You usually need good credit to get a personal loan. There's no uniform number but most lenders prefer to see a 620 FICO Score to approve a loan and a 670 to offer better rates and terms.
But if your credit isn't great, there are lenders who can help. CNBC Select has named the top personal loans for bad credit, considering interest rates, repayment options, fees and more.
Read more about our methodology to see how we made our selections.
Best personal loans for bad credit
Best for flexible terms: OneMain Financial
Who's this for? OneMain Financial approves loans with terms of 24, 36, 48 and 60 months. More importantly, it doesn't require a minimum credit score and doesn't rely solely on your score to determine loan terms. It considers income, expenses, and, if applicable, collateral.
Standout benefits: Applicants can prequalify and OneMain offers the option of using collateral to receive better loan terms. There is also no early payoff penalty.
Approves applicants with bad or fair credit and offers secured loans.
- Approves applicants with bad or fair credit
- Relatively low $1,500 loan minimum
- Same-day funding available
- Option to apply with collateral for a lower rate
- Co-applicants allowed
- High origination fee
- High interest rates
- No autopay discount
- No co-signers
*You must complete a loan application and continue to meet any criteria used to select you for a loan offer. Not all applicants are approved. Loan approval and actual loan terms depend on applicant's state of residence and ability to meet OneMain Financial credit standards such as a responsible credit history, sufficient income after monthly expenses, and if applicable, availability of eligible collateral.
Not all approved applicants qualify for larger loan amounts, lower APRs, or the most favorable loan terms. For example, larger loan amounts typically require a first lien on a motor vehicle that is no more than ten years old, meets our value requirements, and is titled in applicant's name with valid insurance. APRs are generally higher on loans not secured by a vehicle.
Example Loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.
OneMain charges origination fees allowed by law. Depending on the state where the loan is opened, the origination fee may be either a flat amount or a percentage of the loan amount. Flat fees vary by state, ranging from $25 to $500. Percentage-based fees vary by state, ranging from 1% to 10% of the loan amount subject to certain state limits on the fee amount.
For information about these fees and minimum and maximum loan sizes available in certain states, visit omf.com/loanfees.
Current OneMain Customers: Loan offers presented to a consumer assume the individual has no active loan with OneMain or one of its affiliates. If a customer applies for a new loan offer, a OneMain representative will discuss available options.
Active-duty military, their spouse or dependents covered by the Military Lending Act (MLA) may not pledge any vehicle as collateral. If you are covered by the MLA, you are not eligible for secured loans.Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB's Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase cryptocurrency assets, securities, derivatives or other speculative investments; or for gambling or illegal purposes.
Time to Fund Loans: Funding within one hour after loan closing through SpeedFunds® must be disbursed to a bank-issued debit card. Disbursement by check or ACH may take up to 1-2 business days after closing.
Best for quick funding
Who's this for? If you're approved by 5:30 p.m. ET, Monday through Friday, Avant cam fund your loan as fast as the next business day
Standout benefits: Avant specializes in lending to customers with credit scores as low as 550–580. There is no prepayment penalty.
Lends to applicants with poor credit and offers next-day funding.
- Lends to applicants with poor credit
- No early payoff fee
- Can prequalify with a soft credit check
- Funding often available next day
- Late-payment grace period of 10 days
- Origination fee
- Potentially high interest
- No autopay discount
- No direct payments to creditors for debt consolidation
- No co-signers
Best for fast approval: LendingPoint
Who's this for? Working with borrowers with FICO scores as low as 580, LendingPoint can share its approval decision within seconds.
Standout benefits: LendingPoint's proprietary underwriting process looks at income, employment history, and other factors to determine approval and terms. After six months of on-time payments, you may be eligible for a rate review and a better rate.
LendingPoint Personal Loans
Annual percentage rate (APR)
7.99% to 35.99%
Loan amounts
$1,000 to $36,500
Terms
24 to 72 months
Credit needed
Poor/fair
Origination fee
Up to 10% , depending on the state
Early payoff penalty
No
Late fee
LendingPoint does not currently assess a late fee but reserves the right to charge one of up to $30, depending on the state.
Terms apply.
Pros
- Next-day funding available
- Approves applicants with 620 credit score
- No early payoff fee
Cons
- Origination fee of up to 10%
- No joint loans or co-signers
- Not available in Nevada or West Virginia
Who's eligible to apply for a LendingPoint loan:
- You must be at least 18 years of age.
- You must be able to provide a U.S. federal, state or local government issued photo ID.
- You must have a social security number.
- You must have a minimum annual income of $40,000 (from employment, retirement or some other source).
- You must have a verifiable personal bank account in your name.
- You must live in one of the states where LendingPoint does business (excludes Nevada and West Virginia).
Best for borrowers with no credit history: Upstart
Who's this for? Upstart is known for approving loans for applicants with a 300 FICO Score, the lowest possible. But it also works with customers with insufficient or no credit, by considering education, employment, credit history and other considerations.
Standout benefits: Borrowers can use their vehicle as collateral to secure their loan. Loan amounts range from $1,000 to $75,000, one of the broader ranges we've seen.
Upstart offers accessible personal loans for people with fair or average credit.
- Accept applicants with low or no credit
- No early payoff fees
- Most loans funded the next business day
- High late fees
- Origination fee of 0% to 10% of the target amount
- $10 fee for paper copies of loan agreement
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
6.20% - 35.99%
$1,000 to $75,000
9.95% to 35.99%
$2,000 to $35,000
What's considered a bad credit score?
