Loans for bad credit

Name: Credible Loans for Bad Credit
Brand: Credible
Rating: 4.8 (8314 reviews)

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By Meredith Mangan

Written by

Meredith Mangan

Meredith Mangan is a senior editor at Credible. She has more than 18 years of experience in finance and is an expert on personal loans.

Edited by Kelly Larsen

Written by

Kelly Larsen

Kelly Larsen is a student loans editor at Credible. She has spent over 10 years covering personal finance, with expertise in mortgage and debt management.

Updated April 22, 2025

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Best Bad Credit Loan Rates for May 2025

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The rates that appear are from companies which Credible receives compensation. This compensation does not impact how or where products appear within the table. The rates and information shown do not include all financial service providers or all of the displayed lender's available services and product offerings.

Filters$20,000 loan amount and 700-749 credit score, ordered by APR

LightStream

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Rates from (APR)

6.49-25.29%⁴

Loan term

2 - 7 years

Loan amount

Up to $100,000

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LightStream: Best for personal loans overall

Lightstream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses like home improvements or weddings. Funds are available as soon as the same day you apply and there are no origination fees. Rates are also among the lowest we've seen — as of this writing, Lightstream's lowest APR beats SoFi's advertised lowest APR by 1 percentage point. But you'll need good credit to qualify.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 700

Origination fee: None

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: As soon as the same business day

Best Egg

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Rates from (APR)

6.99-35.99%

Loan term

2 - 5 years

Loan amount

Up to $50,000

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Best Egg: Best for secured loans

Best Egg is a solid lender for a wide range of borrowers. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 9.99% with Best Egg.

Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 600

Origination fee: 0.99% to 9.99%

Check processing fee: $7

Do they allow a cosigner: No

Late fee: $15

Time to fund: As soon as 1 - 3 business days after successful verification

Upstart

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Rates from (APR)

7.80-35.99%

Loan term

3, 5 years

Loan amount

Up to $50,000

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Upstart: Best for fast personal loans for all credit types

Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.

Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 620

Origination fee: 0% to 12%

Check processing fee: None

Do they allow a cosigner: No

Late fee: 5% of late payment or $15 (whichever is greater)

Time to fund: As soon as 1 - 3 business days

LendingClub

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Rates from (APR)

7.90-35.99%⁵

Loan term

2 - 6 years

Loan amount

Up to $40,000

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LendingClub: Best for online experience

LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It's easy to prequalify with LendingClub, especially if you're uncomfortable providing your Social Security number, as the company doesn't require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)

While prequalification is not a guarantee that you'll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you're less likely to have your application declined once you apply (if you've already prequalified). LendingClub may charge an origination fee between 0% and 8%.

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 660

Origination fee: 0% to 8%

Check processing fee: $7

Do they allow a cosigner: No, but co-borrowers allowed

Late fee: 5% of late payment or $15 (whichever is greater)

Time to fund: 22-hour funding upon approval

Splash Financial

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Rates from (APR)

7.99-17.97%

Loan term

3 - 6 years

Loan amount

Up to $50,000

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Splash Financial: Best for quick loans for good credit

It's worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). The platform offers loans from a wide range of lenders, and next-day funding is available. Plus, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email. Loans are available up to $100,000 if you apply via Splash's website.

Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere. Splash is not an option for borrowers with bad credit.

Prepayment penalty: None

Unsuccessful payment fee: Varies by lender

Minimum credit score: 680

Origination fee: 3.99% to 7.49%

Check processing fee: None

Do they allow a cosigner: No

Late fee: Varies by lender

Time to fund: Funding in as little as one business day for eligible applicants

Reach Financial

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Rates from (APR)

7.99-35.99%

Loan term

2 - 5 years

Loan amount

Up to $40,000

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Reach Financial: Best for fast funding and fair credit

Reach is an option if you have fair credit, especially if you need money fast. According to the company, 90% of Reach personal loans are funded within one day of approval.

It's a good choice for debt consolidation and credit card refinancing, but borrowers with excellent credit may not find the lowest rates with Reach. The company also charges more fees than some of its competitors and doesn't offer direct pay or autopay discounts. If you need a 7-year term loan, you'll need to look elsewhere. Reach personal loans are not available in all states.

