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Bad credit loans

Q: What are the pros and cons of bad-credit loans?

Pros:Can get much-needed fundsCan pay for emergenciesEasy approval on payday loans and cash advance appsQuick fundingSome loan types can build creditCons:High fees, and APRs can be in the triple digits, depending on loan typeApproval for bad-credit personal loans can be difficultPayday loans and cash advance apps won’t build creditMay lead to a cycle of debt

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Filters$20,000 loan amount and 700-749 credit score, ordered by APR

LightStream

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Rates from (APR)

6.94-25.29%⁴

Loan term

2 - 7 years

Loan amount

Up to $100,000

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LightStream: Best for home improvement loans

Lightstream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses like home improvements or weddings. Funds are available as soon as the same day you apply and there are no origination fees. Rates are also among the lowest we've seen — as of this writing, Lightstream's lowest APR beats SoFi's advertised lowest APR by 1 percentage point. But you'll need good credit to qualify.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 700

Origination fee: None

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: As soon as the same business day

Upstart

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Rates from (APR)

7.80-35.99%

Loan term

3, 5 years

Loan amount

Up to $50,000

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Upstart: Best for fast personal loans for all credit types

Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.

Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 620

Origination fee: 0% to 12%

Check processing fee: None

Do they allow a cosigner: No

Late fee: 5% of late payment or $15 (whichever is greater)

Time to fund: As soon as 1 - 3 business days

Splash Financial

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Rates from (APR)

7.99-17.97%

Loan term

3 - 6 years

Loan amount

Up to $35,000

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Splash Financial: Best for quick loans for good credit

It's worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). The platform offers loans from a wide range of lenders, and next-day funding is available. Plus, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email. Loans are available up to $100,000 if you apply via Splash's website.

Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere. Splash is not an option for borrowers with bad credit.

Prepayment penalty: None

Unsuccessful payment fee: Varies by lender

Minimum credit score: 700

Origination fee: 3.99% to 7.49%

Check processing fee: None

Do they allow a cosigner: No

Late fee: Varies by lender

Time to fund: Funding in as little as one business day for eligible applicants

Discover Personal Loans

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Rates from (APR)

7.99-24.99%

Loan term

3 - 7 years

Loan amount

Up to $40,000

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Discover Personal Loans: Best for no origination fees (and low rates)

Discover Personal Loans offers low APRs, repayment terms up to seven years, no origination fees, nationwide availability, and doesn't require your Social Security number to prequalify on its site. You'll need to have an annual income of at least $40,000, and a FICO score 660 or higher, to be eligible. If your credit score is fair or poor, you'll need to go elsewhere, as Discover doesn't allow cosigners.

Funds are available as soon as the next business day after loan approval.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 660

Origination fee: None

Check processing fee: None

Do they allow a cosigner: No

Late fee: $39

Time to fund: Funds can be sent as soon as the next business day after acceptance

Happy Money

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Rates from (APR)

8.95-17.48%

Loan term

2 - 5 years

Loan amount

Up to $40,000

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Happy Money: Best for consolidating credit card debt

Happy Money has been in operation since 2009 (formerly known as Payoff). It's an option for fair-credit borrowers (plus those with better credit), and notably has a relatively low top-end APR. In other words, you could qualify for a lower rate with Happy Money with fair credit, relative to other lenders that offer fair-credit loans. The company does charge an origination fee on some loans, up to 5%, but that's not as high as some other lenders' origination fees.

You should be prepared to wait a few days to get your money, as funding can take three to five days once approved. And loans aren't available in Massachusetts or Nevada. Happy Money has an A+ rating with the BBB and is ideal for debt consolidation and credit card consolidation loans.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 640

Origination fee: 2% to 5%

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: As soon as 2 - 5 business days after verification

SoFi

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Rates from (APR)

8.99-29.99%³

Loan term

2 - 7 years

Loan amount

Up to $100,000

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SoFi: Best for personal loans for excellent credit

SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn't require your Social Security number.

The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don't have good credit. You also won't be able to apply with a cosigner, since SoFi doesn't accept cosigners; nor does it offer secured personal loans.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: Does not disclose

Origination fee: 0% - 7%

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: Typically within a few days, given approval and bank account verification

Best Egg

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Rates from (APR)

8.99-35.99%

Loan term

2 - 5 years

Loan amount

Up to $50,000

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Best Egg: Best for high close rates if pre-approved

Best Egg is a solid lender for a wide range of borrowers. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 9.99% with Best Egg.

Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 600

Origination fee: 0.99% to 9.99%

Check processing fee: $7

Do they allow a cosigner: No

Late fee: $15

Time to fund: As soon as 1 - 3 business days after successful verification

Prosper

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Rates from (APR)

8.99-35.99%

Loan term

2 - 5 years

Loan amount

Up to $50,000

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Prosper: Best for peer-to-peer lender

Prosper is the only remaining true P2P marketplace in the peer-to-peer lending space that connects borrowers with individual investors for some loans. If you apply for a loan with Prosper, the funding may come from an individual who has chosen to invest in you. Prosper offers personal loans between $2,000 and $50,000 with terms between 2 and 5 years, and funding as soon as one business day. You can use a personal loan through Prosper for a variety of purposes, including debt consolidation and home improvement. The platform has excellent customer service reviews on Trustpilot, as well.

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 640

Origination fee: 1% to 9.99%

Check processing fee: $5 or 5% of the payment (whichever is lower)

Do they allow a cosigner: Yes

Late fee: 5% of late payment or $15 (whichever is greater)

Time to fund: 1 business day following acceptance of loan offer, completion of all necessary verification steps and final approval. One business day is also dependent on your bank’s ability to quickly process the transaction.

LendingClub

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Rates from (APR)

9.06-35.99%⁵

Loan term

2 - 5 years

Loan amount

Up to $40,000

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LendingClub: Best for online experience

LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It's easy to prequalify with LendingClub, especially if you're uncomfortable providing your Social Security number, as the company doesn't require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)

While prequalification is not a guarantee that you'll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you're less likely to have your application declined once you apply (if you've already prequalified). LendingClub may charge an origination fee between 3% and 8%.

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 660

Origination fee: 3% to 8%

Check processing fee: $7

Do they allow a cosigner: No, but co-borrowers allowed

Late fee: 5% of late payment or $15 (whichever is greater)

Time to fund: One business day

Avant

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Rates from (APR)

9.95-35.99%

Loan term

2 - 5 years

Loan amount

Up to $35,000

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Avant: Best for all credit types

Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 550

Origination fee: 0.95% to 9.99%

Check processing fee: None

Do they allow a cosigner: No

Late fee: $25

Time to fund: As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)

Reprise Financial

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Rates from (APR)

9.99-35.99%

Loan term

3-5 years

Loan amount

Up to $25,000

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Reprise Financial: Best for bad credit

Reprise may be an excellent option if you need a loan with bad credit. The lender says it will consider applicants with FICO scores as low as 560, and offers secured loans as well as some cosigned loans to help you qualify. Loan funds can be available the next business day once you’re approved. Plus, the company has a 4.7 Trustpilot rating — indicating generally satisfied customers. But Reprise is not for everyone. Available loan amounts are relatively low at $25,000, and the minimum repayment term is relatively high at three years. The lender also charges origination fees, does not offer discounts, does not consider income from self-employment, and is not available nationwide.

Prepayment penalty: None

Unsuccessful payment fee: Return Payment Fees - $20 except where state has a different limit (ie – NM)

Minimum credit score: 560

Origination fee: 0% to 6%

Check processing fee: None

Do they allow a cosigner: No

Late fee: Late Fees - $15 except where the state has a different limit (ie. NM)

Time to fund: If your loan is funded by 3pm CST (not including weekends or holidays) you will receive your funds the next business day.

Upgrade

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Rates from (APR)

9.99-35.99%

Loan term

2 - 7 years

Loan amount

Up to $50,000

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View Details

Upgrade: Best for fair credit

Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.

However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.

Prepayment penalty: None

Unsuccessful payment fee: $10

Minimum credit score: 600

Origination fee: 1.85% to 9.99%

Check processing fee: None

Do they allow a cosigner: No

Late fee: $10

Time to fund: Within a day of clearing necessary verifications

BHG Financial

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Rates from (APR)

10.26-23.48%⁶

Loan term

3 - 10 years

Loan amount

Up to $200,000

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BHG Financial: Best for large personal loans

BHG Financial stands out for offering the largest loan amounts — up to $200,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher. The primary applicant has to meet both income and FICO requirements, the co-applicant only has to meet the income requirements.

Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 3% and 4%, depending on your financial profile. Loan funds are available within five to 14 days of loan approval. Note that you can't prequalify with BHG.

Prepayment penalty: None

Unsuccessful payment fee: $20

Minimum credit score: 660

Origination fee: 3% to 4%

Check processing fee: None

Do they allow a cosigner: Yes

Late fee: Lesser of $40 or 5% of the payment.

