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If you have bad or poor credit as defined by FICO (a score of 350 to 579), you won’t be able to qualify for a personal loan unless you apply with a co-signer. However, while some personal loans require credit scores of at least 670, there are several lenders, like those in this list, that are willing to loan funds to those with credit scores between 580 and 600.
Personal loan interest rates vary depending on your score and the qualification requirements you meet, so you shouldn’t expect to get the lowest rates or the most favorable terms with damaged credit.
But if you have bad credit, you likely shouldn’t be looking for the best rates; the provider that offers a loan your score qualifies for is typically the best one for you. And if there are multiple options open to you, then compare loan limits and interest rates to find the one that best fulfills your needs.
580
5.94% to 35.97%
$1,000 to $35,000
Upgrade was launched in 2017 and provides accessible online and mobile credit and banking services in every state except Iowa, Vermont and West Virginia. Since that time, the platform has made more than $3 billion in credit available to over 10 million applicants and continues to expand its online and mobile services. Although maximum APRs are on the high end compared to other online lenders, Upgrade makes loans available to those with poor credit history.
Loans amounts, which start at just $1,000, are flexible but cap out at $35,000—lower than lenders that focus on lower-risk borrowers. Three- and five-year loan terms are available. Upgrade charges an origination fee between 2.9% and 8% of the loan, and borrowers will encounter a $10 fee if their payment is more than 15 days late or if the payment does not go through; there are no discounts for autopay. That said, Upgrade borrowers are not subject to a prepayment penalty, so you can reduce the overall cost of the loan if you’re able to pay it off early.
Beyond offering accessible personal loans, Upgrade streamlines the lending process with a mobile app that lets borrowers view their balance, make payments and update personal information. Upgrade’s Credit Heath tool also makes it easy to track your credit score over the life of your loan.
Eligibility: Prospective borrowers should have a minimum score of 580 to qualify for an Upgrade personal loan (the average borrower score is 697), making it an accessible option for those with fair credit. Furthermore, the lender does not require applicants to meet a minimum income requirement, although borrowers make $95,000 per year on average. Applicants should have a maximum pre-loan debt-to-income ratio of 45%, excluding their mortgage.
The lender also considers each applicant’s free cash flow, which demonstrates their likely ability to make consistent on-time loan payments. Ideally, applicants should have a minimum monthly cash flow of $800.
Upgrade increases loan accessibility by also allowing co-applicants.
Loan uses: As with most other personal loans, loans from Upgrade must be used to pay off credit cards, consolidate other debt, make home improvements or pay for other large purchases. However, Upgrade stands out from some lenders by allowing borrowers to use personal loan funds to cover business expenses. What’s more, Upgrade will directly pay off third-party lenders, making debt consolidation more convenient than with some competing lenders.
There are no specific prohibitions on the use of Upgrade loans other than those already imposed by law.
Turnaround time: Once an Upgrade loan is approved, it generally takes up to four business days for a borrower to receive the funds. However, if Upgrade is directly paying off a borrower’s loans to a third-party lender, it can take up to two weeks for the funds to clear.
580
9.95% to 35.99%
$2,000 to $35,000
Founded in 2012 and based in Chicago, Avant is a consumer lending platform that offers secured and unsecured personal loans through a third-party bank (WebBank). Unsecured loans are available in Wasington, D.C. and every state but Hawaii, Louisiana, Nevada and South Carolina. The platform specializes in middle-income borrowers with fair to good credit and only requires a minimum score of 580 to qualify.
Maximum loan amounts are low compared to other lenders, but the low minimum amount and flexible repayment terms (two to five years) make it an accessible option for borrowers. However, as with many loans for subprime borrowers, Avant personal loans come with a price. In addition to charging an administrative fee of up to 4.75% of the loan amount, Avant’s APR range (9.95% to 35.99%) is on the high end for applicants with a good to excellent credit score—and there is no autopay discount. Still, the platform earns top marks for borrowers with less than stellar credit who need quick access to funds.
