Bad Credit Loans: 7 Online Options for 2019
Despite the stigma often associated with bad credit, it can happen to anyone. Of course, poor money management will certainly land you a less than desirable score, but so can medical emergencies, unexpected shifts in employment, or any circumstance that results in unanticipated and or unmanageable debt. Even a small business issue, like a bankruptcy after closing, can significantly damage your credit score.
Unfortunately, having bad credit makes it harder for you to obtain funding, often when you need it the most. Lenders typically use credit scores to evaluate risk, so they’re less likely to extend loans to borrowers with poor credit. And if they do, those loans will often come with high interest rates, fees, and limited terms. The fear, of course, is that the borrower may not be able to meet the loan repayment obligations.
While bad credit can make it harder to obtain affordable financing, that doesn’t mean you can’t qualify for a loan with bad credit. You just need to look for lenders who offer financial products for people in your credit range.
We ranked and rated lenders according to the weighted averages of five data categories to find you the best options. These are our top personal loan lenders for bad credit.
In this guide:
- 7 Best Bad Credit Personal Loan Companies
- Should You Take Out a Personal Loan if You Have Bad Credit?
- What About Payday Loans?
- Resources to Help You Improve Your Credit Score
7 Best Bad Credit Personal Loan Companies
The following are brief reviews of personal loan companies that offer funding to someone who has fair or bad credit. You have options for short-term and long-term repayment.
OneMain Financial
What We Like: Same day funding
Overview
OneMain Financial offers personal loans to a range of borrowers, including those who have poor credit and therefore may not qualify for a loan with another lender. Customers can start the loan application online to receive personalized rates and terms, a process that results in a soft credit check that won’t damage your score. However, to complete the process, approved applicants must visit their local branch office. You may be offered a secured or unsecured loan.
OneMain Financial uses a variety of information to determine eligibility, including income and credit history; however, they do not have a minimum credit score requirement.
Rates, Terms, & Fees
- Loan Amounts: $1,500 – $30,000
- Loan Terms: 24, 36, 48, or 60 months
- APR Range: 16.05% – 35.99%
- Origination Fee: Varies by state
- Early Repayment Fee: None
- Minimum Credit Score: None
The Verdict
Because OneMain Financial looks at a borrower’s entire financial history, not just a credit score, borrowers with bad credit may still qualify for a personal loan. Though the rates aren’t as competitive for prime borrowers, the 35.99% rate max is still lower than those associated with some subprime lenders.
Oportun
What We Like: Access to financial counseling
Overview
Oportun offers personal loans to borrowers in AZ, CA, FL, IL, ID, MO, NJ, NM, NV, TX, UT, and WI. As a lender, Oportun prides itself on offering affordable financing options for borrowers with poor or no credit, and their primary goal is to help borrowers build credit while making fixed bi-weekly payments on their loan. And with terms starting at just 6 months, this may be a good option for those seeking a short-term loan.
Customers can apply for a loan online, by phone, or by visiting their local branch. Funds are typically available the same day of approval.
Rates, Terms, & Fees
- Loan Amounts: $300 – $9,000 (loans larger than $6,000 are only available to return customers).
- Loan Terms: 6 – 46 months
- APR Range: 20.0% – 59.9%
- Origination Fee: Varies by state
- Early Repayment Fee: None
- Minimum Credit Score: None
The Verdict
Oportun personal loans are specifically designed for borrowers who have bad credit or non-existent credit. Interest rates are quite high when compared to other lenders, and loan limits and terms lack the flexibility of other lending products. However, this bad credit loan may be a good option for those who are not eligible for other lending products, prefer manageable bi-weekly payments, and want to build their credit.
Avant
What We Like: No minimum credit score requirement
Overview
Avant is a FinTech company that offers a variety of consumer finance products including personal loans. They offer a short application process that takes place entirely online. Avant does not have a minimum credit score requirement and it offers a wide range of terms and loan amounts, often making it a good option for borrowers with poor credit.
Rates, Terms, and Fees
To be eligible, applicants should have a minimum credit score of at least 580 and have at least $20,000 in gross annual income.
- Loan Amounts: $2,000 – $35,000
- Loan Terms: 24 – 60 months
- APR Range: 9.95% – 35.99%
- Origination Fee: 0% – 4.75%
- Early Repayment Fee: None
- Minimum Credit Score: None
The Verdict
When compared to other subprime lenders, Avant offers competitive rates and origination fees. They are known for high approval rates, and take into account the applicant’s full financial health, not just their credit score. For that reason, they are worth considering, especially if you were unable to get a loan through a traditional lender.
Mariner Finance
What We Like: Access to physical branches
Overview
Mariner Finance is a private lender that offers a variety of products, but it specializes in personal loans for subprime borrowers who want to fund credit card debt consolidation, unexpected expenses, a vacation, home improvements, or a wedding. Mariner claims there is no minimum credit score to apply, but to be eligible for a loan through Mariner Finance, you’ll likely need a credit score of at least 580 to 600 and at least 5 years of credit history. Mariner will consider you if you’ve filed for bankruptcy in the past.
Applications can be submitted online, over the phone, or at a local branch. However, customers who want to borrow more than $7,000 must submit their application at a branch location.
Rates, Terms, & Fees
- Loan Amounts: $1,000 – $25,000
- Loan Terms: 12 to 60 months
- APR Range: 24 – 36%
- Origination Fee: Varies by state
- Early Repayment Fee: None
- Minimum Credit Score: 580 – 600
The Verdict
With rates between 24% and 36%, personal loans through Mariner Finance may still be expensive, but for borrowers with bad credit, the rates are often on par with those offered by other subprime lenders. This lender reports to the major reporting credit bureaus, so making monthly payments on time may be able to improve your score over the life of the loan. However, this loan is likely out of reach for borrowers with extremely bad credit.
