Personal Loans

Bad Credit Loans: How to Find And Compare Lenders, And Apply

Whether you need to cover a major expense or just consolidate debt with a better interest rate, you have various loan options to consider. With bad credit, however, getting a loan can be challenging.

Below, we’ll cover the various kinds of bad credit loans you may qualify for, and what to expect before you apply.

What to expect when seeking out bad credit loans

Good credit or bad, reputable lenders want to understand your financial situation when approving you for a loan. Lenders require a certain minimum credit score to be approved for their loan. For example, most personal loans require a minimum credit score of 600.

Unfortunately, if you have a fair or poor credit score, you might find it much harder to get approved — that’s because you’re considered a bigger risk to miss payments or to default on your loan.

Where to find bad credit loans

  • Online lenders: Whether you have bad credit and need fast cash now, or you have a little time to wait, you can find personal loans from online-only lenders. (Quick tip: You can use LendingTree to potentially see personalized rates from our partner lenders.) You’ll also find payday and car title loan lenders online, as well, but buyer beware: These loans have extraordinarily high APRs.
  • Banks: Some traditional banks offer personal loan products. However, brick-and-mortar banks have higher overhead costs compared to online lenders and, therefore, have less competitive loan terms to offer.
  • Credit unions: Credit unions require a membership that requires you live, work or attend school in a particular area in order to join. However, they are more community-friendly and may be able to work with you to find a loan that suits your needs. You can find PALs from federal credit unions, in addition to personal loan products.
  • Payday and car title lender locations: Some payday loan lenders have physical locations that you can visit and offer funding the same day your application is approved. However, this convenience comes at an extremely high cost.

Personal loans for poor credit borrowers

Learn more
Learn more
APR 9.99% to 35.99% 5.99% to 29.99%
Terms 24 to 48 months 36 or 60 months
Loan amount $2,000 to $25,000 $4,000 to $25,000
Origination fee 0.00% - 6.00% 1.00% - 5.00%
Minimum credit score required 585 600
Lenders were selected using MagnifyMoney’s marketplace, assuming a credit score below 640. Lenders that did not specify credit requirements are not included. MagnifyMoney is owned by LendingTree.


While many lenders require a minimum score of 600 or higher for a personal loan approval, LendingPoint offers personal loans for bad credit. In addition to considering your credit, the lender will look at:

  • Length of time at your job
  • Current income
  • Financial history
  • Credit behavior

LendingPoint offers personal loans in all states except West Virginia. Unfortunately, joint and co-signed applications are not permitted.


Using Peerform, bad credit borrowers may be able to qualify for personal loans online in amounts ranging from $4,000 to $25,000. Getting a loan through a peer-to-peer lending platform can take a while, however, as your loan has to be funded by investors after your initial approval.

In addition to an origination fee, Peerform charges a late fee for payments that are 15 days or more late. It is equal to 5% of the monthly installment or $15, (whichever is greater). Peerform is not available to residents in Connecticut, North Dakota, Vermont, Wyoming or West Virginia.

How to compare bad credit lenders

Once you have a list of bad credit lenders, it’s important to dig a little deeper before you apply.

By comparing each of the below items, you can determine which is the best lender for you. For example, most lenders allow you to prequalify with a soft credit check, which won’t affect your credit. A prequalification will reveal the types of terms you may qualify for.

  • Interest rates: Loans for people with bad credit typically come with a high interest rate, but you can still shop around and compare terms between lenders.
  • Fees: See if the lender charges origination fees, late fees or any other hidden fees. You may have to add them in to the final costs of the loan.
  • Prepayment penalties: Maybe you want to pay your loan off a little early — if you do so, some lenders may charge you a fee that’s typically equal to a certain percentage of your loan. This is known as a prepayment penalty.
  • Discounts: Some lenders offer a rate discount if you request automatic payments to be withdrawn from your checking account. Other lenders might offer a discount if you have multiple products with them. Keep an eye out for these types of discounts to lower your overall cost of borrowing.
  • Loan availability in your state: Make certain that the lender is allowed to provide loans in your state.

Before you apply for a loan with bad credit

Applying for a loan might help you to ease some of your financial burden or provide much needed cash in an emergency. But before you apply for a loan with bad credit, there are some steps you can take to improve your odds of being approved.

  1. Consider borrowing from a friend or family member: If you can ask a friend or family member for a loan, you may be able to avoid the interest rate and other fees. Even still, make sure you’ve outlined the terms of paying them back, since they are helping you out.
  2. Determine your needs and wants: If, for example, you’re in dire pain and really need a root canal but can’t afford it, taking out a loan is probably the right thing to do. But in less immediate situations, there might be other less costly methods of obtaining cash, such as picking up a side hustle or selling unwanted items.
  3. Review your credit report: Every year, you can obtain a free copy through Review it and dispute any errors you find, such as incorrect amounts of your balances, fraudulent accounts or outdated information. For example, any negative accounts over seven years old must be removed.
  4. Pay down some debt: Lenders want to see that you’re paying down your debt, so paying down smaller debts can help to perk up your credit score. You might then be approved for a larger loan.
  5. Increase your income: Lenders look at many factors, including income. This may mean asking for a raise could help you qualify for credit.
  6. Consider a cosigner: If your credit is too low to be approved, consider finding someone who has better credit to cosign your loan. This will improve your chances of being approved and getting better terms.

After receiving your loan, follow these tips

Once you apply, it may take a few minutes or a few days to get a final decision on your loan. If you have been approved, the money can be in your account within a day or a few days, depending on the lender and type of loan you have taken out. Once you have your money, here are some tips you should follow to put continue and improve your financial situation:

  • Pay on time: Automated payments help to make sure your payments are received on time and makes you look more favorable in the eyes of the lender.
  • Pay more than minimum: If you can prepay and have extra cash in some months, try to pay off your loan as soon as possible. This establishes you as a good credit risk for future loans.
  • Stay on top of your credit score: Once a year, get a new copy of your credit report and make sure no new errors have cropped up.
  • Don’t get further into debt: You’ve just borrowed money to pay an expense. Don’t put yourself further into debt. Instead, focus on improving your income and paying off the debts you have.

Responsible use of your loan and on-time repayment can help your financial burdens now, but it may also help you to qualify for better loans later.


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