If you’re looking for a personal loan but have less-than-perfect credit, it may be tough to find an affordable option.
The lenders we’ve picked as the best personal loans for bad credit either offer prequalification options that let you preview your estimated rate without a hard inquiry on your credit reports or don’t check your credit. If you officially apply, the lender may pull a hard inquiry at that time, and your final terms may change.
Keep in mind that these loans are not necessarily available in all states.
- Good for auto-secured loans: OneMain Financial personal loans
- Good for co-signers: Mariner Finance personal loans
- Good payday loan alternative: OppLoans personal loans
- Good for building credit: MoneyLion
- Good for quick loans: Possible Finance personal loans
- Good for no-interest loans: Earnin
- Good for short-term loans: Afterpay
- Good for financial resources: NetCredit personal loans
- What is a bad credit loan?
- When is a bad credit loan a good idea?
- Alternatives to bad credit loans
- Looking to build your credit? Consider a credit builder loan
Good for auto-secured loans: OneMain Financial personal loans
Why a OneMain Financial personal loan stands out: Auto-secured loans from OneMain Financial typically have lower interest rates than the company’s unsecured loans. But they come with costs, including origination, late and insufficient funds fees that may increase the amount you have to repay.
Loan amounts range from $1,500 to $20,000, with repayment terms of two to five years.
Pros
- Prequalification to check potential rate without affecting your credit
- No prepayment penalty
Cons
- Charges an origination fee
- Maximum rates are high
- Charges a late payment fee
Read reviews of OneMain Financial to learn more.
Good for co-signers: Mariner Finance personal loans
Why a Mariner Finance personal loan stands out: Mariner Finance allows you to get a personal loan with a co-signer. If your co-signer has a strong credit history, applying for a personal loan with them may help you qualify or receive a lower interest rate.
Loan amounts range from $1,000 to $25,000. (Amounts and terms may differ on Credit Karma.)
Pros
- You may still be considered after bankruptcy
- Offers unsecured and secured personal loans
- Offers prequalification to check your potential rate
Cons
- Not forthcoming about loan rates
- Must apply through a branch for loans less than $1,500 or greater than $15,000
- Loans not available in all states
Read reviews of Mariner Finance to learn more.
Good payday loan alternative: Opploans personal loans
Why an Opploans personal loan stands out: Payday loans have notoriously high rates and short repayment timelines — and they don’t contribute to your credit history. With a personal loan from OppLoans, the company reports your payments to the credit bureaus.
You don’t have to repay what you borrow on your next payday — repayment terms range from nine to 18 months.
OppLoans offers loans ranging from $500 to $4,000. (Terms may differ on Credit Karma.)
Pros
- Fast same-day funding possible
- Prequalification to check your potential rate without affecting your credit
- Considers more than your credit history and credit scores
Cons
- High APRs in the triple digits
- Must receive income through direct deposit to qualify
Read reviews of OppLoans to learn more.
Good for building credit: MoneyLion
Why a MoneyLion credit-builder loan stands out: MoneyLion offers credit-builder loans of up to $1,000. The company reports loan payments to the three main credit bureaus, helping you establish a positive payment history when you pay on time. You must pay a monthly subscription fee of $19.99 to get a credit-builder loan, but you can earn rewards to offset the fee.
With most credit-builder loans, you must wait until you make all your payments to get your money. With MoneyLion, you get a portion of your loan proceeds upfront, and the company puts the rest in a credit reserve account that you can access at the end of your loan term.
Pros
- Credit-builder loan amounts offered up to $1,000
- No hard credit inquiry to take out a loan
- Automated credit alerts
Cons
- Monthly membership fee
Read our full review of MoneyLion to learn more.
Good for quick loans: Possible Finance personal loans
Why a Possible Finance personal loan stands out: Possible offers the option to borrow up to $500 “instantly” and pay back your loan in four installments. The lender says it usually disburses funds within just minutes (but that it may take up to five days).
Pros
- Can help you build credit over time with on-time payments
- Doesn’t check credit scores to qualify
Cons
- High APRs in the triple digits
- Not available in all states
Read reviews of Possible Finance for more info.
Good for no interest: Earnin
Why Earnin stands out: Earnin is an app that provides interest- and fee-free cash advances of up to $750 per pay period, using your next paycheck as collateral. Using Earnin doesn’t affect your credit, but to use the app you need a steady paycheck and direct deposit into a checking account.
Pros
- Low balance alerts
- No credit checks to qualify
- Early paycheck access
Cons
- Charges a fee for faster access to paycheck advances
- Must use direct deposit to qualify
Read our full review of Earnin to learn more.
Good for short-term loans: Afterpay
Why Afterpay stands out: Afterpay is a buy-now, pay-later app that lets you buy items in stores and online and pay for them in four interest-free installments over six weeks.
The app doesn’t charge interest when you select the pay-in-four option, and there are no fees if you pay on time.
