit score requirement, but they could still have a minimum credit history — how long you’ve had activity on your credit report. The minimum is usually three years, but consult each lender to learn theirs.

Debt-to-income ratio. Lenders consider the other debt you’re repaying when assessing your ability to repay their loan. Your DTI tells them how much room you have to add an extra debt payment to your bills each month.

Income. With any credit score, lenders look for a stable source of regular income to make sure you have a way to make monthly payments. This number could be even more important if you have a low credit score, because some lenders lean more heavily on this factor to determine your eligibility.

Education. Some lenders look at your education to assess the likelihood you’ll earn the money necessary to repay a loan. This can be especially helpful for recent grads with a short credit history or no credit score.

Bill pay history. Companies often report delinquent bills to credit bureaus, which are reflected in your credit score. But a positive payment history for everyday bills and rent don’t traditionally help your score. Some lenders use alternative assessment methods that include positive payment history, and you can sign up for third-party platforms that’ll report your history to credit bureaus to help your score.

How to Get a Loan If You Have Bad Credit

Best for Fair Credit Loans

Consider your options. Ask whether a personal is the best way to cover your costs. Maybe you could avoid the debt and instead delay the purchase or negotiate an expense you’re facing.

Review your finances. When you review loan offers, you’ll want to know what you can comfortably pay each month for a few years.

Check your credit score. Applying for a loan dings your credit report, so you don’t want to apply for loans you aren’t confident you’ll qualify for. Check your score first, then find lenders that match your situation.

Compare lenders. Check reviews like this to compare loan offers side by side. This lets you see lender options and requirements to find the ones that align with your needs.

Get pre-qualified. This is how you find out whether you’re likely to get accepted by a specific lender based on your specific financial information. Give a little information to go through a soft credit check that won’t affect your score, and see pre-qualified offers. Then you can decide whether it’s worth applying in full.

Review the loan details. Before you put in an official application, check the details of the offer carefully. Do the repayment period and monthly payment fit with your financial plan?

Complete an application. Once you choose a loan, fill out an application with the lender. They’ll do a hard credit check and — if you were accurate and honest on the initial check — likely approve you for the loan.

Receive the funds. If you’re using a loan to pay off debts, the funds usually go directly to your other lenders. If you’re getting funds for yourself, they’ll be deposited directly into your bank account, usually within one to three business days with online lenders.

Set up a payment plan. Stay on top of payments, and this loan can help you improve your credit score. If it fits your circumstances, set up automatic payments, which can help you pay on time and usually comes with an interest rate discount. If you’re paying back other debts at the same time, use a repayment method like the debt snowball or avalanche to determine where to direct your money whenever you’ve got extra to put toward your financial goals.

Where to Get a Bad Credit Loan

19.9% – 155% (range varies by state)

Banks and credit unions. Institutions in your town or online could make personal loans and let you keep all of your finances in one place, including banking, credit cards, investing, loans and insurance.

Online lenders. These companies (all of the lenders in our list above) usually only offer loans and credit but not other banking or financial services — though there are some exceptions that focus on lending but also offer other services.

Marketplaces. Online marketplaces like Fiona, AmOnee or OppLoans aggregate offers for all types of loans and credit cards so you can see pre-approved rates with a single soft credit check. They often work with partner lenders that prefer good or excellent credit borrowers, so you might come up with nothing if you have a low credit score. But they can be a way to quickly assess your options without checking a bunch of lender sites.

Frequently Asked Questions (FAQs) About Getting a Bad Credit Loan

Best for Borrowers Without Traditional Credit History

Follow these steps to get a personal loan with a low credit score:

4.5 out of 5 Overall

OneMain financial makes secured or unsecured personal loans to borrowers with no minimum credit score. You can borrow up to ,000 with a term of two, three, four or five years. The trade off for the flexibility in borrowing is relatively high interest rates: APRs range from 18% to 35.99%.

Key Features

580

What is the Easiest Type of Loan to Get with Bad Credit?

Key Features

580

Where Can I Borrow Money Immediately?

Avant is a personal loan lender that’s friendly to fair-credit borrowers: Most Avant borrowers have credit scores between 600 and 700, but you may be eligible for a loan with a credit score as low as 580. Get a loan for up to ,000 with funding as soon as the next day after you’re approved.

Yes, secured loans are a traditional option for borrowers with low credit scores. And lots of companies have cropped up in recent years to offer innovative ways to assess a borrower’s creditworthiness without relying solely on a credit score. You’ll likely have to show stable income, education in a lucrative field and/or a history of on-time bill or rent payments. Check out Stilt, OneMain Financial and NetCredit above for loans with no minimum credit score

2 out of 5 Overall
ARP range