Prepayment penalty: None

Unsuccessful payment fee: $25

Minimum credit score: 660

Origination fee: 0% to 8%

Check processing fee: None

Do they allow a cosigner: No

Late fee: $15

Time to fund: 90% funded within a day

Upgrade

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Rates from (APR)

7.99-35.99%

Loan term

2 - 7 years

Loan amount

Up to $50,000

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Upgrade: Best for fair credit

Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.

However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.

Prepayment penalty: None

Unsuccessful payment fee: $10

Minimum credit score: 580

Origination fee: 1.85% to 9.99%

Check processing fee: None

Do they allow a cosigner: No

Late fee: $10

Time to fund: Within a day of clearing necessary verifications

Happy Money

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Rates from (APR)

8.95-29.99%

Loan term

2 - 5 years

Loan amount

Up to $40,000

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Happy Money: Best for consolidating credit card debt

Happy Money has been in operation since 2009 (formerly known as Payoff). It's an option for fair-credit borrowers (plus those with better credit), and notably has a relatively low top-end APR. In other words, you could qualify for a lower rate with Happy Money with fair credit, relative to other lenders that offer fair-credit loans. The company does charge an origination fee on some loans, up to 5%, but that's not as high as some other lenders' origination fees.

You should be prepared to wait a few days to get your money, as funding can take three to five days once approved. And loans aren't available in Massachusetts or Nevada. Happy Money has an A+ rating with the BBB and is ideal for debt consolidation and credit card consolidation loans.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 640

Origination fee: 2% to 5%

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: As soon as 2 - 5 business days after verification

SoFi

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Rates from (APR)

8.99-35.49%³

Loan term

2 - 7 years

Loan amount

$5,000 - $100,000

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SoFi: Best for excellent credit

SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn't require your Social Security number.

The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don't have good credit. You also won't be able to apply with a cosigner, since SoFi doesn't accept cosigners; nor does it offer secured personal loans.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: Does not disclose

Origination fee: 0% - 7%

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: Typically within a few days, given approval and bank account verification

Prosper

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Rates from (APR)

8.99-35.99%

Loan term

2 - 5 years

Loan amount

Up to $50,000

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Prosper: Best for peer-to-peer lender

Prosper is the only remaining true P2P marketplace in the peer-to-peer lending space that connects borrowers with individual investors for some loans. If you apply for a loan with Prosper, the funding may come from an individual who has chosen to invest in you. Prosper offers personal loans between $2,000 and $50,000 with terms between 2 and 5 years, and funding as soon as one business day. You can use a personal loan through Prosper for a variety of purposes, including debt consolidation and home improvement. The platform has excellent customer service reviews on Trustpilot, as well.

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 640

Origination fee: 1% to 9.99%

Check processing fee: $5 or 5% of the payment (whichever is lower)

Do they allow a cosigner: Yes

Late fee: 5% of late payment or $15 (whichever is greater)

Time to fund: 1 business day following acceptance of loan offer, completion of all necessary verification steps and final approval. One business day is also dependent on your bank’s ability to quickly process the transaction.

Rocket Loans

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Rates from (APR)

9.12-29.99%

Loan term

3, 5 years

Loan amount

Up to $45,000

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Rocket Loans: Best for fast personal loans

Rocket Loans delivers no-frills same-day personal loans with a generous autopay discount to good-credit borrowers and some borrowers with fair credit. APRs and available loan amounts are competitive — Rocket Loans offers $2,000 loans up to $45,000 loans. Plus, the company offers small business loans if you apply directly through its website. However, you’ll only have a choice between two repayment terms — 3 or 5 years — and origination fees can be as high as 9%. If you have fair credit, you may qualify, but won’t be able to add a cosigner or get a secured loan to improve your rate.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 640

Origination fee: Up to 9%

Check processing fee: None

Do they allow a cosigner: No

Late fee: Yes

Time to fund: If approved, you may receive funds in your account as soon as the same business day

Avant

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Rates from (APR)

9.95-35.99%

Loan term

2 - 5 years

Loan amount

Up to $35,000

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Avant: Best for all credit types

Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.

Prepayment penalty: None

Unsuccessful payment fee: $15

Minimum credit score: 550

Origination fee: 0.95% to 9.99%

Check processing fee: None

Do they allow a cosigner: No

Late fee: $25

Time to fund: As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)

BHG Financial

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Rates from (APR)

9.96-23.48%⁶

Loan term

3 - 10 years

Loan amount

Up to $200,000

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BHG Financial: Best for large personal loans

BHG Financial stands out for offering the largest loan amounts — up to $200,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher. The primary applicant has to meet both income and FICO requirements, the co-applicant only has to meet the income requirements.

Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 3% and 4%, depending on your financial profile. Loan funds are available within five to 14 days of loan approval.

Prepayment penalty: None

Unsuccessful payment fee: $20

Minimum credit score: 660

Origination fee: 3% to 4%

Check processing fee: None

Do they allow a cosigner: No

Late fee: Lesser of $40 or 5% of the payment.

Time to fund: Funding in as few as 5 days

Reprise Financial

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Rates from (APR)

9.99-35.99%

Loan term

3-5 years

Loan amount

Up to $25,000

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Reprise Financial: Best for bad credit

Reprise may be an excellent option if you need a loan with bad credit. The lender says it will consider applicants with FICO scores as low as 560, and offers secured loans as well as some cosigned loans to help you qualify. Loan funds can be available the next business day once you’re approved. Plus, the company has a 4.7 Trustpilot rating — indicating generally satisfied customers. But Reprise is not for everyone. Available loan amounts are relatively low at $25,000, and the minimum repayment term is relatively high at three years. The lender also charges origination fees, does not offer discounts, does not consider income from self-employment, and is not available nationwide.

Prepayment penalty: None

Unsuccessful payment fee: Return Payment Fees - $20 except where state has a different limit (ie – NM)

Minimum credit score: 560

Origination fee: 0% to 6%

Check processing fee: None

Do they allow a cosigner: No

Late fee: Late Fees - $15 except where the state has a different limit (ie. NM)

Time to fund: If your loan is funded by 3pm CST (not including weekends or holidays) you will receive your funds the next business day.

Citibank

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Rates from (APR)

11.49-20.49%⁷

Loan term

1 - 5 years

Loan amount

Up to $30,000

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Citibank: Best for no fees

Citi offers no-fee personal loans to borrowers with very good credit (a FICO credit score of 740 or higher). No-fee means no origination fees and no late fees, and Citi is one of very few lenders that don’t charge either. (Origination fees are deducted from the loan upfront, reducing the amount you receive).

Though Citi requires a relatively high credit score to qualify, its minimum income requirement is low. The company also offers a generous 0.50 percentage point autopay discount and makes same day funding available to current Citi customers.

Citi offers relatively small loans, as low as $2,000. But the maximum amount you can borrow is capped at $30,000, which is less than most of its competitors. Another drawback is that the minimum APR is relatively high. Just keep in mind that even with excellent credit, you may not qualify for a lender’s lowest advertised rate, which is one reason it’s good to prequalify with multiple lenders before applying.

Citi personal loans are available nationwide.

Prepayment penalty: None

Unsuccessful payment fee: None

Minimum credit score: 740

Origination fee: None

Check processing fee: None

Do they allow a cosigner: No

Late fee: None

Time to fund: Same day with an existing Citi account, or within 2 business days with a non-Citi account

Universal Credit

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Rates from (APR)

11.69-35.99%

Loan term

3, 5, or 7 years

Loan amount

Up to $50,000

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Universal Credit: Best for debt consolidation loans for bad credit

Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.

Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.

Prepayment penalty: None

Unsuccessful payment fee: $10

Minimum credit score: 580

Origination fee: 5.25% - 9.99%

Check processing fee: None

Do they allow a cosigner: No

Late fee: $10

Time to fund: As soon as 1 business day after acceptance

OneMain Financial

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Rates from (APR)

18.00-35.99%

Loan term

2 - 5 years

Loan amount

Up to $20,000

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OneMain Financial: Best for bad credit personal loans

OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score requirement, meaning you could get a personal loan with bad credit or no credit. Cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.

Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given. According to internal Credible data, OneMain had one of the lowest rates of loan approval after prequalification among partner lenders.

Prepayment penalty: None

Unsuccessful payment fee: $10 to $50

Minimum credit score: N/A

Origination fee: $25 to $500

Check processing fee: None

Do they allow a cosigner: Yes

Late fee: $5 - $30

Time to fund: As soon as 1 - 2 days after acceptance

Bad credit loan interest rates

Bad credit loan rates are affected by the overall interest rate environment, including economic factors such as inflation. They’re also influenced by your credit history, income, employment record, and outstanding debts.