It’s also worth noting that Avant agreed to a $3.85 million settlement with the Federal Trade Commission (FTC) in April 2019. According to FTC documents, the lawsuit was filed in response to allegations that, among other things, Avant charged consumers late fees and interest they didn’t owe and collected payments from customers without permission or in amounts larger than authorized. We reached out to Avant to find out what they’ve done to adjust practices since the settlement but did not receive a response. Even so, Avant has a high 4.7 star rating on Trustpilot.
Eligibility: Avant aims to provide credit services to a range of customers, including those with fair credit. For that reason, Avant has a minimum credit score requirement of 580, with the average borrower score between 600 and 700. Likewise, Avant focuses on low- to middle-income borrowers and has a minimum income requirement of just $20,000, though most borrowers have an average household income of $40,000 to $100,000.
To expand eligibility, Avant also will consider more than just your employment income, including alimony and child support, and may include the income of other people within your household. That said, Avant does not allow co-signers or co-applicants.
Loan uses: As with many other personal loan providers, Avant loans can be used to consolidate debt and pay for things like medical expenses, auto repairs, home improvements moving or vacations and travel. Avant borrowers cannot use personal loan funds to cover business expenses, but the platform does allow current borrowers to refinance their existing Avant loans with another loan—possibly with a lower APR.
Turnaround time: Avant applicants who are approved for an unsecured loan before 4:30 p.m. Central time Monday through Friday may receive their funds the next business day. However, as with other lenders, the funding timeline varies depending on the borrower’s bank. It can also take longer for borrowers who take out secured loans.
600
8.05% to 35.89%
$1,000 to $40,000
LendingClub is a peer-to-peer—or marketplace—lender founded in 2007. As the largest online lending platform for personal loans, LendingClub has worked with over 3 million customers and funded more than $55 billion in loans. It’s also one of the most geographically widespread options, with lending capabilities in every state except Iowa and the U.S. territories.
While LendingClub imposes high APRs and no autopay discount, applicants can choose to borrow as little as $1,000. So you won’t have to borrow—and pay interest on—more than you need. And, though borrowers are limited to $40,000, this is a higher cap than some other lenders. That said, LendingClub’s loan terms are limited to three or five years, which is less flexible than other lenders on our list. Borrowers also are charged an origination fee between 2% and 6% of the total loan amount, which is taken from the loan proceeds at funding.
LendingClub also makes debt consolidation easier by offering a balance transfer loan. With this type of loan, LendingClub offers direct payment to third-party lenders, including over 1,700 creditors. Not only does the platform take care of payments for you, you can choose exactly how much of your new loan amount you want LendingClub to pay toward each creditor.
Eligibility: Applicants must have a minimum credit score of 600 and a minimum credit history of three years to qualify for a LendingClub loan. Furthermore, applicants should have a debt-to-income ratio of less than 40% for single applicants and 35% for joint applicants. These factors, including proof of income, help LendingClub’s platform of investors decide who they want to lend to. Co-applicants are permitted but co-signers are not an option for LendingClub borrowers.
Loan uses: Loans issued through LendingClub can be used for more major expenses, including debt and credit card consolidation, home repairs, medical bills and special events. LendingClub also makes it easy to consolidate debt by offering direct payment to third party creditors. Borrowers are restricted from using funds for postsecondary education, the purchase of investments, gambling and illegal activities.
Turnaround time: LendingClub borrowers typically receive their loan funds as soon as four days after loan approval. However, this timeline may vary if an application is complete or if the lender requires additional documentation or verification.
600
6.76% to 35.99%
$1,000 to $50,000
Upstart has made a mark on the personal loan space because of its artificial intelligence- and machine learning-based approach to borrower qualification. In fact, Upstart estimates that it has been able to approve 27% more borrowers than possible under a traditional lending model. With competitive APRs, Upstart is not a top lender for borrowers who can qualify for more competitive rates. Even so, the platform’s minimum 600 credit score makes it an accessible option to those with fair credit.
Upstart also offers a pretty flexible range of loan options, with amounts ranging from as low as $1,000 so you don’t have to borrow (or pay interest on) more than you really need. And, while Upstart’s loans cap out at $50,000—lower than some lenders—this is likely to be enough for many prospective borrowers.
