Overview
A personal loan can help you meet a variety of unforeseen and planned expenses, such as car repairs, home renovations, weddings, and even vacations. Even if you have bad credit (usually as a credit score below 580), you may still qualify for loans from lenders with flexible requirements. Just make sure to shop around and explore your options so you can hone in on the ideal loan for your unique budget and needs.
Key Takeaways
Some lenders offer personal loans to borrowers with bad credit.
OneMain Financial, Opportun, Upgrade, Avant, and LendingPoint are several options to consider.
It’s a good idea to prequalify with multiple lenders and check potential offers without any negative impact to your credit score.
What to Consider When Shopping for Personal Loans with Bad Credit
Not all personal loans for bad credit are created equal. That’s why it’s important to keep these factors in mind as you do your research and consider different lenders.
Interest Rates
Though you’ll likely receive a higher-than-average interest rate due to your lower credit score, some lenders offer lower rates than others. A lower rate is a big deal as it can save you thousands of dollars over the life of your loan.
Repayment Terms
Most personal loan lenders offer repayment terms of up to 5 years. However, Upgrade’s loans, for example, may go up to 7 years. Keep in mind that while longer repayment terms will lead to lower monthly payments, they will cost you more in interest.
Fees
Common fees for bad credit personal loans include application fees, origination fees, and late fees. Since fees can eat into your loan funds, be sure to read the fine print and understand whether a lender charges them and how much you can expect to pay.
Funding Times
Fast funding may be a priority, especially if you need the loan funds to pay for an emergency expense like a medical bill or a roof leak. Fortunately, many lenders will distribute your funds within 24 hours or a few business days.
5 Personal Loans for Bad Credit to Explore
- Best for: In Person Service
- MyMoney personalized insights
- In-person service available
One Main Financial
Details:
OneMain Financial offers personal loans that range from $1,500 to $30,000 with terms of 2 to 5 years. You can apply online, by phone, or in person and get a response within minutes. Upon approval and closing, OneMain may distribute your funds as fast as one hour. As a borrower, you can also take advantage of MyMoney, which offers real-time, personalized money insights for free.
Why we like it
We love OneMain Financial for its flexible personal loans, easy application process across multiple channels, and lightning-fast funding in as little as one hour after approval. As a bonus, borrowers also get free access to MyMoney, a tool that delivers real-time, personalized financial insights.
Pros & Cons
Pros:
Free personalized money insights through MyMoney
Can apply in-person at a local branch
Funding within an hour in some cases
Cons:
Origination fees
Minimum loan sizes in some states
Lower maximum loan limits than other lenders
- Best for: Small loans
- Offers secured car title loans
- Set & Save money-saving tool
Opportun
Details:
With Opportun, you can borrow between $300 to $10,000 with repayment terms of 1 to 4.5 years. You may opt for secured loans that require your car title or unsecured loans that don’t. The lender also offers Set & Save, a tool that learns your spending habits and automatically moves funds to your savings account for you.
Why we like it
Oportun makes borrowing simple with loan amounts from $300 to $10,000, terms of up to 4.5 years, and the flexibility to choose between a secured or unsecured loan. What really sets them apart is Set & Save, an innovative tool that studies your spending patterns and automatically moves money into your savings
Pros & Cons
Pros:
Secured loans available with your car title
Accepts cosigners
Set & Save tool helps you save money
Cons:
Administrative fees
Secured loans are only available in some states
Takes up to 3 business days to deposit funds
- Best for: Long repayment terms
- Payment flexibility
- 7-year terms available
Upgrade
Details:
Upgrade’s personal loans range from $1,000 to $50,000 with terms of 2 to 7 years. The online platform lets you choose between unsecured loans and secured loans with your car title. As long as your account is in good standing, you can change your payment date up to 15 days before or after your assigned date. In addition, you may receive your funds within one business day.
Why we like it
We love Upgrade for its wide range of loan options, flexible terms up to 7 years, giving borrowers plenty of room to find the right fit. What stands out is the added flexibility to adjust your payment date by up to 15 days.
Pros & Cons
Pros:
Accepts joint applications
Can change payment due date
Longer repayment terms of up to 7 years
Cons:
Origination fees
No physical branches for in-person service
Loan restrictions in some states
- Best for: Customer service
- 7-day customer service
- Mobile app
Avant
Details:
Avant personal loans are between $2,000 to $35,000 with repayment terms of 2 to 5 years. You can get your funds as little as one business day and manage your account via the Avant mobile app. If you have any questions, the Avant customer service team is available 7-days a week via phone or email.
Why we like it
Avant is great because of their quick access to funds within one business day, and an easy-to-use mobile app for managing your account on the go. What really sets them apart is their dedicated customer service team, available seven days a week by phone or email so borrowers never feel left in the dark.
Pros & Cons
Pros:
Highly-rated mobile app
Approvals often take minutes
Can receive funds within one business day
Cons:
Administrative fees
Not available in all states
Online-only loans
- Best for: Fast approvals
- Potential for lower rates after 6-months of timely payments
- Second loans available
Lending Point
Details:
LendingPoint is a fintech company with personal loans that range from $1,000 to $36,500 and repayment terms of 2 to 6 years. You may get approved within seconds and collect your funds the next business day. After you make 6 months of on-time payments, LendingPoint may decide to lower your rate.
Why we like it
We like this company for its accessible personal loan, near-instant approval decisions, and fast funding as soon as the next business day. What really stands out is their commitment to rewarding responsible borrowers
Pros & Cons
Pros:
Can secure a lower rate after 6-months
No prepayment penalties
Funding as soon as the next business day
Cons:
Origination fees in some states
No joint or cosigned loans
Not available in Nevada or West Virginia
Tips to Help Get Approved
These strategies can increase your chances of getting approved for a personal loan with bad credit.
Apply with a cosigner or co-borrower: Some lenders let you apply for a personal loan with a cosigner or co-borrower who has good credit.
Request a smaller amount: Since smaller loan amounts are less risky for lenders, they’re easier to get approved for, especially if you don’t have the best credit.
Consider secured loans: If you’re struggling to qualify for unsecured personal loans, explore secured options that require collateral, such as your vehicle title or savings account.
Increase your credit score: Depending on your situation and when you need the funds, it might make sense to build or improve your credit through on-time payments and apply for a personal loan once it’s in better shape.
The Point
Even with bad credit, you can lock in a personal loan to cover virtually any expense. Just make sure you do your research and prequalify with at least three lenders. This way you can zero in on the ideal option for your unique budget and situation.
If you don’t need the funds right away, consider delaying your application and focus on improving your score. By doing so, you’ll open the doors to more options and potentially secure better rates and terms.
by your friends at The Daily Navigator
