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The coronavirus pandemic has had an unprecedented impact on Americans’ finances. If you lost your job and are considering taking out a personal loan to cover bills, you might have a difficult time qualifying. Read our financial guide to COVID-19 to explore other options available to you.
Your options are limited if you have bad credit and need a personal loan. Most lenders require good to excellent credit to qualify at all — let alone get a good rate. But there are a few lenders out there that accept low-credit borrowers and can help you get your credit back on track.
Our team reviewed over 100 personal loan providers to come up with a list that best suits the needs of a borrower with bad credit. We only included lenders with a credit requirement of 580 or lower and considered factors like APR, loan amounts and terms available. We also took into account benefits that might appeal to bad-credit borrowers and lenders that offer funding based on factors other than credit.
There have been quite a few changes to our list for 2020. We split our page into two sections — direct lenders and connection services — so you can choose the option that helps you find the best rates.
We also removed a few lenders from our list and added Lendvious because of its good customer reviews. And our connection services were placed into new categories to better feature what they’re best for — and why you may want to use them.
OneMain is a direct lender that specializes in personal loans for borrowers with less-than-perfect credit, offering the opportunity to back your loan to get lower rates.
While you can get started online, you have to complete your application at a branch. This might take more time, but it gives you the chance to get real-time answers to your questions and find the best terms for your budget. If you change your mind after seven days, you can also return your loan at no cost.
Disclaimer Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Maximum annual percentage rate (APR) is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $300. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes.
Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600.
Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: Florida: $8,000. Iowa: $8,500. Maine: $7,000. Mississippi: $7,500. North Carolina: $7,500. New York: $20,000. Texas: $8,000. West Virginia: $14,000. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.
Stilt is one of the only personal loan providers that specializes in loans for nonresidents who haven't had time to build their credit, though permanent residents and citizens can also apply.
Instead of looking at your credit score, Stilt considers other aspects of your personal finances, such as your spending habits, education and work experience. But it's only available in 11 states and is a relatively new company with a limited track record.
Regional Finance is one of the few personal loan providers that doesn't require a bank account and works with bad credit. Rather than transferring your loan to your bank account, Regional Finance gives you your funds in the form of a check.
However, it only offers small-dollar loans with short terms to residents of 11 states. You'll also need to secure your loan with some sort of personal property. And it's not transparent about costs.
Loans as low as $600
Doesn't require bank account
Accepts coapplicants
No loans over $10,000
Collateral required
Only disburses loans by check
Loan Amount
$600 – $10,000
APR
Varies
Interest Rate Type
Fixed
Min. Credit Score
550
Min term
9 months
Max term
24 months
Top 3 connection services for bad credit
Want to compare rates first? Then you might want to start with a connection service before applying with a direct lender.
Lendvious is one of the few connection services out there with reviews — and the vast majority are positive. And while you may need to provide more information than other connection services, it will help you find a lender that best matches your finances. Best of all, its network of lenders accept cosigners. So even if you have bad credit, you may be able to score a lower rate if you have a friend or family member willing to help.
If you're on the hunt for a long loan term, LoanStart may be able to help. Its lenders offer terms up to seven years and accept borrowers with bad credit. You'll still need to meet some credit requirements, however. Recent bankruptcies, late payments and overdue accounts may impact your ability to qualify with one of LoanStart's partner lenders. And with bad credit, you won't be eligible for the low starting APR of 4.84%
Monevo is a loan connection service that can help you compare offers from over 30 lenders by filling out a quick online form. Its network of lenders offer one of the widest range of loan amounts and lowest rates for borrowers with a credit score of 500.
While you likely won't get anything near the starting APR with bad credit, it could help you find one of the more competitive deals out there for bad credit.
Terms up to 12 years
No minimum credit requirement
Loans as low as $500
Potentially long turnaround with some partners
Terms as short as 3 months
Loan Amount
$500 – $100,000
APR
3.49% to 35.99%
Interest Rate Type
Fixed
Min term
3 months
Max term
144 months
Turnaround Time
Varies by lender
Summary of best personal loans for bad credit
Lender
APR
Best for …
What sets it apart
OneMain Financial
18% to 35.99%
Secured loans with a personal touch
No credit score minimum and the option to back your loan with collateral for a lower rate.
Stilt
Starting at 7.99%
Nonresidents
A program that looks at factors like spending habits instead of credit history.
Regional Finance
Varies
Borrowers without a bank account
No bank account required — even with bad credit.
Lendvious
Starting at 5.99%
Customer satisfaction
Overwhelmingly positive customer reviews and the option to apply with a cosigner.
LoanStart.com
Starting at 4.84%
Long loan terms
Partners that offer terms as long as seven years.
