Where to look and how to apply for a loan with less-than-perfect credit.
Our top pick: CashUSA
Need a quick cash loan as high as $10,000? This loan connection service could help.
- Min. Loan Amount: $500
- Max. Loan Amount: $10,000
- Loan Term: 90 days to 72 months
- Turnaround Time: As early as 1 business day
- Requirements: Must have a monthly income of $1,000+ after taxes and valid checking account.
What is a bad credit personal loan?
Bad credit personal loans are meant for borrowers who have credit scores less than 580. Because lender see borrowers with lower credit scores as more likely to be delinquent on their loans by making late payments or defaulting, larger banks don’t usually lend to people below this threshold.
Fortunately, other lenders consider more than just a credit score when it comes to borrowing. These may look at your income, current debt and ability to repay before making a final decision on your application. It may mean you pay more than a borrower with good credit, but you’ll still have options when you find yourself in need of a loan.
Compare online loans for with bad credit
What types of poor credit personal loans are there?
You may be able to get a secured or unsecured personal loan from a nontraditional lender, but usually, you’ll have to start rebuilding your credit before you can qualify. While you work on improving your score, consider one of these options when you need a loan.
- Payday loans. Payday loans are short-term loans that you repay in two to four weeks. Lenders don’t require collateral to borrow, but beware: they aren’t available in every state because of high APRs.
- Installment loans. Installment loans require you to make equal payments over a few months. While the APR may be lower than payday loans, it is still much higher than other personal loans.
- Auto title loans. If you own a car or motorcycle, you may qualify for an auto title loan. These have lower APRs but come with extra risk. If you fail to repay your loan, you may have your vehicle repossessed.
- Cash advances. Cash advance loans for bad credit are essentially the same as payday loans. If you have a credit card, you may be able to withdraw a cash advance meet your short-term money needs.
- Credit builder loans. Some banks and credit unions offer loans to help build your credit. You can typically borrow a small amount — sometimes as low as $100 — with relatively low interest rates.
How can I tell if I have bad credit?
Most Americans don’t know exactly what their credit score is, but you don’t have to be one of them. You’re entitled to a free copy of your credit report every twelve months from any of the three main credit bureaus: TransUnion, Equifax and Experian.You can also get an estimate of your credit score from online companies that do a soft credit pull that doesn’t affect your rating. They can only give you an estimate, however. Your actual credit score could be several points higher or lower.
Typically, people with bad credit have struggled paying off debt in the past or simply don’t have a long-enough credit history to get a good credit score. If you’ve missed payments, defaulted on previous loans or declared bankruptcy, it’s likely that you won’t have a good credit score.
Our top 5 picks for bad credit borrowers
Where can I find a loan if I have bad credit?
While you might not be able to walk into a multinational bank to get a poor credit loan, you still have several options to choose from.
Online lenders
You might be able to qualify for an online personal loan with bad credit if other aspects of your personal finances meet a lender’s eligibility criteria. Although you’ll be able to finish your application and receive your funds more quickly, your interest rates and fees may be slightly higher than what you’d get with a bank or credit union.
Be sure you meet your lender’s credit requirements before submitting an application. Look for lenders that allow you to prequalify without affecting your credit score so you don’t suffer a point drop just for applying.
Short-term lenders
Short-term loans include payday loans, installment loans, auto title loans and cash advances. These are meant to take the pressure off during an emergency and generally need to be repaid within a few weeks or months. You’ll typically receive higher interest rates than other lenders, and you may risk of high fees if you’re unable to make your payment on time.
Your local bank
See if there’s a bank in your area that’s classified as a Community Development Finance Institution. These are typically small local banks that aim to help members of underserved communities develop their credit.
They have many of the same options as credit unions — including credit builder loans — but you won’t have to join to become a member. It’ll still take some time, however, to complete an application and get your loan funds deposited into your account.
Credit unions
Credit unions often offer financing to borrowers of all credit types with much lower interest rates than you’d find at other institutions. Many even provide credit builder loans, small short-term loans designed to improve your credit score before you apply for more financing.
Credit unions are typically a better option for those who aren’t in a rush: you’ll have to become a member, and it can take a few weeks to complete the application and receive your loan.
Credit union payday alternative loans
Some federal credit unions offer what they call payday alternative loans (PALs), which are small dollar short-term loans available to borrowers with all credit types. The difference between a PAL and other short-term loans is that PALs are tightly regulated by the National Credit Union Administration.
