Best Loans for Bad Credit in March 2026

Interest rates for bad credit loans

• Average APR: 30.57%
• Average credit score: 563
• Average loan amount: $7,607

Averages are for borrowers with FICO scores below 580 who got a personal loan on the Credible marketplace from March 2025 through February 2026.

If you have bad credit (a FICO score below 580) and can get approved for a personal loan, you can expect an APR near or above 30%. With good credit, your APR could be closer to the 15%-20% range. 

Use the calculator below to get a sense of how much your monthly loan payment could be. If you have bad credit, input a rate of 30% or more. If the payment is too high, try extending the loan term to lower it. Just keep in mind that most lenders cap repayment terms at five or seven years. 

Best bad credit loan lenders of 2026

Bad-credit borrowers took out more than $2.78 million in personal loans through Credible over the past 12 months. Most loans were used to consolidate debt, refinance credit cards, or pay bills or rent.

Bad credit rates by loan purpose

Here are average rates on closed loans, by loan purpose, on the Credible personal loan marketplace for borrowers with FICO scores of less than 580 from March 2025 through February 2026. The most common loan purposes are listed below.

1. Debt consolidation: 30.35% 
2. Credit card refinancing: 30.47% 
3. Bills or rent: 30.98% 
4. Home improvement: 31.32% 
5. Major purchase: 30.13% 
6. Special occasion: 28.87% 
7. Medical expenses: 30.22% 
8. Moving: 30.99% 
9. Car repair: 27.49% 
10. Vacation: 33.13% 
11. Taxes: 29.60%

Read More: What Are Personal Loans Used For?

What to compare when choosing a bad credit loan

There are many types of bad credit loans, including payday advances via cash apps, payday loans, title loans, pawnshop loans, and some personal loans. Personal loans are typically the most affordable, by a wide margin. They also tend to have the lowest payments and give you the longest time to repay. Plus, they can improve your credit score if managed well. 

Below, we show you what to compare when choosing a personal loan for bad credit. But you can generally apply the following to any type of loan.

1. Your total cost (interest rate + fees)

The annual percentage rate (APR) represents the cost of your loan, accounting for the interest rate and upfront fees. Bad credit personal loans usually carry APRs over 30% but top out at 36%. While high relative to loans for borrowers with better credit, APRs are much lower than those of short-term loans. (Cash apps and payday loans can have APRs well over 100%.)  

But it’s important to be aware of how upfront fees — called origination fees — will impact your loan. Depending on the lender and your financial profile, origination fees can be up to 15% of the loan amount. In many cases, this fee is deducted from your loan funds, meaning you would receive less than the amount you borrow. For instance, if you need to finance a $5,000 purchase but your loan has a 10% origination fee that’s deducted upfront, you’d receive only $4,500 but still have to repay $5,000 plus interest.

Other fees include late payment fees and returned payment or insufficient fund fees.

When comparing loans: The best loan is often the loan with the lowest APR.

2. Your monthly payment 

Your monthly payment depends on the rate you’re approved for and the amount you borrow. As noted, the lower your credit score, the higher your APR. However, the repayment term you choose can also tweak your rate — longer terms tend to have higher APRs, while shorter terms can have lower ones. Repayment terms typically range from two to five years. 

• Longer terms = lower monthly payments, but more total interest
• Shorter terms = higher monthly payments, but less total interest

When comparing loans: Focus on a monthly payment you can afford for the duration of the loan’s repayment term, and only borrow what you need. 

3. Funding speed

Funding timelines vary by lender — from same-day, next-business-day, or several business days. If you’re using the loan to consolidate debt, it could take a few additional days for the money to reach your creditors, especially if you’re having the lender send it directly to them.

When comparing loans: If your timeline matters, prioritize lenders that clearly disclose fast funding options or emergency loans.