Even though Upstarts three- and five-year loan terms are more restrictive than other lenders, it’s likely to be an acceptable tradeoff for applicants who might not be approved in a more traditional lending environment. Plus, it’s available in every state except West Virginia and Iowa, so it’s as widely available as many other top lenders.
Eligibility: Upstart stands out because it uses an AI-based platform to consider a range of non-conventional variables when evaluating borrower applications. And, while the platform advertises a minimum credit score of 600, Upstart may even accept applicants who don’t have enough credit history to have a score. When evaluating prospective borrowers, Upstart considers college education, job history, residence, debt-to-income ratio, bankruptcies and delinquencies and number of credit inquiries.
Borrowers also must have a full-time job or offer starting in six months, a regular part-time job or another source of regular income—with a minimum annual income of $12,000. Co-signers and co-applicants are not permitted.
Loan uses: Upstart’s personal loans can be used for credit card and other debt consolidation, special events, moving and relocation, medical and dental costs and home improvements. In contrast to many other traditional and online lenders, Upstart also lets borrowers use personal loan funds to cover educational expenses (except in California, Connecticut, Illinois, Washington and the District of Columbia).
Upstart borrowers cannot use personal loans to finance illegal activity or purchase weapons, firearms or illegal drugs.
Turnaround time: Upstart provides next-business day funding for borrowers whose loans are accepted before 5 p.m. Eastern time Monday through Friday. Loans that are approved after 5 p.m. are typically funded the following business day, or the day after that. That said, Upstart reports that 99% of loan applicants receive their money one business day after accepting their loan terms. Loans for education-related expenses may take up to an additional three business days after loan acceptance.
Consider these tips when comparing personal loans for bad credit:
We reviewed 18 popular lenders based on 14 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose lenders that have a minimum credit score requirement of 600 or lower and ranked them based on the weighting assigned to each category:
Within each category, we also considered several characteristics, including loan amounts, repayment terms, APR ranges and applicable fees. We also looked at whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
Based on the FICO credit score range of 300 to 850, a score below 580 is considered to be a bad credit score. Lenders refer to borrowers who fall in this range as subprime borrowers, and those borrowers tend to be riskier. A bad credit score can make it more difficult to qualify for things like a car, a mortgage or a loan for a business, so it should be in your best interest to improve your score before submitting an application.
Bad credit scores are typically a result of poor payment history, high credit usage and/or too many credit applications or hard credit check inquiries. These are some of the most important factors that make up your credit score. If you want to avoid a bad credit score, it’s best to not neglect these areas of your credit profile.
Some lenders offer bad credit loans for applicants who have had little to no time to build a credit history or who may have experienced some pitfalls. While it can be difficult to get a loan with a credit score below 580, some lenders, including those on this list, are willing to extend funds to applicants with scores between 580 and 600. Minimum credit score requirements tend to vary between lenders, so be sure to check if your score qualifies through your preferred lender.
Bad credit applicants will typically receive high interest rates and lower loan limits due to their credit scores. The lowest rates and most favorable terms are reserved for high-qualified applicants.
Getting a personal loan with a bad credit score is not impossible, but it may require some extra legwork from you. While the process may vary depending on your specific score and lender, here are the general steps you can follow:
When it comes to personal loans, there are two types you can apply for: secured and unsecured loans. However, if you’re having trouble qualifying for a personal loan, consider other loans for bad credit.
Traditional personal loans can either be secured or unsecured. Secured loans require you to provide something of value (also known as collateral), such as your car, savings account or home, to back (or secure) the loan. The lender can repossess the collateral if you fall behind on payments or default. This makes them less risky to a lender, which also means they tend to come with more favorable terms, like lower interest rates, and fewer qualification requirements.
Unsecured loans, on the other hand, are the more common of the two and don’t require any collateral. Because these loans don’t require collateral and therefore pose more risk to lenders, they typically come with more qualification requirements and higher interest rates. The loans on this list are all unsecured personal loans.
