If you need money immediately then you can always go for a personal loan. Where it takes days to get approval on a car loan or student loan, personal loans are approved easily and the interest rate is also low. But it can become difficult for you to get a personal loan if you have a bad credit score. But worry not, in this write-up, we are going to tell you about the best personal loans for bad credit options. In the end, we will also cover the most asked questions related to personal loans. So let’s get started.
What are Personal Loans for Bad Credit?
A personal loan for bad credit is a personal loan for people who have a below-average credit score. The lenders usually give money to people where the risk is very low and they are sure that they will get their money back. But if you have a bad credit score, then the spectrum of lenders definitely narrows down for you.
Don’t worry, there are still some lenders who give personal loans to people with bad credit scores. Though you might have to pay higher interest because of your bad credit history. You might also get a smaller loan than you want.
There are many types of personal loans, like secured loans, unsecured loans, joint personal loans, and co-signed personal loans. You can go with any of these personal loans as per your need.
Best Personal Loans for Bad Credit
In this section, we are going to introduce some of the best options where you can get personal loans with bad credit. Now let’s have a look at them.
Our Rating: 4.3/5
Avant is one of the best options for personal loans with bad credit. It gives you an unsecured loan of between $2,000 to $35,000, depending on your credit score and your need. You can repay their loan in installments within 12 to 60 months, whatever they decide. You can also save up on the interest by repaying the loan amount early.
- No extra fee for prepayment.
- You can save up on interest by repaying the loan early.
- You can even get this loan with bad credit.
Our Rating: 4.5/5
Upstart provides unsecured loans of $1,000 to $50,000. Here in Upstart loan, you get to choose your repayment time between 1 to 5 years and the interest rate will depend on the loan term, amount, and your credit score. Not just this, but you also get a 15 days grace period if you do not pay your loan on time. There is no late fee on paying the loan amount in the grace period.
- There is no minimum credit score.
- Direct payment to the creditor.
- Fast funding.
Our Rating: 4.3/5
If you are not getting any personal loan bad credit options because of a bad credit score then LendingClub is the ray of hope that you need. They provide co-borrower loans to people with bad credit histories. You can get a loan of up to $40,000 and there is no minimum annual income to qualify for a loan from LendingClub.
- They offer co-borrower loans.
- The low minimum amount for borrowing.
- They also offer a 15 days grace period in case you fail to pay any installment.
Our Rating: 4.3/5
Do you know what’s the best thing about LendingPoint? It operates in 48 states. So most probably you can apply for a personal loan with bad credit at LendingPoint. They have a minimum loan amount of $2000. So even if you have a bad credit score, you can get a personal loan of at least $2000.
- Provides loan services in 48 states.
- The minimum borrowing amount is $2,000.
- Easy application and approval process.
5. Possible Finance
Our Rating: 3.5/5
If you need just a small amount of money as a personal loans bad credit and you are looking for a payday loan then Possible Finance can actually give you personal loans for bad credit. They provide you with a loan from $50 – $500 and you need to repay that loan within a period of 8 weeks to 12 weeks.
- Provide small loans.
- You can get a loan even with a bad credit score.
- No minimum credit is needed.
6. OneMain Financial
Our Rating: 3.7/5
OneMain Financial is among the few loan providers that provide both secured and unsecured bad credit personal loans. You can use the OneMain Financial loan to buy a car or renovate your house. They do not ask you where you are using the loan amount. They have 4 different loan terms for repaying the loan depending upon your loan amount. These loan terms are 24 months, 36 months, 46 months, and 60 months.
- Provide both secured and unsecured loans.
- Several branch offices, so they also provide offline loan services.
- Many loan term options are available.
Our Rating: 4.0/5
LightStream has several user-friendly features that make it stand out from other money-lending services. It provides you bad credit personal loans of up to $100,000 and you can repay the loan within 2 to 12 years. The LightStream loans generally deposit the loan amount within 1 to 30 days after loan approval, depending upon the loan amount.
- High maximum loan amount.
- Zero fees.
- Long repayment time for big loans.
Our Rating: 4.1/5
Prosper is one of the well-known names for personal loans with bad credit. They provide a loan of up to $50,000. If you have a bad credit score then you can also apply for a joint loan. The company claims that they deposit the loan fund into your bank account within 3 days. They charge an origination fee between 1% to 5%.
- Easy application.
- Easy loan approval.
- You get the option to change your payment date.
Our Rating: 4.7/5
If you have a really bad credit score and you want a personal loan then you can try getting a personal loan with bad credit from Upgrade. They usually provide to people with bad credit, though the interest can be a little high. The Upgrade Loans provide a loan of up to $50,000 and the repayment period can be up to 7 years, depending upon your loan amount.
- You can get a joint loan at Upgrade.
- Provides a high loan amount.
- Easy loan approval.
- Also, provides small personal loans for bad credit of a minimum of $1000.
10. TD Bank
Our Rating: 4.8/5
TD Bank provides unsecured loans of up to $50,000. The good part is, where the fee of other lending services is extremely high, TD Bank has a low origination fee and late fee. Mostly the loan amount is added to your bank account within one or two business days.
- You can qualify for their loan with a soft credit check.
