|Lender||APR area||Minimum loan amount||Maximum loan amount||conditions||Recommended creditworthiness|
Best online loan
|9.95% -35.99%||$ 2,000||$ 35,000||24-60 months||600+|
|First Tech Federal Credit Union
Best maximum loan amount
|Starts at 6.7%||$ 500||$ 50,000||24-84 months||580+|
|Navy Federal Credit Union
Best for small loans and veterans
|7.49% – 18.00%||$ 250||$ 50,000||Up to 60 months||580+|
Best personal loan after bankruptcy
|9.99% -35.99%||$ 2,000||$ 36,500||24-60 months||585+|
Best personal credit experience
|18% -35.99%||$ 1,500||$ 20,000||24-60 months||580+|
|PenFed Credit Union
Best credit union
|From 5.99%||$ 500||$ 35,000||Up to 60 months||580+|
Best for quick funding
|5.97% -29.99%||$ 2,000||$ 45,000||36 or 60 months||580+|
Best Peer-to-Peer Loans
|8.05% -35.89%||$ 1,000||$ 40,000||36 or 60 months||600+|
Best personal loan with a co-signer
|5.94% -35.97% with autopay||$ 1,000||$ 50,000||36-60 months||620+|
|Local credit unions
Best Alternative Payday Loans
|up to 28%||up to $ 1,000||1-6 months|
frequently asked Questions
What is considered bad credit?
The credit scores used by most lenders range from 300 to 850. If you have a FICO score below 670, you are loudly considered a subprime borrower with a “fair” credit score experience. The credit bureau classifies a FICO score of less than 580 as “very bad”.
It is important to understand that taking out a personal loan with bad credit can be quite expensive. Depending on your credit rating, interest rates can often rise to the upper 30% range. Other barriers you might encounter when trying to get loans with poor credit ratings include lower loan amounts and shorter repayment periods. To help you compare the best loan options available, we examined more than a dozen personal loans for bad credit. We compared interest rates, fees, qualification requirements, and other credit characteristics.
How do you know what credit score range you are in?
- Excellent credit: 800-850
- Very good credit rating: 740-799
- Good credit: 670-739
- Fair credit: 580-669
- Bad credit: below 580
What interest rate can I expect if I have bad credit?
As a reminder, if you have a FICO score below 670, you are considered a subprime borrower. If your FICO score is less than 580, your credit is in the “very bad” category.
Each lender sets their own criteria (including creditworthiness thresholds) for loan approval and pricing. This makes it difficult to predict exactly what APR you will be offered on a personal loan when you have poor credit. The interest rates on personal loans can range from about 5.5% to 36%. If your credit rating is poor, expect to be offered rates on the higher end of that scale.
You may also come across lenders who promise “guaranteed approval” or “no credit check” on personal loans with poor creditworthiness. Promises like these should be a warning sign. Legitimate lenders never give these guarantees, they say Federal Trade Commission, or even say you will likely qualify for a loan before applying.
Where can I get a personal loan with a bad credit rating?
Getting a personal loan with bad credit can be a challenge. Still, you can find multiple lenders willing to do business with you (but usually at a higher interest rate). When looking for bad credit personal loan options, there are two main sources of credit that you should consider.
- Online Personal Loans For Bad Credit: Online credit networks will take your loan application and connect you with lenders who may be ready to approve you for a personal loan. Often times, you can submit an initial form and compare quotes from multiple lenders.
- Direct lenders for personal loans with bad credit: Direct personal loans come direct from the financial institution that you are approved with. This can include local banks and credit unions, online banks, and online direct lenders. Generally, if you have poor credit, it is best to only apply to direct lenders who are willing to do business with borrowers who are vulnerable to credit.
For a combination of the best personal loans for bad credit worthiness from both sources, see the guide above.
Personal Loans vs. Payday Loans
When you have poor credit, small payday loans can be easier to qualify for. But they come at a very high price. The average APR on a typical $ 100 two-week payday loan is nearly 400%. according to CFPB.
If you qualify for a bad credit personal loan, you can potentially find yourself borrowing much cheaper than using a payday loan. Even an interest rate near 36% – the high end of the range for most personal loans – costs far less than the average fees a payday lender can charge.
In addition, numerous local credit unions are now offering Alternative Payday Loans (PALs). These loans can provide borrowers with poor credit access to more affordable short-term financing. The maximum interest rate for a PAL is 28%.
Personal loans vs. installment loans
In most cases, personal loans and installment loans are one and the same. Although it is possible to take out a personal line of credit (LOC) if you need to borrow money, a LOC is a revolving account. Most financial professionals would not classify a LOC as a personal loan. (Also, if you have bad credit, you may have difficulty qualifying for a LOC.)
Installment loans, like personal loans, get their name from the way they work. You borrow a fixed amount of money and pay back the borrowed funds (plus interest and fees) to the lender in fixed installments or installments. If the lender reports the account to the credit bureaus, a personal loan usually appears as an installment account on your credit reports.
Personal Loans vs. Peer-to-Peer Loans
A peer-to-peer (P2P) loan is another way to borrow money that is similar to a traditional installment loan. However, if you qualify for a P2P loan, the money you borrow will not necessarily be issued by a bank or lender. Instead, the funds are usually loaned to you by an investor or group of investors. As with personal loans, many P2P lenders will report your account to the credit bureaus. Additionally, you may need a credit score of 600 or higher to be approved (although each P2P network and investor can have their own approval criteria).
To apply for a P2P loan, you must submit an application through a website that connects potential borrowers with potential investors. Before you commit (or even apply), however, you should do some research. It is advisable to learn more about the prices, fees, and terms on offer and to compare them to your other options available. Although P2P lending can sometimes have looser approval criteria than traditional bank lending, the tradeoff can be faced with higher interest rates and fees.
The bottom line
Just because you have bad credit doesn’t mean you need to turn to a predatory payday lender in an emergency. Even if you have credit problems, you should compare all the options available as a cheaper solution may be available.
How we picked the best personal loans for bad credit
Investopedia is committed to providing consumers with unbiased, comprehensive personal lender reviews for all credit needs. We collected over twenty-five data points from more than fifty lenders, including interest rates, fees, loan amounts, and repayment terms, to ensure our content helps users make the right loan decision for their needs.