Get a Personal Loan With Bad Credit

You can get a loan while having a bad credit score by comparing interest rates and fees from lenders that offer loans designed for borrowers with bad credit. And better yet, consider improving your credit before applying for a loan so you qualify for better terms.

You may be able to get a loan with bad credit if you work with a lender that doesn’t require good credit, or if you can qualify based on other criteria. While your credit score can be an important factor in getting a loan, lenders may also consider your income, debts, collateral and credit history. Get a personal loan with bad credit, Go Now.

How Does Bad Credit Affect Your Ability to Get a Loan?

For credit scores that range from 300 to 850, a score lower than 670 could be considered a bad credit score by lenders. Having bad credit could limit your options and lead to more expensive loan offers.

People with bad credit tend to have negative marks in their credit reports, such as late payments or accounts that are past due or in collections. The resulting low credit score tells a lender that the person is more likely to miss a loan payment in the future, which could cost the lender money.

Some lenders decide to limit their risk by only working with prime (good credit) borrowers. Others see it as a business opportunity and focus on offering loans to subprime (bad credit) borrowers. There are also lenders that offer loans to borrowers across the credit spectrum.

In general, lenders that offer loans to borrowers with bad credit may offset their risk by charging a higher origination fee and interest rate, resulting in a higher annual percentage rate (APR).

For example, say you want to borrow $10,000 and repay the loan over three years.

• If you have bad credit, you might receive a loan offer with a 5% origination fee and 29% interest rate—adding up to a 32.8% APR. You’d wind up paying about $419 each month and $5,086 in interest by the time the loan is paid off.
• If you have good credit, you might get a loan offer with a 1% origination fee and 10% interest rate—a 10.69% APR. You’ll pay about $323 each month and $1,616 in total interest.

A loan’s APR takes its interest rate, fees and repayment term into account, which is why comparing loan offers’ APRs can help you determine which loan is cheapest overall. Lenders often advertise an APR range with their loans, and your offers’ rates can depend on your creditworthiness, the loan amounts and the repayment terms.

Getting a Personal Loan With Fair or Bad Credit

Fewer lenders will give you a loan if you have bad credit. However, you may still have options, and shopping around to find your best offers is still a good idea.

You could start by looking for lenders that regularly work with borrowers who have fair credit—credit scores ranging from 580 to 669. Here are two popular options:

• Avant is an online lender and most of its borrowers have a credit score of 600 to 700. The lender offers personal loans ranging from $2,000 to $35,000 with up to 60-month repayment terms, and there’s an administrative fee of up to 4.75% on the loans.
• Upstart requires a credit score of 580 or higher, but it also looks at nontraditional factors (such as your employment history and higher education) that may make it easier for some borrowers to get approved with a low rate. Loan amounts can range from $1,000 to $50,000 with either three- or five-year terms and an origination fee of 0% to 8%.

The best options can also change over time. Even if your financial situation stays the same, lenders regularly tighten or ease their credit requirements based on competition in the marketplace and changes in the economy.

Consider Improving Your Credit Before Applying

If you aren’t looking for an emergency loan, you may want to focus on improving your credit before borrowing money.

You can see how even a small change in your loan’s interest rate can directly impact your monthly payment and how much you pay overall.