Pros
- Soft credit check won’t affect your credit scores
- Finance in-store and online purchases
- Amount you can borrow may increase over time
Cons
- Loan approval isn’t guaranteed at purchase time
- Late fee of up to 25% of the order value
Read our full review of Afterpay to learn more.
Good for financial resources: NetCredit personal loans
Why a NetCredit personal loan stands out: NetCredit provides a variety of resources to help you take control of your personal finances and reach your financial goals. For instance, it partners with SpringFour to connect customers with local resources for items such as food assistance, job search help and guidance to save money on utilities and other bills. It also partners with EverFi to provide financial education.
Pros
- Small personal loans available up to $10,000 depending on where you live
- Potentially fast funding by the next business day
- Flexible repayment term lengths
Cons
- High rates
- Not available in all states
Read reviews of NetCredit to learn more.
What is a bad credit loan?
If you need money for an emergency expense or other use, you can find lenders that offer personal loans for bad credit. Keep in mind that each lender has its own approval criteria, but FICO defines a “poor” credit score as anything below 580.
And be careful: In some cases, personal loans marketing to people with bad credit can have annual percentage rates, or APRs, that are much higher than the average personal loan, so you’ll want to be selective and compare multiple lenders whenever feasible.
Before you accept a personal loan, it’s important to compare offers for their APRs, fees, loan terms and monthly payments as well as for transparency.
Compare loan terms
If you have bad credit, a personal loan may cost you more because lenders may see you as a greater credit risk. Since personal loans for people with bad credit can be more expensive, it’s especially important to compare loan terms to find the best deal. Here are a few basic terms to pay attention to.
- Annual percentage rate: APR is the total cost you pay each year to borrow the money, including interest and certain fees. A lower APR means the loan will typically cost you less. A personal loan for someone with bad credit will likely have a higher APR.
- Loan repayment terms: Your loan repayment period is the time frame in which you’ll have to repay the loan. Most personal loans require you to make fixed monthly payments for a set period of time. The longer the repayment period, the more interest you’ll likely pay, and the more the loan is likely to cost you.
- Monthly payments: Monthly payments are largely determined by the amount you borrow, your interest rate and your loan term. Make sure the payments are affordable for your budget.
- Loan minimum and maximum: Lenders usually establish a minimum amount and maximum amount they’re willing to lend. A lender may not be a good fit for you if it won’t loan you enough money or if it will require you to borrow more than you want.
- Loan fees: See if the lender charges a loan origination fee to process the loan, a prepayment penalty or a late payment fee.
Also consider the lender’s reputation, especially if you’ll be borrowing from a lender that’s marketing loans for bad credit.
The Better Business Bureau has information about many lenders, and you can check the consumer complaint database maintained by the Consumer Financial Protection Bureau to find out if people have filed complaints against a lender you’re considering.
Should you take out a personal loan if you have bad credit?
While qualifying for a personal loan can be challenging and expensive for someone with bad credit, borrowing may make sense in certain situations.
A key question Is whether the loan option will not only help you now — but won’t hurt you financially in the long term. This can depend upon the loan terms and the loan amount, as well as what you’ll use the loan for. For example, a personal loan for someone with bad credit could be helpful if …
- You have high-interest credit card debt. You could use a personal loan to pay it off. If the personal loan can help you reduce the amount of interest you’ll pay on the debt, it could save you money in the long run. Plus, it could consolidate multiple payments from different credit card issuers into a simpler single payment to one lender.
- You have unforeseen expenses. A personal loan could be a less expensive way to borrow compared to a credit card or payday loan.
In each case, the cost of borrowing can determine whether a personal loan makes sense. With a high-interest personal loan, consolidating may not be worth it if the loan doesn’t actually provide any savings.
Should you take out a loan to pay off credit card debt?Should you consider a payday loan?
If you need money right away, need a small loan or have been denied a personal loan because of your credit, you may be tempted to try a payday loan.
A payday loan is a short-term loan for a small amount, usually $100 to $500. With payday loans, you typically give the lender a post-dated check or electronic access to automatically withdraw money from your bank account. And the loan is usually due on your next pay date, along with fees.
Depending on the state, payday lenders may charge from $10 to $30 per $100 you borrow.
A payday lender won’t necessarily perform a credit check with the major credit bureaus when you apply for a loan. While that may make it easier to get a payday loan when you have bad credit, the high cost could make it difficult to repay.
High-cost payday lending is prohibited in some states. Other states set limits on how much payday lenders can loan, maximum loan terms and finance charges.
What can you do if you’re denied a personal loan?
If you’re denied a personal loan with bad credit, you have some options.
- Look for borrowing alternatives. If a national bank has denied you, an online lender or credit union may be willing to offer you financing. If you can qualify for a credit card, look for a card with low promotional rates.
