Obtaining a personal loan with bad credit can feel like a daunting challenge, but many lenders are willing to work with borrowers who have less-than-perfect credit. Personal loans can help consolidate debt, cover emergency expenses, or fund significant purchases. The key is to find lenders offering reasonable terms, transparent fees, and tailored solutions for those with lower credit scores. Here are some of the best personal loans for bad credit in 2024.
Upgrade Personal Loans
Upgrade specializes in offering loans to borrowers with fair to poor credit. It provides loan amounts ranging from $1,000 to $50,000, with APRs starting at 8.24% and going up to 35.97%. One of the standout features of Upgrade is its flexible repayment terms, ranging from 24 to 84 months, and its low minimum credit score requirement of 560. Additionally, Upgrade offers credit-building tools, such as free credit score monitoring and educational resources, to help borrowers improve their financial health.
Avant Personal Loans
If you have bad credit and need a loan quickly, Avant is a solid choice. Avant caters to borrowers with credit scores as low as 550 and offers loans ranging from $2,000 to $35,000. APRs vary between 9.95% and 35.99%. With fast funding—often within one business day—and a straightforward online application process, Avant is a convenient option for emergency financial needs. The repayment terms are flexible, ranging from 12 to 60 months.
Lending Point
LendingPoint is ideal for borrowers with fair credit looking for competitive rates and easy prequalification. It offers loans ranging from $2,000 to $36,500, with APRs between 7.99% and 35.99%. LendingPoint stands out for its low minimum credit score requirement of 580 and its willingness to consider additional factors like income, employment, and financial history when approving loans. Borrowers can also benefit from customizable repayment terms of 24 to 72 months.
One Main Financial
OneMain Financial is a trusted lender for individuals with bad credit who prefer in-person customer service. Loan amounts range from $1,500 to $20,000, and while the APRs (18.00% to 35.99%) are higher than some competitors, OneMain considers borrowers with poor credit scores and does not require a minimum credit score for approval. The company also offers secured loan options for those willing to provide collateral. Funding is typically quick, and its physical branch network allows for a personalized lending experience.
Upstart
Upstart leverages artificial intelligence to evaluate loan applications, which can benefit borrowers with limited credit histories. Loans range from $1,000 to $50,000, with APRs between 6.50% and 35.99%. Upstart’s minimum credit score requirement is 580, but it also considers factors like education, job history, and income, making it an accessible option for those working to rebuild their credit. The application process is quick, with funding available as soon as the next business day.
Key Considerations When Choosing a Personal Loan for Bad Credit
1. Interest Rates and Fees: Borrowers with bad credit often face higher APRs. Compare rates and ensure there are no hidden fees like origination or prepayment penalties.
2. Loan Amounts and Terms: Choose a loan amount and repayment term that align with your financial goals and budget.
3. Approval Requirements: Look for lenders with low credit score thresholds or those that consider additional factors like income and employment.
4. Funding Speed: If you need funds quickly, prioritize lenders that offer same-day or next-day funding.
Tips to Improve Approval Odds
1. Check Your Credit Report: Review your credit report for errors and address discrepancies before applying.
2. Apply for Prequalification: Many lenders offer prequalification with a soft credit check, allowing you to compare rates without affecting your credit score.
3. Consider a Co-Signer: If possible, a co-signer with good credit can help secure better terms.
4. Build Credit Before Applying: Pay down existing debts and make on-time payments to improve your credit score over time.
Finding the right personal loan with bad credit is possible with diligent research and careful planning. Lenders like Upgrade, Avant, LendingPoint, OneMain Financial, and Upstart offer accessible options for borrowers seeking financial assistance. Focus on understanding loan terms, comparing rates, and improving your credit score to secure the best possible deal. With the right loan, you can achieve your financial goals and build a stronger credit profile.