To determine what your personal loan rate might be if you have bad credit, you can prequalify online. Prequalifying won’t affect your credit score and is only an estimate of the rates and terms you might receive. If you move ahead with a formal application, lenders usually perform a hard credit inquiry, which could temporarily drop your credit score by a few points.

Because lenders tend to offer their lowest rates to borrowers with excellent credit, rates for bad credit loans tend to be higher than average personal loan rates. Below is a breakdown of average personal loan rates by credit score, according to Credible loan data.

Current personal loan interest rates by credit score

How do bad credit loans work?

A bad credit loan is a type of installment loan, which means you pay back the borrowed amount in regular installments, usually monthly. Both the payments and interest rate are typically fixed, which means they stay the same every month.

Repayment terms: You usually have multiple options for repayment terms. Depending on the lender and the loan you choose, terms could vary from around two to seven years, with some lenders offering longer terms for specific loan purposes like home improvement.
Loan amounts: The amount you can borrow with a bad credit loan typically ranges from $1,000 to $50,000. You might even be able to borrow up to $100,000 or more with certain lenders. But you would need strong compensating factors to qualify for a large loan with bad credit.
Interest rates: Interest rates for bad credit loans are higher than they are for good credit. If you have bad credit, your interest rate could be 30% or more, which could negate the purpose of getting a loan entirely.
Fees: Many bad credit loans charge origination fees, which are upfront fees that are deducted from your loan proceeds. The annual percentage rate (APR) of a bad credit loan accounts for the origination fee, making it easier to compare the overall yearly cost from one lender to another. Some lenders also charge fees for late payments, returned checks and insufficient funds (not reflected in the APR).
Funding times: The time it takes to get your loan funds vary from lender to lender. Some lenders can deposit your money the same day you’re approved, while others can take several business days.

Related: How Do Personal Loans Work?

How to compare personal loans for bad credit

If you're able to qualify for a personal loan with bad credit, it's important to find a loan with a payment you can afford to make, on-time, for the duration of the loan's term. This is because a personal loan can be an opportunity to improve your credit score, which can help you qualify for financing (and low interest rates) in the future. Second to the monthly payment, compare APRs between loan options. The APR indicates the cost of the loan, and lower is better.

Finally, most bad credit loans have an origination fee. This is a one-time fee that's deducted upfront from the loan proceeds. It's accounted for in the loan's APR, but it reduces the amount of money you receive. Make sure the amount that will be deposited in your bank account (or sent to your creditors) after the origination fee is deducted is enough for your needs.

How to avoid a personal loans scam

Unfortunately, there are predatory lenders out there that try to take advantage of people with bad credit by promising quick funding and no-credit-check loans. However, many legitimate lenders may also offer these things.

To avoid a bad credit loan scam, look out for lenders that:

Request a fee in advance: A lender that asks for a processing fee or application fee before you apply or are approved is a scam. This is different from an origination fee, which is taken from the amount you borrow, not from your bank account.
Ask for payment using methods that can’t be traced: Never agree to make loan payments in cash or by wire, as those methods have no paper trail that can be traced. Same with “lenders” that ask you to send payment via courier.
Guarantee you’ll be approved no matter what: A lender that promises to loan money to you is not reputable.
Ask for the title on your car: This is a sign of a title loan, which is a predatory type of loan with exceptionally high fees. If you default on the loan, you can lose your car.
Promise “insurance” on a loan: Loans don’t require insurance, though they may be an option for some types of loans. If a lender requires money for insurance on a loan, that’s a sign of a scam.
Ask for your bank login information: A lender doesn’t need login credentials for your bank account. That’s a sign a criminal is about to clear out your savings.

Learn More: How to Check If a Personal Loan Company Is Legitimate

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In 2024 We helped over

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We've saved our customers

over $43 million

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If you’re approved, you’ll just need to sign your documents — then relax as the funds make their way to you.

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Benefits of taking out a personal loan

Lower rates

Getting rid of high-interest debt can save you money on interest payments.

Improve your credit

Making on-time payments on a loan can boost your credit score.

No collateral

Most personal loans don’t require collateral, so you won’t need to use your home or vehicle to secure it.

For all your goals

Get a personal loan for all your financial needs

Our lender partners support personal loans for many different loan purposes. They offer low interest rates and a variety of loan amounts and loan terms to help you meet your personal and financial goals.

Debt Consolidation

Pay off high-interest debt by combining it all into a single loan and payment at a lower interest rate.

