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Best Personal Loans for Bad Credit

February 2024

If you have bad credit, it can be hard to find an affordable loan. But it's not impossible. Here is SuperMoney's list of the best personal loans for bad credit.
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When you have bad credit, it's hard to get approved for credit cards or loans. Even if you do get approved, the offers you receive will charge higher interest than you'd get if you had fair or good credit. But to improve your credit, you'll need to use credit. If you simply abstain from taking out loans or paying with credit, your credit score is unlikely to improve. Fortunately, even if you have bad credit, you still have options.
Some lenders accept borrowers with bad credit and consider other factors (such as your income and employment history) in addition to your credit score. Of course, these loans will be more expensive than those available for applicants with good or excellent credit.
This is SuperMoney's list of the top personal loans for bad credit.

Methodology

SuperMoney's list of the best-rated personal loans for poor credit is dynamically generated based on advanced algorithms and community feedback. When searching for the most recommended personal loans for bad credit, consider lenders that offer excellent customer service, intuitive client portals, and flexible payment options. It's also a good idea to prioritize lenders that allow borrowers to check their rates and terms before running a hard credit inquiry.

Frequently Asked Questions

What is considered bad credit score?

A bad credit score typically includes FICO scores ranging from 300 to 579. About 16% of Americans have bad credit.
Before you start submitting applications, you should get a clear sense of your credit situation. If you haven't done so yet, pull your free credit score. This will tell you where you fall on the credit spectrum.
Note that there's a difference between bad credit and no credit. After all, if you’ve never had credit, you’ve never made score-devastating mistakes. There are lenders who are willing to fund personal loans to young adults who are still establishing credit.
Credit scoreRangePercentage of people within this range
Excellent800-85021%
Very good740-79925%
Good670-73921%
Fair580-66917%
Very bad300-57916%
Bad credit is typically a result of a short credit history or a series of financial missteps, such as missed payments or collections accounts.

How can I get a personal loan with low credit?

If you have bad credit it is usually easier to qualify for a loan secured by a valuable asset, such as a car or a home. However, bad credit personal loans can also be an option for people with very poor credit, although the interest rates and fees will be high. In such cases, lenders will typically look more closely at your income and expenses. They may want to interview you in person. If you have bad credit, you'll need to use other examples of responsible payment behavior to prove that you can meet your commitments. Provide the loan officer with proof that you've paid off other assets on time, like a mortgage or an auto loan. Or if you've never missed a rent payment, show them evidence of that.
Also, if you've lived in the same home for a long time and have a steady job, you have a better chance of being approved for a loan.
If all else fails, you can always take measures to improve your credit before re-applying.

Can you get a personal loan with a credit score of 550?

Yes, but it wont be easy and you will probably have to pay very high interest rates. Most lenders won't even consider an applicant with a credit score under 600, so qualifying with a credit score of 550 is going to be a challenge. However, there are lenders who are willing to loan money to applicants with FICO scores of 550 or under. Try the lenders on the list above to get started.

How else can I get cash fast if I have bad credit?

It's tough to find personal loans for poor credit. Here are some alternatives, if you're unable to get approved by the lenders in the list above:
  • Do you have a relative or trusted friend with good credit? Find a lender that allows cosigners and ask your friend to co-sign the loan.
  • If you own your home, you can borrow against the equity in your home with a home equity loan or a HELOC. Since these are secured by the equity in your home, they're easier to qualify for, and the interest rates are lower. But be aware of the risk. If you fail to make your payments on time, you could lose your home.
  • Your local credit union may be your best option for an unsecured personal loan. All federal credit unions have a maximum APR of 28% on loans. Plus, if you're already a member of a credit union, they may be more likely to approve your application.
  • If you have valuable assets to use as collateral, a secured loan can offer you affordable interest rates.
  • As a last resort, you can look for a payday loan. Payday lenders rarely run a credit check, but these loans usually feature high interest rates and short loan terms and have a famously high rollover rate. You should only take out a payday loan if it's a real emergency and you have no other options.

What will I need when applying for a loan with subprime credit?

Lenders who consider applicants with bad credit often look at other factors, like income and employment status, more heavily than your credit score. As such, they'll need additional documentation. These documents may include:
  • Tax returns from at least the last two years
  • Pay stubs
  • List of unsecured debts such as credit card and medical bills
  • List of assets and how far you are in paying them off
  • Alimony or child support payments
  • Bank statements
  • Bankruptcy or other legal judgments against you
Not all lenders will require all these documents, but if you have bad credit it's a good idea to collect any documentation that shows you manage your money responsibly.

How can I improve my bad credit score so I can qualify for a better loan?

There are no quick fixes when it comes to credit scores. It can take months or even years to build a good credit score. However, there are things you can do today to improve your credit.
  • Pay all your bills on time (even if you only make minimum payments).
  • Use credit-boosting programs, such as Experian Boost and UltraFICO, to get credit for paying your utility and cell phone payments on time.
  • Reduce the balance on your credit cards. Yes, this is a challenge if you're lookding for a loan, but having a low credit utilization ratio is a great way to improve your score.
  • Apply for one or two secured credit card if you currently don't have any credit accounts.
  • Don't close unused credit cards unless they have expensive fees. Having fewer accounts could lower your credit scores.
  • Don't open too many credit cards or loan accounts at the same time.
  • Check your credit report and fixe any errors on your credit report.

Is it a good idea to get a personal loan if you have bad credit?

Remember, you shouldn't use a personal loan as a way to extend your debt problems. Using a personal loan to consolidate your debts can be a smart financial move. But if you're simply taking out one loan to pay off another, it will only delay your problems.
That said, if you're in need of fast cash for an urgent expense, or you'd like to improve your credit through responsible payment behavior, a personal loan can be a good option.
If you decide to get a personal loan, make sure you compare multiple lenders so you get the best personal loan possible for your credit score. The list of top-rated personal loans for poor credit included above is an excellent place to start. However, you can also compare personal loans for all credit types..
and read our guide on how safe are personal loans with no credit check

About the Author


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SuperMoney is the most comprehensive financial services comparison site around. We have published hundreds of personal finance articles and provide detailed reviews on thousands of financial products and services. Our unbiased advice and free comparison tools help consumers make smart financial decisions based on hard data, not marketing gimmicks.

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