Even if you have a poor to fair credit score, it’s still possible to get a personal loan (and one with a reasonably competitive interest rate). To help you out, we researched over 50 different online and traditional lenders to find the best personal loans for borrowers with bad credit. We’ve compiled our top picks in the list below.
- Best for Bad Credit (Under 630)
- Best for Poor to Fair Credit (630 to 680)
- Summary of Our Top Picks
- Our Methodology
- How to Get a Personal Loan With Bad Credit
Best Personal Loans for Bad Credit (Under 630)
Even if you have a credit score under 630, it’s still possible to get a personal loan. Take a look at our top picks below.
Most Avant borrowers have credit scores between 600 and 700, making it a good choice for a personal loan if you have a less than perfect credit score. We recommend that you have a credit score of at least 580 to be eligible for a personal loan from Avant. In addition, borrowers who qualify at Avant typically have annual incomes between $50,000 to $100,000, so we don’t recommend this lender for low-income borrowers. While rates at Avant are not as low as the ones from Backed, you won’t need a cosigner to qualify for a rate between 9.95% and 35.99%. You can also borrow more than you can at Backed, up to $35,000, and there are no collateral requirements.
One thing we like about Avant is that the lender offers flexibility when it comes to repaying your loan. You can change your upcoming and future loan payments up to one day before they are due. This includes changing the payment amount and the due date. The lender also provides late payment forgiveness, refunding its $25 late fee if you make three consecutive on-time payments after your late payment. Avant is available in all states, except Iowa, Colorado and West Virginia.
Best for: High-income borrowers with a credit score of at least 580.
- APR: 9.95% - 35.99%
- Loan term: 2 to 5 years
- Origination fee: 0.95% - 4.75%
- Loan amount: $1,000 - $35,000
- 1+ days to get funds
Backed (With a Cosigner)
We think Backed is a great choice for a personal loan, provided you’re willing and able to have a cosigner. Backed has extremely competitive rates, with annual percentage rates (APRs) between 2.9% and 15.99%. Many personal loan companies can often have APRs as high as 36%. And unlike a traditional cosigner arrangement, Backed provides a few benefits to its cosigners, or “backers”. Namely, cosigners will be notified immediately of any late or missed payments and given a 15 day grace period before any late fees or credit reporting begins. To qualify, your cosigner will need to have a minimum credit score of 660, annual income of at least $18,000, no current delinquencies and no bankruptcies in the last seven years (if you don’t want a cosigner, you’ll need to meet these requirements yourself).
You’ll be able to borrow up to $25,000 through Backed with terms of one, two or three years. This is one downside to Backed -- many personal loan companies will allow you to borrow up to $30,000 to $50,000 with terms up to five or seven years. Another downside to using Backed is that it is currently only available in six states: New York, New Jersey, Arkansas, West Virginia, Florida and Arizona.
Best for: Borrowers who are willing to have a cosigner and who live in NY, NJ, AR, WV, FL or AZ.
- APR: 2.90% - 15.99%
- Loan term: 1, 2 or 3 years
- Origination fee: 0.8% - 2.0%
- Loan amount: $3,000 - $25,000
- 2-10 days to get funds
If you have a credit score below 600, we suggest considering a personal loan from OneMain Financial. OneMain Financial does not require a minimum credit score to apply. In fact, roughly half of the company’s lending went to borrowers with credit scores under 620 in 2016. However, if you have a very low credit score, the lender may require you to secure your loan with collateral. Most borrowers use their personal vehicle or car to secure the loan. You can borrow up to $25,000 with terms from three to five years through OneMain Financial. Rates are between 9.99% and 35.99%, though only borrowers who secure their loans with collateral will qualify for the lowest rate.
One disadvantage of using OneMain is that you may have to visit a branch in person to complete your application. While the lender claims that 83% of Americans live within 25 miles of a branch, it is still inconvenient to visit if you want a seamless, online experience. The lender does offer online loans through its iLoan brand, but the application process, loan terms and eligibility criteria are different. Thankfully, OneMain Financial is available in all states.
Best for: Borrowers with credit scores under 620 who are okay putting up collateral.