Monevo
3.49% to 35.99%
Credit scores under 500
No credit score minimum and a sizable network of 30 partner lenders.
How to choose the best personal loan
Not sure which lender to go with? Here are a few pointers to help narrow down your choices:
Make sure you meet eligibility requirements. Before applying, check that you meet the lender’s minimum requirements for credit score and income. And double-check that you live in an eligible state.
Check that the lender offers the loan amount you need. If a lender’s funding range is too low or too high for your needs, look somewhere else.
Compare costs to find the most affordable option. If possible, fill out prequalification forms to find out what rates you might get, since you likely won’t get the lowest advertised rate with bad credit. Use our calculator to compare the monthly cost of different offers to find the most competitive deal.
Ask how fast you’ll get your money. Look at the lender’s turnaround time to make sure you have a chance of getting your money when you need it.
Read customer reviews. A great way to look out for red flags and gauge your customer service experience is to read reviews from former borrowers. Just take them with a grain of salt — people tend to only write reviews in extreme situations.
Can I get a personal loan with a credit score of 550?
It’s possible to get a personal loan with a credit score of 550 or lower, but you’ll likely end up with the maximum rate the lender offers — usually around 35.99% — if you qualify at all. Applying with a cosigner can not only boost your chances of approval, but it can also help you score a better rate.
If you’re using a connection service, watch that you’re not connected to an installment loan provider instead of a personal loan provider. These can come with rates in the triple digits and shorter loan terms. If that’s all you can qualify for, you might want to consider improving your score before going down that road.
Follow these steps to up your chances of qualifying for a personal loan with a low credit score:
Check your credit report. Request a free copy of your credit report from one of the three main credit bureaus and look for any errors. Contact your creditor if you notice any mistakes.
Rebuild your credit. If you aren’t pressed for time, rebuild your credit before applying. This might include taking out a credit-builder loan or signing up to have your rent and utility payments added to your credit report.
Shop around. If you can’t wait to rebuild your credit, take the time to prequalify with a few lenders to find the best offer available to you.
Apply with a coapplicant. Adding a family member to your application who has good credit and a high income can significantly increase your chances of approval.
Opt for a secured loan. Lenders may be more willing to offer you a personal loan — and at lower rates — if you back it with collateral.
Watch out for scams. Check consumer review sites like Better Business Bureau and Trustpilot to verify the lender is legit. Also read over your loan agreement carefully so you know all the costs before you sign.
If you have bad credit, you might want to consider options besides personal loans, since many personal loan providers are off the table. These include:
Pay advance apps. Hourly workers can get an advance on the salary they’ve already earned through apps like Earnin — typically up to $500 per pay period for a tip or monthly fee.
Paycheck advance. Some employers offer advances on your paycheck as a company benefit, typically without a credit check and at the same cost for everyone.
Installment loans. These loans usually run from $1,000 to $10,000 with no credit requirements — but rates can reach the triple digits.
Payday loans. You can typically borrow up to $500 for a fee of around $10 to $15 per $100 borrowed, which you repay when your next pay check comes in. No-credit-check and no-bank-account options might be available, though payday loans are illegal in some states. These are best saved as a last resort, since the high costs leave many borrowers stuck in a cycle of debt.
How much will my loan cost me?
How much your loan costs depends on your loan amount, rates and terms. Bad-credit borrowers typically qualify for higher rates than other types of borrowers — and you might not be eligible for the highest loan amounts, depending on the lender.
Use the calculator below to find out how much you’ll have to pay each month and in total:
How to improve your credit score
Got some time? Consider taking steps to improve your credit score before you apply to qualify for lower rates, higher amounts and an all-around better deal:
Check your credit report. Check for mistakes that could be negatively affecting your credit, and contact the creditor if you see anything off.
Stay on top of your bills. The most important factor in your credit score is your history of on-time repayments. Reach out to your lender if you think you might be late to see if they can adjust your term.
Pay off debts. Having a high debt load can decrease your credit score and also makes it harder to qualify for a loan when you apply. Focus on higher-interest debts to save the most on interest.
Keep your credit cards open. After you pay off your credit card debt, keep those cards open. The more access to unused credit you have, the lower your credit utilization ratio — which also plays into your credit score.
Consider a credit-builder loan. These low-cost small-dollar loans are designed to add a history of positive repayments to your credit report — often while helping you build an emergency fund.
Bottom line
If you have bad credit, you might only be eligible to apply with a handful of personal loan providers. But you aren’t totally out of options. Connection services can be particularly useful because they allow you to compare rates and terms you might qualify for with multiple lenders at once.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 950 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
