Top Personal Loans for Bad Credit at a Glance
Before diving into detailed reviews, here’s a quick comparison of our top-rated personal loans for borrowers with bad credit in 2025. Each lender has been evaluated based on minimum credit requirements, interest rates, loan amounts, and other key factors important to borrowers with credit challenges.
| Lender | Min. Credit Score | APR Range | Loan Amounts | Term Lengths | Key Features |
| Upstart | 300 | 6.70% – 35.99% | $1,000 – $75,000 | 36 – 60 months | AI-powered approval, accepts no credit history |
| Upgrade | 580 | 7.74% – 35.99% | $1,000 – $50,000 | 24 – 84 months | Secured loan options, flexible terms |
| Universal Credit | 560 | 11.69% – 35.99% | $1,000 – $50,000 | 36 – 60 months | Credit-building tools, rate discounts |
| Avant | 550 | 9.95% – 35.99% | $2,000 – $35,000 | 24 – 60 months | Next-day funding, mobile app |
| OneMain Financial | None specified | 18.00% – 35.99% | $1,500 – $20,000 | 24 – 60 months | Secured loan options, in-person service |
| Prosper | 560 | 8.99% – 35.99% | $2,000 – $50,000 | 24 – 60 months | Joint application option, peer-to-peer lending |
| Oportun | None required | Up to 35.99% | $300 – $10,000 | 12 – 54 months | Small loan amounts, no credit history needed |
Understanding Bad Credit and Personal Loans
Before exploring specific lenders, it’s important to understand what constitutes “bad credit” and how it affects your loan options.
Credit score ranges and their impact on loan eligibility
What Is Considered Bad Credit?
Most lenders consider FICO scores below 580 to be “bad credit.” Scores between 580-669 are typically classified as “fair.” When your credit score falls into these lower ranges, you’ll face more limited loan options and higher interest rates.
How Credit Scores Affect Loan Terms
Your credit score impacts several aspects of your loan:
- Interest rates: Lower credit scores typically result in higher APRs, sometimes reaching the maximum allowed rate of 35.99%.
- Loan amounts: Bad credit may limit the maximum amount you can borrow.
- Repayment terms: You might have fewer options for how long you can take to repay.
- Fees: Expect higher origination fees with bad credit, often 5-10% of the loan amount.
- Approval odds: Many traditional lenders automatically reject applications below certain credit thresholds.
- Collateral requirements: You may need to secure the loan with an asset.
Detailed Reviews of the Best Personal Loans for Bad Credit
Let’s examine each of our top-recommended lenders in detail to help you find the best match for your specific situation.
Upstart: Best for Lowest Minimum Credit Score
Upstart stands out for its willingness to work with borrowers across the credit spectrum, including those with scores as low as 300. What makes Upstart unique is its AI-powered underwriting model that considers factors beyond your credit score, such as education, employment history, and income.
Pros
- Accepts borrowers with credit scores as low as 300
- Will consider applicants with no credit history
- Fast funding (as soon as next business day)
- Competitive starting APR of 6.70%
- No minimum income requirement
Cons
- Origination fee up to 12% of loan amount
- Limited repayment terms (only 3 or 5 years)
- High late payment fees
- Maximum APR reaches 35.99%
Eligibility Requirements
To qualify for an Upstart personal loan, you’ll need:
- A minimum credit score of 300 (or no credit history but with educational credentials)
- A valid email address and personal bank account
- A regular source of income
- A valid U.S. residential address (except Iowa and West Virginia)
- To be at least 18 years old (19 in Alabama and Nebraska)
Application Process
Upstart’s application process is straightforward and entirely online:
- Complete the pre-qualification form to check your rate without affecting your credit score
- Review your loan offers and select the best option
- Provide verification documents (ID, proof of income, etc.)
- Accept the loan terms and sign electronically
- Receive funds as soon as the next business day after approval
Pros
- Wide range of repayment terms (2-7 years)
- Secured loan options using a vehicle as collateral
- Joint application option to improve approval odds
- Next-day funding after approval
- Free credit monitoring for borrowers
Cons
- Origination fee up to 9.99%
- Minimum credit score of 580 required
- Late payment fees apply
- High maximum APR of 35.99%
Eligibility Requirements
To qualify for an Upgrade personal loan, you’ll need:
- A minimum credit score of 580
- A verifiable bank account
- A valid email address
- Proof of income
- To be a U.S. citizen, permanent resident, or residing in the U.S. on a valid visa
Application Process
Upgrade makes applying for a loan straightforward:
- Check your rate online without affecting your credit score
- Select your preferred loan amount and term
- Complete the formal application with required documentation
- Review and accept your final loan offer
- Receive funds in your bank account as soon as the next day
Universal Credit, owned by Upgrade, stands out for its comprehensive credit-building tools. With a minimum credit score requirement of 560, it offers accessible financing while providing resources to help improve your financial health over time.
Pros
- Free credit score monitoring and educational resources
- Rate discount for enrolling in autopay
- Accepts credit scores as low as 560
- Direct payment to creditors for debt consolidation
- Auto-secured loan options available
Cons
- Higher starting APR (11.69%)
- Minimum origination fee of 5.25%
- Limited repayment terms (3-5 years only)
- Maximum APR of 35.99%
Eligibility Requirements
To qualify for a Universal Credit personal loan, you’ll need:
- A minimum credit score of 560
- A valid bank account
- A steady source of income
- To be at least 18 years old
- A valid Social Security Number
Application Process
Universal Credit offers a streamlined application experience:
- Complete the online pre-qualification form
- Review your personalized loan offers
- Submit required documentation for verification
- Accept your loan terms
- Receive funds within one business day after approval
Additional Top Lenders for Bad Credit
While our top three picks offer excellent options for most borrowers with bad credit, these additional lenders may better suit specific needs.