Time to fund: Funding in as few as 5 days

Citibank

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Rates from (APR)

11.49-20.49%⁷

Loan term

1 - 5 years

Loan amount

Up to $30,000

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Citibank: Best for no fees

Citi offers no-fee personal loans to borrowers with very good credit (a FICO credit score of 720 or higher). No-fee means no origination fees and no late fees, and Citi is one of very few lenders that don’t charge either. (Origination fees are deducted from the loan upfront, reducing the amount you receive).

Though Citi requires a relatively high credit score to qualify, its minimum income requirement is low. The company also offers a generous 0.50 percentage point autopay discount and makes same day funding available to current Citi customers.

Citi offers relatively small loans, as low as $2,000. But the maximum amount you can borrow is capped at $30,000, which is less than most of its competitors. Another drawback is that the minimum APR is relatively high. Just keep in mind that even with excellent credit, you may not qualify for a lender’s lowest advertised rate, which is one reason it’s good to prequalify with multiple lenders before applying.

Citi personal loans are available nationwide.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 720

Origination fee: None

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: Same day with an existing Citi account, or within 2 business days with a non-Citi account

Universal Credit

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Rates from (APR)

11.69-35.99%

Loan term

3, 5, or 7 years

Loan amount

Up to $50,000

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Universal Credit: Best for debt consolidation loans for bad credit

Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.

Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.

Prepayment penalty: None

Unsuccessful payment fee: $10

Minimum credit score: 560

Origination fee: 5.25% - 9.99%

Check processing fee: None

Do they allow a cosigner: No

Late fee: $10

Time to fund: As soon as 1 business day after acceptance

Zable

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Rates from (APR)

12.95-30.00%

Loan term

1 - 5 years

Loan amount

Up to $35,000

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Zable: Best for short-term loans and same day funding

Zable offers relatively small loan amounts — ranging from $1,000 to $25,000 — that can be deposited in your account as soon as the same day you are approved, if it is by the lender's deadline. It’s an option for fair-credit borrowers, with a minimum credit score of 600, as well as those with lower incomes.

Its origination fees range from 5% to 9%, however, and it does not offer discounts, secured loans, nor the option to add a cosigner to your application. Zable also currently does not offer loans in 21 states.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 600

Origination fee: 5% to 9%

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: As soon as the same business day if approved by 3:30pm Eastern Time

LendingUSA

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Rates from (APR)

13.00-29.99%

Loan term

3, 4, or 5 years

Loan amount

Up to $50,000

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LendingUSA: Best for interest-free merchant financing

Lending USA offers funding for a wide array of products and services, and sometimes offers six-month interest-free promotions on loans made through its merchant partners. Loans made through Credible are available for debt consolidation, credit card refinancing, and home improvement, and are best for borrowers with good credit or fair credit.

Just note that you may be charged an origination fee, and loans aren’t available nationwide. If applying via Credible, you should have a minimum FICO score of 660 to qualify.

Prepayment penalty: None

Unsuccessful payment fee: Yes

Minimum credit score: 660

Origination fee: 5%

Check processing fee: None

Do they allow a cosigner: No

Late fee: Yes

Time to fund: 1-3 business days

Reach Financial

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Rates from (APR)

14.30-35.99%

Loan term

2 - 5 years

Loan amount

Up to $40,000

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Reach Financial: Best for fast funding and fair credit

Reach is an option if you have fair credit, especially if you need money fast. According to the company, 90% of Reach personal loans are funded within one day of approval.

It's a good choice for debt consolidation and credit card refinancing, but borrowers with excellent credit may not find the lowest rates with Reach. The company also charges more fees than some of its competitors and doesn't offer direct pay or autopay discounts. If you need a 7-year term loan, you'll need to look elsewhere. Reach personal loans are not available in all states.

Prepayment penalty: None

Unsuccessful payment fee: $25

Minimum credit score: 640

Origination fee: 4% to 8%

Check processing fee: None

Do they allow a cosigner: No

Late fee: $15

Time to fund: 90% funded within a day

OneMain Financial

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Rates from (APR)

18.00-35.99%

Loan term

2 - 5 years

Loan amount

Up to $20,000

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OneMain Financial: Best for bad credit personal loans

OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score requirement, meaning you could get a personal loan with bad credit or no credit. Cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.

Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given. According to internal Credible data, OneMain had one of the lowest rates of loan approval after prequalification among partner lenders.