Debt Consolidation Loans

Home Improvement

Finance a home improvement project from major repairs to a remodel or addition.

Home Improvement Loans

Credit Card Refinancing

Refinance high-interest credit debt by combining it all into one loan and payment at a lower interest rate.

Credit Card Refinancing Loans

Bad Credit Loans

Loans for those who may have credit difficulties (like poor credit or a thin credit history).

Bad Credit Loans

Just need money? Get started now.

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Bad credit loan FAQs

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

What are bad-credit loans?

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A bad-credit loan is any type of loan that is approved for a borrower who has bad credit. Bad credit, or poor credit, is defined as a FICO score below 580.

Many lenders do not offer bad-credit personal loans unless the applicant has a cosigner with good credit, a co-borrower with good credit, or offers collateral to secure the loan, such as a car or the fixtures in your home. If you get approved for a bad-credit loan, expect to pay a relatively high interest rate and fees.

Learn More: What Is a Bad Credit Loan?

How can I get a personal loan with bad credit?

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To get a personal loan with bad credit, you should ideally have a reliable and sufficient income to make loan payments, as well as a low debt-to-income ratio (DTI).

Since lenders are hesitant to make bad-credit loans, you may also need collateral for a secured loan or a cosigner with good credit to get approved. Not all lenders allow cosigners or offer secured loans — research those that do before applying. If you don’t need money immediately, you could get a credit-builder loan.

Learn More: How To Get a Bad Credit Loan

What is a bad credit score?

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A bad credit score is a FICO score that’s below 580. With a bad credit score, it can be hard — but not impossible — to get approved for new credit, as there are few lenders that offer bad-credit loans.

It’s easier to get approved with a fair credit score, which is a FICO score between 580 and 669. Making timely debt payments and decreasing your credit utilization can help improve your score.

How to qualify for a personal loan with bad credit

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Having bad credit can make it difficult to qualify for a personal loan, but not impossible. Try the following tactics:

Apply for a personal loan with a cosigner
Apply with a co-borrower
Apply for a secured loan
Apply for a smaller loan amount
Improve your credit first
Apply for a credit-builder loan
Apply for a payday alternative loan (PAL)

Learn More: What Are the Requirements for a Personal Loan?

What are the pros and cons of bad-credit loans?

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Pros:

Can get much-needed funds
Can pay for emergencies
Easy approval on payday loans and cash advance apps
Quick funding
Some loan types can build credit

Cons:

High fees, and APRs can be in the triple digits, depending on loan type
Approval for bad-credit personal loans can be difficult
Payday loans and cash advance apps won’t build credit
May lead to a cycle of debt

Learn More: Pros and Cons of Bad Credit Loans

Where can I get a bad-credit loan?

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Bad-credit loans are available from some online lenders, very few banks, credit unions, payday loan lenders, and via online cash advance apps. If you have a cosigner with good credit who’s willing to share responsibility for the loan, you’re more likely to be approved.

But not all lenders allow cosigners. If you need a small emergency loan, consider a payday alternative loan (PAL) from a credit union — approval is relatively easy and the maximum APR is 28% (much lower than payday loans and most cash advance apps).

How does a bad credit loan affect your credit score?

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A bad-credit loan will affect your credit score just like any loan would — it can improve your score if you make timely payments and pay the loan off in full. It can also hurt your score further if you miss payments or default on the loan. What’s worse, if you have a cosigner or a co-borrower on the loan, you could hurt their credit as well.

Note that no-credit check loans, such as payday loans and cash advance apps, rarely report your payments to a credit bureau, which means you generally can’t build your credit with these loans. But if you don’t pay a payday loan, it could be sent to collections and appear as a derogatory mark on your credit report.

What are the alternatives to bad-credit loans?

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Bad-credit loans can be a bad idea, especially if you’re considering a payday loan or a cash advance app where APRs can be well over 100%. Alternatives include:

Payday alternative loans (PALs)
Credit-builder loans
Home equity loans
Home equity lines of credit (HELOCs)
Credit cards
Cash-out refinance (home or car)
Cash-value life insurance loan
401(k) loans
Money from friends and family

The best choice will depend on what you can qualify for and what’s available to you. But if you’re having trouble paying bills or making ends meet, consider talking to a credit counselor about options. You should also avoid tapping retirement funds if you think you might file for bankruptcy.