- APR: 9.99% - 36.00%
- Loan term: 3 to 6 years
- Origination fee: Varies by state
- Loan amount: $1,500 - $25,000
- 1+ days to get funds
Consider a Cosigned or Secured Loan
Personal loan companies mainly rely on your credit score and history when evaluating whether to approve you or not. This means that having a poor credit score can hurt your chances of getting a personal loan. While some lenders do cater to borrowers with poor credit scores, they typically charge very high interest rates, usually up to 36% (lenders that charge more than this are likely predatory or not reputable). To get a better rate, we recommend borrowers consider getting a cosigner or securing their loan with collateral. These strategies are not without their risks, but they can help you get approved and qualify for a reasonable interest rate.
|Lender||Accepts Cosigners?||Offers Secured Loans?|
|LightStream||Yes||Auto loans only|
|Mariner Finance||Yes||Yes (over $10,000)|
Best Personal Loans for Poor to Fair Credit (630 to 680)
There are many lenders that cater to borrowers with poor to fair credit scores, which are typically scores from 630 to 680.
Credit unions are a great place to get a personal loan, as many credit unions are willing to work with borrowers who have less than perfect credit scores. If you belong to a credit union affiliated with a profession, employer or association membership, the credit union may consider other factors, such as your employment status, income, banking relationship and educational background, besides your credit history in evaluating your loan application. Another benefit of using a credit union is that most federal credit unions have interest rates capped at 18%. Local and community credit unions may charger higher rates, but in most cases, these rates won’t exceed 36%.
One thing we like about credit unions is that many of them make small-dollar loans as low as $250 or $500. These loans are a much better alternative to taking out a payday or no credit check loan. While you will typically need to be a member to get a credit union loan, many credit unions will allow you to join if you live in the geographical area they serve, are sponsored by your employer, have a family member who is an existing member or are a member of a particularly organization or association.
Best for: Borrowers who want a community banking experience, existing credit union members and small-dollar loans.
- APR: Up to 18%+
- Loan terms: Up to 5 years
- Days to get funds: 3 -7
- Loan amount: $500 - $50,000
- Recommended credit score: Varies
- Cosigners may be allowed
We think Upstart is another excellent choice for a personal loan if you have fair credit as the lender provides competitive rates and terms. Rates at Upstart vary from 8.69% to 29.99% with the average rate around 18% on a three-year loan. Loans can be made up to $50,000 with terms of three or five years. To qualify at Upstart, you’ll need a credit score of 620 or above and a verifiable source of income (or to be starting a full-time job within six months). Upstart will also consider your educational and employment history when making a loan decision, and this is what allows them to have more flexible credit requirements than other lenders.
One thing we particularly like about Upstart is that the lender partners with 17 coding and development bootcamps across the country, including Dev Bootcamp, Fullstack Academy and Hackbright Academy. If you’re accepted into one of these partner programs, you are eligible to apply for a Upstart loan to finance your course even if you don’t have a four-year degree or a job offer. Upstart is available in all states, with the exception of West Virginia, and if approved for a loan, you can receive funds within one day.
Best for: Fair credit borrowers with high income or strong educational history, and financing for coding bootcamps.
- APR: 7.37% - 29.99%
- Loan term: 3 or 5 years
- Origination fee: 1% - 6%
- Loan amount: $1,000 - $50,000
- 1+ days to get funds
Lending Club is a good choice for borrowers with fair credit, little debt and high incomes. While you’ll only need a credit score of 600 to apply at Lending Club , the average borrower has a score closer to 700, so we cannot recommend Lending Club for borrowers with credit scores under 630. Lending Club doesn’t have strict credit history, income or debt-to-income requirements, but borrowers tend to have at least 15 years of credit history, annual income of $76,000 and debt-to-income ratios around 18%, excluding mortgages or housing payments. If your credit score is on the lower end of fair (around 630 to 660), you’ll have a better chance of being approved if you have little debt, a good salary or lengthy credit history.
You can apply to borrow up to $40,000 through Lending Club, with rates between 5.99% and 35.89% and terms of three or five years. On average, the rate for a Lending Club loan is approximately 14%. One downside to Lending Club is the funding time. Because Lending Club is a marketplace lender, it will take longer to fund your loan offer. The average funding time is around seven days. Lending Club is available in all states except Iowa and West Virginia.
Best for: Fair credit borrowers with lengthy credit history, little non-mortgage debt or high annual incomes.