4. Loan amounts

The amount you can borrow with a bad credit loan typically ranges from a few hundred dollars to $10,000 or more, depending on the type of loan and the lender. Some of the factors that could lower your APR on a personal loan (including income, collateral, and using a cosigner or a co-borrower) could also increase the loan amount you qualify for.

When comparing loans: Most lenders advertise their minimum and maximum loan amounts, so look for a lender that matches up with how much you need to borrow. Keep in mind that with bad credit, you're less likely to qualify for higher loan amounts from a bank, credit union, or online lender.

5. Lender reputation and perks

Beyond the numbers, consider the lender itself. Start by checking out the lender's website. 

• Is there a thorough FAQ section (frequently asked questions)? 
• Can you easily find which fees are charged, how much, and under what circumstances, along with the lender’s APR range? 
• Is there a grace period for late payments? 
• Can you change your due date? 
• Does the lender offer discounts?

Next, look at customer reviews on third-party websites. A reputable lender with clear terms and positive customer experiences may be worth choosing over a lender with a slightly lower rate but less transparency and poor customer feedback.

When comparing loans: Look for transparency and fee disclosures, positive customer reviews (Trustpilot, the Better Business Bureau, Google reviews), and available discounts (such as autopay and direct-pay discounts).

How to spot bad-credit loan scams

Unfortunately, there are predatory lenders out there who try to take advantage of people with bad credit. 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. The same goes for requests 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.
• 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: 8 Signs of a Personal Loan Scam

How to improve your credit and chances of approval

If you're not confident you have the qualifications to get a personal loan, or you've tried before and been denied, you can take steps to put yourself in a better position. Here's a list of some things you can do to improve your credit:

1. Check your credit report for errors and dispute any you find

Unlike your credit score, your credit report is a complete history of how you've used credit and managed your finances. Unfortunately, credit reports sometimes have incorrect or outdated information that could make you seem more risky to a lender.

Get free copies of your credit reports from all three major credit bureaus at AnnualCreditReport.com. Check each report for inaccuracies — for example, a debt you've already repaid but is still listed as outstanding. If you see anything that looks incorrect, follow the Consumer Financial Protection Bureau's step-by-step guide on how to dispute information on your credit report.

2. Make credit payments on time

Your payment history is the most important factor in your FICO score. It accounts for 35% of your overall score. If you make payments to credit accounts on time every month, you can gradually improve your credit score. But if your record of making on-time payments is inconsistent, the opposite can happen.

In short, always make payments on time. One way to reduce the risk of late payments is to set up auto-pay on your accounts.

The types of credit accounts considered in your payment history can include:

• Credit cards
• Retail accounts, such as department store credit cards
• Installment loans, such as personal loans and car loans
• Mortgages

Also, FICO has announced that it will incorporate "Buy Now, Pay Later" (BNPL) purchases into its scoring model. Some services, like Affirm, are already reporting new plans to the bureaus. So get in the habit of paying off your BNPL purchases on time.

3. Apply for a secured credit card

Secured credit cards are designed for people with low credit scores or limited credit history. You make a cash security deposit and then use the card as you would use an unsecured credit card (which includes making your payments on time). The deposit is typically refunded when you upgrade to an unsecured card or close the account.

Used responsibly, a secured credit card that reports to one or more of the credit bureaus can help build your credit over time. It can also provide a convenient alternative to paying cash or worrying whether you have enough money in your checking account to cover debit card purchases.

4. Become an authorized user on another person's credit card

If you have a parent, sibling, or close friend who uses their credit card responsibly, you could benefit from their good credit habits by becoming an authorized user on their card. 

You don't have to use the card yourself — and it's probably best that you and the primary cardholder agree that you won't. If the card issuer reports authorized user data to the credit bureaus, the primary user's payment and purchase activity would also show up on your credit report as well.

However, the key is knowing a cardholder you can trust, and vice versa. If you know someone who would be willing to help, ask them about contacting the card issuer to add you as an authorized user.

