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The 13 Best Personal Loans for Borrowers With Bad Credit 2023
Best for Building Credit and Savings
SeedFi
None
Minimum credit score
Best for Credit Scores Below 600
Universal Credit
560
Minimum credit score
Best for No Traditional Credit History
Upstart
580
Minimum credit score
Best for Debt Consolidation Loans
Happy Money
600
Minimum credit score
If you have a bad credit score, you might believe you’re out of options when money is tight — but that doesn’t have to be the case.
You’re not relegated to predatory payday loans and high-interest credit cards. Lots of lenders have options that let you borrow money through personal loans at relatively low cost — some of them even cater specifically to borrowers with low or no credit scores.
In this guide, we share some of the best bad credit loans available for all types of financial situations. Compare your options to see potential interest rates, loan amounts, credit scores and repayment terms — and keep an eye out for lenders with alternative assessment criteria that could help you get approved.
Interest rates accurate as of Feb. 6, 2023 and subject to change.
13 Best Bad Credit Loans at a Glance
Often, the loans and credit available to borrowers with bad credit are less abundant than those for borrowers with good or excellent credit. But you do have options!
Look into these types of loans for bad credit:
When you take out a personal loan for any reason, consider the potential risks in two main categories: the cost to you and the effect on your credit score.
The main cost you’ll pay on a loan is the interest, but look out for all these common costs:
Taking out a personal loan can affect your credit score in these major ways:
Many lenders have a minimum credit score requirement, but your score isn’t the only factor that determines your eligibility for a loan. You may be able to take out a loan with bad credit if any of these factors are favorable:
Follow these steps to get a personal loan with a low credit score:
You don’t have to rely on the bank down the block. You can find a bad credit loan through several types of platforms, including:
A secured loan can be a good option if you have a bad credit score. You put up collateral like a car, jewelry or something else of value to back up your loan, which reduces the lender’s risk. This can be a good way to get the funds you need and — when you repay on time — improve your credit. But take into account that it puts your asset at risk if you don’t repay.
Yes! Secured loans are a traditional option for borrowers with low credit scores. And lots of companies have cropped up in recent years to offer innovative ways to assess a borrower’s creditworthiness without relying solely on a credit score. You’ll likely have to show stable income, education in a lucrative field and/or a history of on-time bill or rent payments. Check out Stilt, OneMain Financial and NetCredit above for loans with no minimum credit score.
You may be eligible for a personal loan with a credit score below 500 with some companies. Most lenders require a minimum score of between 540 and 600, but companies including Stilt, OneMain Financial and NetCredit have no minimum credit score. You could qualify for a loan based on your education, income or bill payment history instead.
Secured personal loans are easier to qualify for than other types of loans, because you put up collateral to reduce a lender’s risk. You can also look into credit builder loans, where the lender withholds all or part of your loan in a savings account and releases it as you repay on time to help you build credit and get the money you need.
Most online lenders can make personal loan funds available — deposited directly into your bank account — within one to three business days. Some will make the deposit as soon as the same day, depending on what time you apply. Many lenders offer loans as little as $1,000, so you can get enough to float you when money is tight without taking on a high-interest payday loan.
An “emergency loan” isn’t a specific type of loan product. It’s a term that refers to any loan you can get on short notice. It could be a personal loan, cash advance, home equity loan or a payday loan. Be careful borrowing money from a lender that advertises an “emergency loan” — they likely want to prey on borrowers with high need who are willing to accept bad terms like ultra-high interest. Try a traditional personal loan first if you can.
Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.
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