You won’t pay more than 28% APR on a PAL — in comparison, it’s common for short-term loans to come with APRs well over 300%. But it might not be as fast.
How to apply for a personal loan with bad credit
While it depends on the type of loan you’re looking to borrow, you’ll follow about the same process with each lender and need to supply much of the same information.
First, find a lender that accepts poor credit borrowers. These lenders may still look at your credit score, but they will also consider your income and ability to repay your loan when considering your application.
Depending on your lender, you may be able to complete an application either online or in-store. If you apply in-store, your lender may be able to give you your loan funds that same day. If you apply online, it may take a day or two for your funds to be deposited into your bank account.
You’ll also need to give your lender a bit of basic information about yourself, including
- Your contact information, current address and employer
- Your Social Security number and date of birth
- Your pay stubs, tax returns and bank statements
5 benefits of bad credit personal loans
- No collateral required. Loans for bad credit are typically unsecured, so you don’t have to provide collateral to qualify.
- Quick turnaround. Many personal loans only take a few minutes to apply for, and you could receive a decision the same day.
- Your rates don’t change. Bad credit personal loans usually have fixed interest rates, so you don’t have to worry about your repayments changing over time.
- Very few restrictions. You can use a personal loan for just about anything, including debt consolidation and bill payments. As long as it’s legal and approved by your lender, you won’t be limited to where you spend your loan.
- No prepayment penalties. Some lenders let you repay your loan ahead of time without charging any additional fees, reducing how much you end up paying in interest.
What to avoid when borrowing with bad credit
- Not budgeting out repayments. When you apply, make sure you have a budget in place. If you make a late payment or default on your loan, you could face lowering your credit score further.
- Applying for multiple loans at once. Prospective lenders don’t view this favorably and it could impact your credit score negatively. Instead, try prequalifying with a few lenders to get an idea of what rates you can qualify for.
- Skimming the rates and fees. Many loans for poor credit can be costly, so being aware of the full cost will help you plan for your payments.
How to improve your credit score
While improving your credit score can be a slow process, it will help you find better financing and more favorable rates down the road. You can start working on your score by taking advantage of some of these tips:
- Order a copy of your credit report. To get the most accurate picture of your current financial health, request a free credit report from one of the major bureaus. Take a look at your personal information, employment data, open accounts and balances and any other financial details listed and make sure that all of the information is accurate. If you see any discrepancies, report them to the three credit bureaus and the providers that marked them.
- Pay down your credit card accounts. One of the five variables that determines your credit score is your credit utilization ratio, which is calculated by dividing your balance on existing credit cards by your available credit limits. Most lenders want to see a utilization ratio of 30% or less. This means that if you have a credit card with a $1,000 limit, you only want to keep a balance of $300 or less.
- Don’t take out new loans. Every time you apply for a credit card or personal loan, the lender does a hard credit check, which knocks your credit score down 5 points. To avoid further damage to your credit report, work on paying your outstanding debts instead of borrowing more.
- Don’t close accounts just because you’re not using them. One of the five variables that determines your credit score is your credit history. Lenders want to see a long history of credit in your report, so closing that bank account or credit card could do more harm than good.
Even more ways to improve your credit score
You might also be interested in...
Bottom line
Bad credit isn’t the end of the line when it comes to taking out a personal loan. There are multiple lenders and loan options available to you no matter your score, but be careful. You may face high interest and multiple fees when you borrow, making your loan difficult to afford.
As with every big financial decision, compare your loan options before signing a loan contract.
I have really bad credit and has only been made worse over the last couple days…. I am I desperate need of a loan very quickly… Who will legitimately help me
Hi Theresa,
Thank you for leaving a question.
I understand that bad credit does hinder one in taking out a loan but there are lenders who may be willing to assist you on this. On this page that you are on are a list of lenders who you could inquire about getting a personal loan out. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!
Cheers,
Reggie
Hi, I’ve was laid off work about 6 months ago, have been struggling to find work, but have been receiving unemployment benefits which will be running out in a month. There have been unforeseen emergencies that took place within the past month that have unfortunately left me unable to pay my rent in a few days. My credit is bad (last checked it was 549), and I do not own a car. I’d like to get a loan of at least $1,000 (rent amount) to $1,500 maximum (extra $500 would be for phone and electric bills, public transportation, and basic necessities such as food), but will obviously take anything in-between. I reside in Los Angeles and am getting pretty desperate. Any recommendations? Thank you so much!