Prepayment penalty: None

Unsuccessful payment fee: $10 to $50

Minimum credit score: 540

Origination fee: $25 to $500

Check processing fee: None

Do they allow a cosigner: Yes

Late fee: $5 - $30

Time to fund: As soon as 1 - 2 days after acceptance

Credible’s rating criteria incorporates 700 data points spanning interest rates, fees, loan terms, repayment options, customer service, eligibility, efficiency, options for poor credit and no credit, cosigner options, discounts, and more.

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What are bad-credit loans?

A bad-credit loan is any type of loan that is approved for a borrower who has bad credit. Bad credit, or poor credit, is defined as a FICO score below 580. Many lenders do not offer bad-credit personal loans unless the applicant has a cosigner with good credit, a co-borrower with good credit, or offers collateral to secure the loan, such as a car or the fixtures in your home. If you get approved for a bad-credit loan, expect to pay a relatively high interest rate and fees.

How can I get a personal loan with bad credit?

To get a personal loan with bad credit, you should ideally have a reliable and sufficient income to make loan payments, as well as a low debt-to-income ratio (DTI). Since lenders are hesitant to make bad-credit loans, you may also need collateral for a secured loan or a cosigner with good credit to get approved. Not all lenders allow cosigners or offer secured loans — research those that do before applying. If you don’t need money immediately, you could get a credit-builder loan.

What is a bad credit score?

A bad credit score is a FICO score that’s below 580. With a bad credit score, it can be hard — but not impossible — to get approved for new credit, as there are few lenders that offer bad-credit loans. It’s easier to get approved with a fair credit score, which is a FICO score between 580 and 669. Making timely debt payments and decreasing your credit utilization can help improve your score.

How to qualify for a personal loan with bad credit

Having bad credit can make it difficult to qualify for a personal loan, but not impossible. Try the following tactics:

Apply for a personal loan with a cosigner
Apply with a co-borrower
Apply for a secured loan
Apply for a smaller loan amount
Improve your credit first
Apply for a credit-builder loan
Apply for a payday alternative loan (PAL)

What are the pros and cons of bad-credit loans?

Pros:

Can get much-needed funds
Can pay for emergencies
Easy approval on payday loans and cash advance apps
Quick funding
Some loan types can build credit

Cons:

High fees, and APRs can be in the triple digits, depending on loan type
Approval for bad-credit personal loans can be difficult
Payday loans and cash advance apps won’t build credit
May lead to a cycle of debt

Where can I get a bad-credit loan?

Bad-credit loans are available from some online lenders, very few banks, credit unions, payday loan lenders, and via online cash advance apps. If you have a cosigner with good credit who’s willing to share responsibility for the loan, you’re more likely to be approved. But not all lenders allow cosigners. If you need a small emergency loan, consider a payday alternative loan (PAL) from a credit union — approval is relatively easy and the maximum APR is 28% (much lower than payday loans and most cash advance apps).

How does a bad credit loan affect your credit score?

A bad-credit loan will affect your credit score just like any loan would — it can improve your score if you make timely payments and pay the loan off in full. It can also hurt your score further if you miss payments or default on the loan. What’s worse, if you have a cosigner or a co-borrower on the loan, you could hurt their credit as well.

Note that no-credit check loans, such as payday loans and cash advance apps, rarely report your payments to a credit bureau, which means you generally can’t build your credit with these loans. But if you don’t pay a payday loan, it could be sent to collections and appear as a derogatory mark on your credit report.

What are the alternatives to bad-credit loans?

Bad-credit loans can be a bad idea, especially if you’re considering a payday loan or a cash advance app where APRs can be well over 100%. Alternatives include:

Payday alternative loans (PALs)
Credit-builder loans
Home equity loans
Home equity lines of credit (HELOCs)
Credit cards
Cash-out refinance (home or car)
Cash-value life insurance loan
401(k) loans
Money from friends and family

The best choice will depend on what you can qualify for and what’s available to you. But if you’re having trouble paying bills or making ends meet, consider talking to a credit counselor about options. You should also avoid tapping retirement funds if you think you might file for bankruptcy.

Can I refinance a bad-credit loan?

Yes, you can refinance a bad-credit loan. If you’ve improved your credit score, it’s probably one of the first things you want to look into doing. For example, if you’ve made the jump from bad credit to fair credit (a FICO score above 580), you could reduce the interest rate on a personal loan by 3 percentage points, considering current personal loan interest rates. If you have good credit (a FICO score above 669), you could reduce your rate by 10 percentage points. If you’re paying off one or more payday loans and have a willing cosigner with good credit, it could be worth it to try to consolidate payday loans even with bad credit.