- APR: 5.99% - 35.89%
- Loan term: 3 or 5 years
- Origination fee: 1% - 6%
- Loan amount: $1,000 - $40,000
- 7+ days to get funds
We think Peerform is a better choice for borrowers who cannot meet the debt-to-income or income qualifications seen at other lenders in this category. If you want to qualify for a Peerform personal loan, you will need a minimum credit score of 600, a debt-to-income ratio below 40%, no current delinquencies or recent bankruptcies, an open bank account and at least one revolving account on your credit history (i.e., a credit card or line of credit). We also like Peerform because the lender offers competitive interest rates, especially for borrowers with fair to average credit, from 5.99% to 29.99%. However, you can only borrow up to $25,000 with Peerform, and the lender only offers three-year maturities on its personal loans.
Like Lending Club, Peerform is a marketplace lender, so funding your personal loan can take some time. According to the lender’s website, this means anywhere from three days to two weeks. Thankfully, Peerform is available in 41 states across the U.S. -- Peerform isn’t available to residents of Connecticut, Idaho, Iowa, Kansas, Maine, North Dakota, Vermont, West Virginia or Wyoming.
Best for: Borrowers with fair to average credit, regardless of income.
- APR: 5.99% - 29.99%
- Loan term: 3 years
- Origination fee: 1% - 5%
- Loan amount: $4,000 - $25,000
- 2-14 days to get funds
Summary of Our Top Picks
In the table below, we’ve summarized the best personal loans for borrowers with poor to fair credit.
|Good for…||Lender||Recommended Min. Credit Score||APRs|
|Borrowers with bad credit (under 630)||Avant||580||9.95% - 35.99%|
|Backed (with a cosigner)||660 (cosigner)||2.90% - 15.99%|
|OneMain Financial||None||9.99% - 36.00%|
Borrowers with poor to fair credit (630 to 680)
|Credit unions||Varies||5.99% - 18%+|
|Upstart||620||7.37% - 29.99%|
|Lending Club||600||5.99% - 35.89%|
|Peerform||600||5.99% - 29.99%|
We evaluated over 50 different personal loan companies to find the best personal loans for borrowers with poor to fair credit. In our review, we considered the following criteria:
- Competitive APRs: In most states, the maximum APR for a personal loan is capped at 36%. We looked at lenders that offered competitive rates for borrowers, regardless of whether the borrowers had good or bad credit.
- Fair fees: Some of the lenders in this list do not charge any fees. Of the lenders who do, the fees were reasonable, with origination fees of no more than 6% and late fees no more than $25 or 5% of the monthly past due. None of the lenders has prepayment penalties.
- Range of loan amount and terms: All of the lenders on this list let individuals borrow at least $25,000 and offered longer or more flexible repayment options. Typical terms were between two to seven years.
- Transparent rate and fee disclosure: Trustworthy lenders will present rates, fees and loan amounts upfront, instead of requiring you to apply to figure out what the cost of the loan will be. Lenders we included in this list all had easy-to-find and transparent rate and fee schedules on their websites.
- Geographic reach: Most of the lenders on this list are available in at least 40 states across the U.S., making them a better fit for a wider variety of borrowers.
- Lender credibility: We evaluated the credibility of the lenders on this list based on user reviews, Better Business Bureau (BBB) ratings and the company itself. All lenders on this list had positive user reviews and/or BBB ratings.
Lenders included in this list generally scored well in each of the criteria above by having competitive, clear and transparent fees, rates and terms.
How to Find the Best Personal Loans for Bad Credit
It’s still possible to get a competitive offer on a personal loan, even if you don’t have a great credit score. The key is to shop around and consider a variety of lenders: online lenders, credit unions, banks and even microlenders. Thankfully, due to government regulations, most personal loans will not have interest rates higher than 36%, so you should be able get this rate or lower on a loan. One great way to lower your rate is to apply for a loan with a cosigner or get a secured loan.
Having a cosigner with excellent credit history will help you qualify for a low APR, which will make your loan easier to repay. The same goes for securing your loan with collateral. However, both of these methods are not without risks. If you default on a loan with a cosigner, your cosigner will be on the hook for paying off the loan. In the case of a secured loan, the lender has the right to seize the collateral if you are delinquent or in default.
If you don’t want to secure or cosign your loan, there are still options to get a good personal loan, despite a poor credit score. One way is to show lenders that you have been actively repairing and improving your credit score. This can be done through making on-time payments for any debt you have and keeping your credit utilization low. It also helps to work with a lender with whom you have an established and positive relationship (i.e., the bank or credit union where you have a checking account or mortgage). In this case, the lender may be more willing to overlook flaws in your credit history.