- Build your credit. Your scores can go up over time if you pay at least the minimum on your monthly bills on time, establish a positive payment history and pay down your debts so that your credit utilization rate improves. You should also check your credit reports for potential errors since a mistake on your credit reports could affect your scores.
If you’re denied credit because of information in your credit reports, you should receive what’s called an adverse action notice from the lender, giving you an explanation. This can help you understand why you were denied and inspire you to comb through your credit reports and see where your credit stands.
When is a bad credit loan a good idea?
Getting a personal loan when you have bad credit is possible, but you may have fewer options and receive less favorable terms than someone with good credit. So it’s essential to weigh your choices carefully. Here are a few things to know about your options.
What kind of personal loan can you get with bad credit?
It depends. Some options include personal installment loans, cash advances, payday loans and buy-now, pay-later apps. But many factors affect the type of loan you qualify for, including your credit score, income, employment history, outstanding debt, collateral, loan purpose and loan term.
Because different lenders have different eligibility requirements, the only way to know what type of loan you can qualify for is to apply.
Can I get a personal loan with a 500 credit score?
Generally, it’s easier for people with higher credit scores to qualify for a loan. But you may be able to get a personal loan even if you have poor credit. Applying with a co-signer who has good credit or a lender that markets to people with bad credit may improve your chances of qualifying.
What is the easiest type of loan to get with bad credit?
It depends on your finances and the lender. Here are a few loan types to consider if you have bad credit.
- Installment loan — Some personal loan lenders offer installment loans to people with bad credit. If you qualify, you’ll likely pay higher interest rates than someone with good credit — but it’ll probably still be less than you’d pay with a payday loan.
- Cash advance — Getting a cash advance through an app like Earnin or Dave may be a good option if you only need a small sum to tide you over until your next paycheck. These companies don’t check your credit, but you must meet the eligibility requirements to use the apps.
- Buy-now, pay-later apps — If you qualify, you can use a BNPL app to purchase items you need and pay for them over time. Since you’re taking on additional debt, it’s best to use these apps only for must-have purchases.
- Payday loans — Payday loans may be attractive because lenders don’t check your credit history, but they’re expensive. A typical payday loan may have an APR of 400%, and the short repayment timeline often traps borrowers in a cycle of debt that’s difficult to escape.
Alternatives to bad credit loans
- Seek out a payment plan: If you need help paying medical bills, you might be able to arrange a payment plan with your healthcare provider, negotiate the owed amount or qualify for a financial assistance program. If you’ve fallen behind on payments for your credit card, you may be able to negotiate debt with your credit card company, too.
- Early paycheck access: If you need a little bit of cash before your next payday, you may want to consider signing up for a bank account that offers early paycheck access. Another option may be exploring an option like Earnin that lets you advance part of your paycheck before payday.
- Payday Alternative Loans (PALs): A payday alternative loan is a short-term small loan offered by some federal credit unions. These usually have much lower fees and APRs compared to traditional payday loans. But you may have to be a credit union member for at least a month before you can apply for a PAL.
Looking to build your credit? Consider a credit builder loan.
Taking out a credit builder loan can help you build your credit by giving you the opportunity to show you can make regular on-time payments, which is an important part of your credit scores.
When you get a credit builder loan, the lender typically puts the money you’ve borrowed into a reserve account it controls. You then make regular payments toward the loan, building a positive payment history that’s reported to the credit bureaus. When the loan is paid off (or you reach a certain threshold), the lender gives you access to the funds.
Loan fees, interest and repayment terms vary among lenders, so you’ll want to compare your options before applying.
You might also want to consider Credit Karma’s Credit Builder plan, which can help you build low credit while you save.
Our methodology: How we pick the best personal loans
Credit Karma’s editors evaluate the best personal loans by reviewing key features of dozens of popular lenders. Those features fall into three important categories:
- Affordability: We start by checking if a lender’s rates are competitive: are they higher than average or are they lower than many competitors? From there, we analyze if fees — particularly an origination fee — may make your loan more unaffordable. Last, we’ll check if the lender offers rate discounts for items such as automatic payments that may reduce your rate.
- Customer-friendly features: Taking out a personal loan is a big financial commitment, so we prioritize lenders that make things easier for you. For instance, do they offer a wide range of loan amounts for people with different borrowing needs? Do they offer at least several loan terms to give you more flexibility with your monthly payment? And, crucially, can they fund your loan quickly? A lender will also get bonus points for offering direct payments for debt consolidation or other customer-friendly features.
- Transparency: We believe personal loan terms should be easy to find and decipher. Prequalification, which lets you check what rate you may qualify for without a hard credit inquiry, is particularly important. We also check to see if a lender has been recently penalized by regulators.
Calculate personal loan costs
To better understand the total cost of any personal loans you’re considering, use an online calculator like Credit Karma’s simple loan calculator. A loan calculator can help you estimate your monthly payment and how much you’d pay in interest versus principal over the length of the loan.
*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.