- You can also change the payment date.
- Maximum loan amount of $50,000.
How to Get a Personal Loan With Bad Credit?
In this section, we are going to tell you about a step-by-step process that can help you get a personal loan with bad credit.
1. Calculate Your Budget
First of all, you need to find your debt-to-income ratio. For this, you will have to find out how much money you can pay in monthly installments with the current monthly salary that you have without having a very harsh effect on your lifestyle. Also, consider it twice if your children or family members are financially dependent on you.
2. Check Your Credit Score and Dispute Credit Report Errors
Take out your credit report and see your credit score. If you think that your credit score is low due to an error by your credit card company or some entry is missing then dispute credit report errors to your credit card company.
3. Find Out Potential Lenders
Now that you know your credit score, check for the lenders that can provide you with a loan on your credit score. Make a list of all the potential lenders along with their interest rates and other fees.
4. Compare Interest Rates and Other Terms
Now that you are well aware of the interest rates and other fees of all the potential lenders, compare them. See which one has a lower interest. Just do not fall for the low interest, check other terms and fees as well.
5. Pre-Qualify for the Loan
Most lenders provide this facility on their official website. So under this, you can check if you can qualify for their loan or not by just simply entering your credit score and some other details like your income.
6. See if You Can Add Any Applicant
If you do not pre-qualify for a loan then try if you can add an applicant for that loan or not. Most companies provide joint loans and co-sign loans for people with bad credit. See if the lender you are considering provides this service or not.
7. Send Your Application
After following all the steps given above, you must have come to a conclusion. Now that you have decided which lender you want to go with, see their application process. You will have to submit the documents like your identity card, credit report, income proof, etc, and then you can apply for the loan.
If your loan application is approved then after clearing all your doubts with the lender, you can sign up for the loan. You will receive the loan amount between one to ten business days, depending upon your loan amount.
How to Choose the Best Personal Loans With Bad Credit?
In order to get legit personal loans for bad credit, check the following things before making the final decision.
1. Lender’s Reputation
It is very important to check the market reputation of the lender. Because these days, there are several fraud lenders that promise to give the loan at low interest and once you finalize the deal, they run away with your security deposit, without actually giving you the loan amount. You can also check the ratings and reviews of the lenders online to be more sure about this.
2. Interest Rate
You must compare the interest rate of all the different lenders. Do not directly go for the low-interest loan. Make your debt-to-income ratio and then analyze whether the loan is good for you or not.
3. Terms and Conditions
Check the terms and conditions of the lender properly, because many times the lenders agree to give a loan at a low interest but have several other hidden charges, which you get to know after getting the loan amount.
How to Increase Your Credit Score to Get Better Rates?
If you follow the tips given below, you can increase your credit score and crack better deals.
1. Pay the Bills on Time
30% of your credit score is affected by your bill payment. Make sure that you pay the bills on time in order to maintain your credit score. If you forget to pay the bills on time you can also go for an automatic transaction service which is now provided by most banks.
2. Keep a Check on Your Utilization Limit
Make sure that you leave some balance on your credit card so that your credit score can increase. If you use your credit limit completely or exceed the credit limit then it will affect your credit score negatively.
3. Become an Authorized User
When you become an authorized user on someone else’s credit card, as their credit score increase, you will also get some benefits. But you have to be cautious with this because if you are an authorized user on someone’s credit card who does not maintain his credit card then your credit score will decrease.
4. Keep Your Old Account Active
Make sure that you keep your old account active. Old accounts are considered to be more trustworthy. If you have an old active account then you can easily get a personal loan even with a bad credit score.
Frequently Asked Questions
Q1. Where can I get a personal loan with bad credit?
You can easily get personal loans for bad credit from lenders like Avant, Lending Club, Lending Point, Avant, Prosper, TD Bank, Upgrade, Upstart, etc.
Q2. How to qualify for a personal loan with bad credit?
If you want to qualify for a personal loan with bad credit then you can go on the lender’s official website and read all the important points. There you will find a pre-qualification form where you will have to enter your credit score, as well as some other details like annual income, and you will get to know your chances of getting the loan from that particular lender.
Q3. How would I get approved for an unsecured personal loan with bad credit?
Most lenders do not provide unsecured personal loans to people with bad credit scores. But you can still find some lenders like Upgrade and LendingClub that can provide you with a joint personal loan, co-borrower loan, or co-sign loan in case of a bad credit score.
Q4. How much can I get a personal loan for with bad credit?
If you have a really bad credit score then you can get a personal loan of somewhat between $1,000 to $5,000. If you want a bigger loan then you will have to pay high interest. You can also get a co-signer or co-borrower to get a better deal with a lower interest rate.
Before applying for a loan, make sure to know your debt-to-income ratio. Because the loan would be of no use if you would have to pay all your monthly income in the loan installment. To get the best personal loans for bad credit, you can go with lenders like Prosper, LendingClub, Upstart, Avant, etc.
Also, just do not fall for the low-interest rate, because these days, there are several lenders that provide low-interest secured personal loans and then disappear with your security deposit.
You can also consider banks for a personal loan because the paperwork and whole process can be a little hectic, but you will get the loan on low interest and there are no chances of fraud.