Hi Alice,
Thanks for contacting finder, a comparison website and general information service.
I hope everything would turn out well for you. Some lenders require you to be employed, but you may find a lender that will consider you if you are unemployed. If you receive welfare payments, you can still get a loan. Keep in mind there may be restrictions you need to meet, such as your loan repayments not exceeding more than 50% of your welfare income. You may find a list of loan options on this page.
Kindly take time to read this link too so you can find out more information on the lenders which accept applicants with alternate income.
I hope this helps.
Best regards,
Judith
Do you also loan people in Namibia?
Hi Samantha,
Thanks for contacting finder, a comparison website and general information service.
The page which you’re viewing is for US and is not available in Namibia.
Regards,
Judith
Yes I am trying to borrow around $3,000 for moving costs. I can prove income I don’t have a bank account but I have a prepaid credit card. I live in a state that prohibits payday loans. I was unaware that if I applied to a number of different lenders it would look bad on me. I really need this money but I can’t get anybody to help me out. My credit score is in the Fair Credit range. I don’t want to be homeless. Thank you
Hello Andrea,
Thank you for your inquiry.
You can check our personal loans located on this page. At the top of the comparison table, kindly select your state of residence and credit score range as availability varies.
It is worth advising that eligibility and lending terms differ, so it is imperative to understand it fully prior accepting the loan. You may click “Go to Site” green button of your chosen lender to proceed with your application.
Hope this helps.
Cheers,
Jonathan
Hi. My credit score is low but i need a loan of 10,000 . Where can I get a loan with the least amount of wait time? Or what is the most u can get with a low credit score . I’m 21. And don’t have assets I just have a car I don’t want to use for an auto title loan. What are my options to get my hands on some money with bad credit thank u
Hi Candy,
Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.
Actually, you are on the right page as you have the list of lenders that offers loan even if you have a bad/ low credit score. You can also visit this page for other lenders that offers $5000 to $20000 personal loan.
Kindly make sure to review first all the eligibility criteria of the Lenders and so as the loan details before submitting your application. You may click on the green ‘Go to site’ button to be directed to the Lender that will suit your needs.
I hope this helps.
Let us know if there is anything else that we may assist you with.
Cheers,
Ash
Any suggested sites (personal loans, cash advances) that dont require bank account & will allow to use pre-paid debit card?
Hi Sady,
Thank you for your inquiry.
Payday lenders are typically more concerned with your ability to repay the loan than other factors like whether or not you have a bank account. If you can provide proof of income that supports that ability, they’re less likely to be concerned about your lack of a bank account. You may want to consider the options here.
I hope this information has helped.
Cheers,
Harold
I need a loan of $1500 to pay utilities and dental work. I have a pension from Federal Government but credit not good. Where can I obtain a loan. Have been turned down. Need help electric about to be turned off
Hi Carol,
Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.
You may refer to this page for options that may suit your needs. You may review and compare the offers available on the table. Once you have selected one, you may proceed by clicking the green “Go to Site” button.
I hope this helps.
Cheers,
Danielle
I got loans out there I want to pay them all off and I got bad credit is there a lender out there that will lend me money?
Hi Chris,
Thank you for your inquiry.
As per checking you are on the correct page where you can check and review the offers through section “Compare installment loan options”. Additionally, you may find helpful the additional options here.
I hope this information has helped.
Cheers,
Harold
I have fair credit and I need to borrow $2,500. I have a job and I can pay back but due to my credit, no one wants to help me. I am working with a credit counseling service and they are helping. However, I just need this amount to pay everything off so that I can have one bill and save on interest. I have tried loan sharks but I was leary with them. If you know someone that can help me, I would appreciate it.
Hello Marian,
Thank you for your inquiry.
You may consider checking our debt consolidation loans, that is specifically designed for clients who want to pay off their existing obligations and put it into one bill.
Please take note that you need to inform your credit counselling group about your plans to take up another form of credit, so that they can balance it with your existing cash flow and monthly repayments (if you have started paying to them).
To set your expectations, our list of lenders on that page have their own credit guidelines, so it will be recommended to check their individual sites to know their requirements before applying.
Hope this helps.
Cheers,
Jonathan