You can also try other credit-building strategies, including paying down current debt to reduce your credit utilization. 

Read more tips in How To Build Your Credit: A Step-by-Step Guide.

Alternatives to personal loans for bad credit

If you don’t qualify for a personal loan, you have several other options to consider, but some are much better than others. We break them down by “recommended” to “avoid if possible.” We do not recommend payday loans or title loans under any circumstances.

Recommended

• Small bank loans: Some banks, including Bank of America and U.S. Bank, offer small-dollar loans to existing customers, often with flat fees instead of interest. Loan amounts are usually limited to less than $1,000, repaid in three equal monthly installments. However, you may have to be a bank customer for a certain amount of time to qualify — 6 months or 1 year in some cases — so it's not a good option for non-customers in an emergency.
• Payday alternative loans (PALs): PALs are offered by some federal credit unions, with rates capped at 28% APR. Loan amounts may be available up to $2,000 or $1,000, depending on the type of PAL, with repayment terms up to 1 year or 6 months. Credit union membership is required, but you may be eligible immediately after joining.

Use with caution

• Buy now, pay later (BNPL): BNPL services, such as Klarna, Affirm, and Afterpay, let you split up payments rather than paying the entire cost upfront. Short-term plans may be interest-free with no credit check required, but you may pay financing fees and late fees. 

Avoid if possible

• Loan apps: Loan apps, such as EarnIn and Dave, offer quick funding without a credit check. However, repayment is often due in days — out of your next paycheck — and you may have to pay subscription fees, expedited funding fees, or other charges that can send APRs well over 100%. Unless you have a small one-time need, cash apps are best avoided. 
• 401(k) loans: If you have money in a 401(k) account, you may be able to borrow from it to use for whatever you need. Since it’s your money, there’s no credit check, and many plans allow loans. But borrowing from your retirement account comes with risks. If you don’t pay the money back, you could owe income tax and a 10% penalty on the unpaid balance. And the amount you borrow is not invested during the loan’s term, which means you could miss out on investment gains. Importantly, if you think bankruptcy is in your future, avoid this route or talk to an attorney before getting a 401(k) loan. Retirement accounts are typically protected during bankruptcy.
• Pawnshop loans: A pawnshop loan is a non-recourse loan, which means the lender can’t come after you if you don’t pay it back. They just keep the item you put up as collateral. While we don’t recommend pawnshop loans, they can be a better choice than payday or title loans. If you don’t repay a payday loan or title loan, you could be subject to collection calls and credit damage — and with a title loan, the lender could repossess your car. 

Non-loan alternatives

• Negotiating debt directly: You may be able to negotiate with your credit card company or with a debt collector. However, negotiation isn't a "get out of debt free" card. For example, your credit card issuer might agree to lower your rate or accept a lump-sum payment lower than the amount you currently owe, but you will most likely have to pay at least something. Plus, a settled account can have a large negative impact on your credit score for years.
• Debt management plans (DMPs): A DMP isn’t a new loan, but a way to better manage and reduce the cost of your current debts. You’ll need to work with a certified credit counselor to set it up. Fees are typically modest, but you’re required to close all credit cards you enroll in the plan.

Methodology

Credible's rating system incorporates 1,216 data points across 32 partner and non-partner lenders. We rate lenders based on these weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible's team of experts gathers information from lender websites and directly from our partners. We consider partner lenders' statistics over a 12-month period — including average rates, average funding times, and average credit scores for approved applicants. Each data point is verified by a senior editor to make sure it's accurate at the time of publication. 

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.

Where we get our data

Credible is a personal loans marketplace that partners directly with lenders to offer loans for a wide range of credit profiles and loan purposes. Because of these relationships, we have access to the most current interest rates that real borrowers are being approved for, along with average rates by credit score and loan purpose, approval rates overall and by lender, and more. The data we use is primary source data, updated weekly, and does not include any personally identifiable information about borrowers.