Here's how lenders classify "fair" and "poor" credit scores:
FICO Score
- Very poor: 300 to 579
- Fair: 580 to 669
- Good: 670 to 739
- Very good: 740 to 799
- Excellent: 800 to 850
VantageScore
- Very poor: 300 to 499
- Poor: 500 to 600
- Fair: 601 to 660
- Good: 661 to 780
- Excellent: 781 to 850
Good credit starts at 670 with FICO Score and 661 with VantageScore. Anything over a 740 FICO Score is considered very good and a score above an 800 is considered excellent.
While you'll need a score in the range of 670 to qualify for the best rates, there are lenders who focus on borrowers with credit scores in the high 500s and low 600s.
How to qualify for a loan with bad credit
Getting approved for a personal loan if you have bad credit may be difficult, but you can take steps to improve your chances of approval:
- Check your credit score: Knowing your score can help you weed out lenders whose requirements you aren't likely to meet. Plus, it might uncover errors or even fraud.
- Get prequalified: Determine whether you're likely to be approved for a loan without damaging your credit score and see your estimated loan terms.
- Use a co-signer or co-borrower: If a family member or friend has good credit, you can ask them to be a co-signer or co-borrower on your loan. Co-signers agree to repay the loan if the borrower fails to make payments, but they have no access to funds or payment information. Co-borrowers, on the other hand, can.
- Add collateral: You can secure your personal loan by adding collateral, like a car or money in your savings account. If you fail to repay the loan, the lender has the right to take your asset. This makes secured personal loans more accessible but also more risky.
- Include additional income: Many lenders allow you to add non-employment income on your application, such as Social Security payments, alimony or child support. A higher income can improve your chances of getting approved.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
7.99%–35.99%
Up to $50,000
9.95% to 35.99%
$2,000 to $35,000
How to choose a personal loan
When choosing a lender for a personal loan, consider these factors:
- APR: The annual percentage rate represents the yearly cost of borrowing, expressed as a percentage. Because it also factors in fees and other additional charges, it's a truer picture than just an interest rate. Choosing the lender that gives you the lowest APR for your credit score will save you money over the life of the loan.
- Fees: Many lenders charge a flat-rate application fee to process your request and, if you're approved, a percentage-based origination fee for processing and underwriting. Your loan may also have a late payment fee or a prepayment penalty. Select a loan with as few fees as possible.
- Loan terms: A longer loan term usually means smaller monthly payments, which are easier to fit into your budget. But it also means you'll pay more in interest over the life of the loan. Try to choose the shortest loan term you can reasonably make monthly payments on.
- Disbursement timeline: Many lenders deposit funds within three to five business days but, if time is of the essence, look for lenders offering same- or next-day funding.
Alternatives to high-interest loans
Bad credit might stop you from qualifying for credit products like 0% APR credit cards or low-interest personal loans. If you want to avoid paying high interest rates, you can look into the following alternatives:
- Peer-to-peer (P2P) loans: P2P loans are offered by individual investors rather than financial institutions. These lenders might be more willing to work with borrowers with lower credit scores and offer lower interest rates.
- Life insurance policy loan: If you have life insurance, you can borrow from its cash value using your policy as collateral. Typically, this type of loan doesn't require a credit check and might offer more favorable terms than a personal loan.
- 401(k) loan: You may be able to borrow money from your workplace retirement fund. You'll have to repay it with interest, but it'll be added back to your 401(k), along with the balance. 401(k) loans typically don't require a minimum credit score.
What's the difference between a secured and an unsecured loan?
A secured loan is a loan backed by collateral. The most common types of secured loans are mortgages and car loans, where the collateral is your home or car. But really, collateral can be any kind of financial asset you own. And if you don't pay back your loan, the bank can seize your collateral as payment. A repossession stays on your credit report for up to seven years.
An unsecured loan requires no collateral, though you're still charged interest and sometimes fees. Student loans, personal loans and credit cards are all examples of unsecured loans.
Since there's no collateral, financial institutions give out unsecured loans based in large part on your credit score, income and history of repaying past debts. For this reason, unsecured loans may have higher interest rates (but not always) than a secured loan.
Pros and cons of applying for a personal loan with bad credit
Borrowers with bad credit should carefully consider the type, rate and term of the loan they're applying for.
- Access to an unsecured personal loan
- Regular, on-time payments will improve your credit score
- You may be able to get a lower rate with a co-signer
- Applying for a new loan can lower your credit score further
- You may get a higher interest rate
- You may only qualify for a smaller loan amount
FAQs
Can I prequalify for a loan without hurting my credit score?
Most lenders allow applicants to prequalify with a soft credit inquiry that doesn't affect their credit score. If you formally apply for the loan, however, they will use a hard inquiry that will temporarily lower your score by several points.
Can personal loans build credit?
If you always make loan payments on time and the lender reports to one of the main credit bureaus, it should improve your credit score.
Can I borrow money with a 500 credit score?
Some lenders work with borrowers with bad credit, but you can expect higher interest rates and fees.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every personal loan list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Our methodology
CNBC Select analyzed dozens of personal loans to find the best for borrowers with bad credit. When possible, we chose loans with no origination or sign-up fees, although some lenders charge fees to borrowers with lower credit scores.
When narrowing down our list, we focused on the following features:
- Fixed-rate APR: Variable rates can fluctuate over the lifetime of your loan. With a fixed-rate APR, you lock in an interest rate for the duration of the loan's term, making it easier to budget.
- Flexible loan amounts/terms: Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to repay your loan.
- No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
- Streamlined application process: We evaluated whether lenders offered same-day approval and a fast online application.
- Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
- Fund disbursement: The loans on our list disburse funds promptly via either an electronic wire transfer to your checking account or a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
- Autopay discounts: We noted lenders that reward customers for enrolling in autopay by lowering their APR.
- Creditor payment limits and loan sizes: The lenders above offer loans ranging from $1,000 to $100,000. Each lender advertises its payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for that amount.
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
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