If you’re trying to cover higher education expenses, a student loan for bad credit is likely the direction you want to look. Although private student loans typically require good credit, borrowers with bad credit can take out federal student loans, which don’t require a credit check. Federal loans also come with the most flexible repayment terms, including forgiveness if you work in public service or choose certain repayment plans.
An auto loan is a secured loan that uses your car as collateral, which means the lender can repossess your car if you fall behind on payments or default.
Similar to personal loans, auto loan qualification requirements vary for each lender and dealership. While we recommend a minimum credit score of 670 to receive the most favorable terms, you can still qualify for an auto loan with a lower score as long as you meet the debt-to-income (DTI) requirements and bring a larger down payment.
Payday loans are short-term, small-dollar loans (usually up to $500) that you repay once you receive your next paycheck, typically two to four weeks after you take out the loan. Many lenders don’t require a credit check, which is often enticing for people with bad credit. However, don’t get your hopes up. Payday loans come with a ton of their own risks and sky-high fees. Consider other alternatives first, like personal loans or borrowing money from friends and family.
If you have enough equity in your home—your home’s current market value minus your remaining mortgage balance—you may be able to get a home equity loan or home equity line of credit (HELOC). Both let you draw against your home, which means your home secures the transaction and the lender can repossess it if you fail to repay. However, home equity loans are disbursed as lump-sum amounts while HELOCs limit you to withdraw funds on an as-needed basis.
But it’s unlikely borrowers with bad credit scores can qualify for these loans. Most traditional lenders require minimum scores between 600 and 620. There might be a specialty lender or credit union that will make an exception, but it’s not common. People with scores less than 600 would have to go through hard money lenders, such as private investors or companies, not a bank. While hard money lenders are more flexible, they’re typically a more expensive route.
Rank | Company | Score out of 100 possible points | Forbes Advisor Rating |
---|---|---|---|
1 | Upgrade | 71.7 | |
2 | Avant | 69.7 | |
3 | Lending Club | 64.7 | |
4 | Upstart | 63.9 |
There aren’t many lenders that accept applications from borrowers with credit scores of 550. However, there are lenders who allow for a co-signer—someone who agrees to repay the loan if the primary borrower cannot—which can help you qualify for a loan with a score of 550. If you know you have damaged credit, look to improve your credit before applying for a personal loan.
A lender typically determines your loan limit based on your creditworthiness and income. The largest limits are reserved for high-qualified borrowers. If you have bad credit, you can expect to receive near the minimum loan limit your lender offers. If you need to borrow more money, consider improving your credit score prior to applying.
If you know you have bad credit and are preparing to apply for a loan, take time to improve your credit score. Some common ways to do that include paying off your existing debts, reducing your overall credit usage, disputing any errors on your credit report and reducing the number of new credit applications made in a short period of time.
While most loans require a credit check, there are some loans that don’t. Instead, lenders qualify applications based on the applicant’s ability to repay the loan. Lenders will likely also require collateral—a personal asset used to secure a loan and one the lender can repossess if the repayment terms are not met. You can get no-credit-check loans through payday loan stores, auto title lenders, online lenders and pawn shops.
According to our evaluation of 18 popular lenders, Upgrade offers the best personal loans for bad credit. It requires a minimum credit score of 580, giving those with bad credit an opportunity to secure the financing they need. Interest rates range from 7.99% to 35.97%, and with bad credit, you’ll likely land near the maximum interest rate.
Whenever you get a bad credit personal loan, you take on some level of risk. While most personal loans are unsecured, meaning you don’t need to provide collateral to secure the loan (and therefore avoid losing a personal asset if fail to meet the repayment terms), you still risk damaging your credit score if you don’t keep up with your monthly payments.
Jordan Tarver is the assistant editor for loans at Forbes Advisor. Before joining Forbes Advisor, Jordan was an editor and writer for multiple finance sites, focusing on loans, credit cards and bank accounts. His goal is to create actionable content that enables people to make sound personal financial decisions. When he is not working on personal finance content, Jordan is a self-help author and world traveler who helps people experience the world and discover themselves.