LoanMe
What We Like: Three-step application process
Overview
LoanMe offers subprime lending options to borrowers in Arizona, California, Idaho, Missouri, New Mexico, South California, and Utah. Customers can pre-qualify online through a three-step application process, which will not impact their credit score.
LoanMe does not provide a minimum score requirement for their subprime lending products. Instead bases their decisions on a variety of factors, including income, payment history, and credit score. Funds can be available in as little as 3 to 4 hours, and borrowers can use them for any purpose.
Applicants with questions can contact the lender via phone or text with a representative to inquire about products or begin the application process.
Rates, Terms, & Fees
- Loan Amounts: $2,600, $3,100, $7,600, or $10,600
- Loan Terms: 47, 48, 60, 72 or 84 months (varies by state and loan amount)
- APR Range: Up to 74% -184.36%
- Origination Fee: Up to 33% of the loan, but typically no less than $75
- Early Repayment Fee: None
- Minimum Credit Score: None
The Verdict
For a subprime lender, LoanMe bad credit personal loans come with hefty interest rates and fees, the likes of which can add thousands of additional dollars to the original loan amount. Further, loan amounts are limited to those offered by the lender, and in some states, subprime borrowers may only qualify for $2,600.
If you were unable to obtain a loan elsewhere, LoanMe may be a good option, especially since they don’t have a minimum credit score requirement. However, you may want to shop around first.
Stilt
What We Like: Favorable for nonresidents
Overview
Stilt offers personal loans specifically designed for immigrants and international students, specifically those with F-1, OPT, H-1B, TN, DACA status. Applicants do not need an SSN and decisions are based on the applicant’s education, work experience, income, and overall financial behavior.
The online application is easy to complete, and approval often comes by the next business day, though some borrowers may need to participate in a brief verification call. After signing the promissory note, borrowers can expect funds within two to three business days.
Rates, Terms, & Fees
- Loan Amounts: $1,000 – $35,000
- Loan Terms: 6 – 36 months
- APR Range: 7.99% – 25.00%
- Origination Fee: 0% – 5%
- Early Repayment Fee: None
- Minimum Credit Score: None
The Verdict
If you’re just beginning your life in the United States, Stilt can offer you a path to an affordable loan. Because decisions are based on factors like your education and your existing or potential income, not simply a credit score, you may still be eligible for this loan even though you don’t have a SSN or you haven’t had the opportunity to build a U.S. credit report.
Personify Financial
What We Like: Great customer reviews
Overview
Personify Financial offers a personalized lending product for borrowers who may not be eligible for installment loans through other lenders. Customers can complete the easy online application and receive approval in as little as 24 hours, receive funds within seven business days. All you need is proof of income, a checking account, and a few personal details.
This is a good option for borrowers who have a credit score between 560 and 599, and who want a personalized product with easy access to customer service.
Rates, Terms, & Fees
- Loan Amounts: $500 – $10,000 (varies by state)
- Loan Terms: 6 – 36 months (varies by state)
- APR Range: 35% – 179.99%
- Origination Fee: 0% or 5%, (varies by state)
- Early Repayment Fee: None
- Minimum Credit Score: 560
The Verdict
Despite advertised rates as low as 35%, borrowers with poor credit can typically expect significantly higher interest rates from Personify, making this a less affordable option when compared to some other subprime lenders. However, borrowers with very low credit scores may find approval more likely with Personify than with other online lenders. This is particularly true thanks to Personify Financial’s personal approach to lending.
Should You Take Out a Personal Loan if You Have Bad Credit?
If you have bad credit and are considering a personal loan, the most important thing you can do is to consider why you need the loan. If you’re paying off high-interest debt or have a pressing emergency, a personal loan can be a reasonable financing option.
However, because personal loans for bad credit often come with extremely high interest rates and fees, the total cost of the loan rarely merits unnecessary purchases. As such, you may want to consider other options before you use a personal loan to purchase a car, remodel your home, or go on vacation.
If you have time, your best bet is to work on improving your credit score before you apply for a personal loan.
If, however, you do need to take out a personal loan with bad credit, then it’s imperative that you make sure your budget can accommodate repayment obligations for the life of the loan.
By making regular payments, you may find that a personal loan can help build your credit; however, failure to make timely payments can have an adverse effect, leaving your score even lower than it was.
What About Payday Loans?
Though a payday loan may be an attractive option for those with bad credit, they typically represent one of the most dangerous lending products on the market today. Payday lenders offer immediate cash in exchange for automatic payment (via postdated check or auto deduction agreement). Repayment, however, includes the loan amount as well as a significant amount of interest, often in the realm of 400%.
Unforunately, these loans often make it even harder to get out of debt and can be detrimental to your financial future.
>> Read More: Alternatives to Get Out of the Payday Loan Cycle
Resources to Help You Improve Your Credit Score
If you have bad credit, it’s not the end of the world. You can still qualify for loans from some lenders, but you might decide to wait and improve your credit if you are rejected for a loan or want better interest rates. There are a lot of ways that you can improve your credit, but not all of them are quick fixes. The best way to improve your credit is to borrow responsibly and repay your debt over time.
Here are some helpful articles to get started on raising your credit score:
Bottom Line: Finding the Right Bad Credit Loan
Though bad credit can make it harder for you to secure a personal loan, it’s not impossible. There are several lenders who specialize in subprime lending and are eager to work with consumers who have poor or non-existent credit. However, keep in mind that these bad credit loans typically come with high interest rates and limited terms. As such, it’s best to consider your reason for the loan, and if possible, work on improving your credit score before apply.
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