Related: Personal Loan Alternatives

Can I refinance a bad-credit loan?

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Yes, you can refinance a bad-credit loan. If you’ve improved your credit score, it’s probably one of the first things you want to look into doing. For example, if you’ve made the jump from bad credit to fair credit (a FICO score above 580), you could reduce the interest rate on a personal loan by 3 percentage points, considering current personal loan interest rates.

If you have good credit (a FICO score above 669), you could reduce your rate by 10 percentage points. If you’re paying off one or more payday loans and have a willing cosigner with good credit, it could be worth it to try to consolidate payday loans even with bad credit.

Check Out: Refinancing a Personal Loan: Can It Be Done?

What types of loans can I get with bad credit?

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You have several options, even with bad credit. But some are much better than others:

Personal loans for bad credit: Offered by some lenders specifically for borrowers with FICO scores below 580, bad credit loans have interest rates that are generally capped at 36% APR and can be used to pay for emergency expenses and debt consolidation.
Secured loans: These require collateral, such as a car or savings account, which can make approval easier despite bad credit. Just note that the lender can take your collateral if you miss payments.
Payday loans: Payday loans have short terms and very high fees, which result in exorbitant APRs. The CFPB reports that the typical 2-week payday loan has an APR just under 400%. They don't require a credit check, but will require a post-dated check or other means by which the lender can withdraw the amount due from your bank account.
Title loans: Your vehicle's title is used as collateral. Like payday loans, title loans carry high risk, high APRs, and should be avoided if possible.
Payday alternative loans: Federal credit unions may offer payday alternative loans (PALs) which are designed as an alternative to payday loans. They often don't involve a credit check and you may be able to borrow up to $2,000 with a repayment term up to 12 months.
Peer-to-peer (P2P) loans: These loans are funded by individual investors through online platforms. Credit requirements vary.
Small bank loans: Some banks offer short-term funding solutions with low fees to existing customers up to $500 or $1,000. Check your bank to see what's available.

Always compare lender reviews, loan APRs, and consider your ability to repay before taking out a loan with bad credit.

Learn More: 8 Types of Bad-Credit Loans and Common Uses

Can I get a loan with no credit check?

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Yes, you may be able to get a loan without a credit check, but these types of loans typically come with high APRs, high fees, and short repayment terms. Lenders who offer no-credit-check loans often base approval on your income, employment status, or collateral rather than your credit history.

While this can be helpful if you have poor or no credit, it's important to be cautious. Loans like payday loans and title loans can be very expensive and risky. If you can't pay the loan back, you could get trapped in a cycle of ever-increasing debt (payday loans) or lose your car (title loans). Try to qualify for a loan with a credit check by finding lenders that offer loans for bad credit — before you sign for a payday loan, title loan, or other short-term, high fee loan.

Disclosure: Some lending partners that participate in Credible’s comparison marketplace offer loans to borrowers with scores as low as 550. Borrowers with low scores will have fewer lending options than borrowers with higher credit scores.

¹Personal Loans Rate and Terms Disclosure: Rates for personal loans provided by lenders on the Credible platform range between 6.49% - 35.99% APR with terms from 12 to 120 months. Credible also works with network Partners like MoneyLion, AmONE, Alternative Providers, and non-lender providers who offer loan and other products with different rates and terms than described here. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 12%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 10.43%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32, assuming your lender deducts the origination fee from the offered loan amount. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 3, 2022, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.

Prequalified rates are based on the information you provide and a soft credit inquiry. Receiving prequalified rates does not guarantee that the Lender will extend you an offer of credit. You are not yet approved for a loan or a specific rate. All credit decisions, including loan approval, if any, are determined by Lenders, in their sole discretion. Lowest rate advertised is not available for all loan sizes, types, or purposes, and assumes a very well qualified borrower with an excellent credit profile.

²To check the rates and terms you may prequalify for, Credible conducts a soft credit pull that will not affect your credit score. If you choose a lender and continue with your application, the lender will usually conduct a hard credit pull that may impact your credit score.

Debt consolidation and credit card refinancing involve using a new loan to pay off your existing balance. This does not eliminate debt, but replaces one debt with another. While personal loan rates generally are lower than credit card interest rates, you may pay more in origination fees and interest over the life of the loan depending on other loan terms. Please consult a financial advisor to determine if refinancing or consolidating is right for you.

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