Avant: Best for Fast Funding
Min. Credit Score: 550
APR Range: 9.95% – 35.99%
Loan Amounts: $2,000 – $35,000
Key Feature: Funding as soon as the next business day after approval, making it ideal for emergencies.
OneMain Financial: Best for Secured Options
Min. Credit Score: None specified
APR Range: 18.00% – 35.99%
Loan Amounts: $1,500 – $20,000
Key Feature: Offers secured loans using vehicles as collateral, potentially improving approval odds and rates.
Prosper: Best for Joint Applications
Min. Credit Score: 560
APR Range: 8.99% – 35.99%
Loan Amounts: $2,000 – $50,000
Key Feature: Joint application option allows you to apply with a co-borrower to improve approval odds and potentially secure better rates.
How to Improve Your Chances of Loan Approval with Bad Credit
Having bad credit doesn’t mean you’re automatically disqualified from getting a personal loan. Here are strategies to increase your approval odds and potentially secure better terms.
Consider a Co-Signer or Co-Borrower
Adding a creditworthy co-signer or co-borrower to your application can significantly improve your chances of approval. A co-signer agrees to repay the loan if you default, while a co-borrower shares equal responsibility for the loan and has equal access to the funds.
Explore Secured Loan Options
Secured loans require collateral (like a vehicle or savings account) that the lender can claim if you default. Because this reduces the lender’s risk, secured loans are often easier to qualify for and may offer lower interest rates compared to unsecured loans.
Improve Your Debt-to-Income Ratio
Your debt-to-income (DTI) ratio compares your monthly debt payments to your monthly income. Lenders typically prefer a DTI below 40%. Pay down existing debts or increase your income to improve this ratio before applying.
Check for Errors on Your Credit Report
Before applying, review your credit reports from all three major bureaus for errors. Disputing and correcting inaccuracies could quickly boost your score and improve your loan options.
Provide Alternative Data
Some lenders like Upstart consider factors beyond credit scores. Be prepared to provide details about your education, employment history, and banking habits to strengthen your application.
Start with Pre-Qualification
Many lenders offer pre-qualification with a soft credit check that won’t impact your score. This allows you to see potential offers before submitting a formal application that triggers a hard inquiry.
Quick Credit-Building Tips Before Applying
- Make all existing debt payments on time
- Reduce credit card balances to below 30% of your limits
- Avoid applying for new credit in the months before your loan application
- Consider becoming an authorized user on someone else’s well-managed credit card
- Look into credit-builder products like secured credit cards or credit-builder loans
Red Flags and Predatory Lending Warning Signs
When you have bad credit, you’re unfortunately a prime target for predatory lenders. Here’s how to identify and avoid potentially harmful loan offers.
Common Predatory Lending Red Flags
- Guaranteed approval claims – Legitimate lenders always evaluate your creditworthiness
- “No credit check” loans – These typically come with extremely high interest rates
- Pressure to borrow more than you need – This increases the lender’s profit at your expense
- Unclear or hidden fees – Reputable lenders disclose all fees upfront
- Prepayment penalties – These fees discourage you from paying off your loan early
- Mandatory insurance or add-on products – These often provide little value while increasing costs
- Extremely short repayment terms – Payday loans often require full repayment within weeks
Safer Alternatives to Predatory Loans
If you’re struggling to qualify with the lenders we’ve recommended, consider these alternatives before turning to high-cost predatory options:
Credit Union Personal Loans
Federal credit unions cap their interest rates at 18% and may have more flexible lending criteria for members. Many offer small-dollar loans specifically designed as payday loan alternatives.
Peer-to-Peer Lending
Platforms like Prosper connect borrowers directly with individual investors. This model sometimes allows for more flexible approval criteria than traditional lenders.
Local Community Programs
Many communities offer emergency assistance programs or low-interest loans through nonprofit organizations and community development financial institutions.
Frequently Asked Questions About Bad Credit Personal Loans
How will applying for a personal loan affect my credit score?
When you formally apply for a loan, the lender will perform a hard credit inquiry, which typically causes a temporary drop of 5-10 points in your credit score. However, most lenders offer pre-qualification with a soft credit check that doesn’t affect your score. If approved, a personal loan can actually help improve your credit over time through on-time payments and adding to your credit mix.
What’s the minimum credit score needed for a personal loan?
While many traditional lenders require scores of 660 or higher, several lenders on our list accept much lower scores. Upstart considers applicants with scores as low as 300, while Universal Credit and Prosper accept scores starting at 560. Some lenders like Oportun and OneMain Financial don’t specify minimum credit score requirements and instead evaluate applications holistically.
How quickly can I get funds from a bad credit personal loan?
Funding times vary by lender, but many online lenders now offer expedited funding. Avant, Upstart, and Upgrade typically provide funds within one business day after approval. The entire process from application to funding usually takes 2-7 days, though it can be longer if additional documentation is required or if you’re applying with a traditional bank.
What alternatives should I consider before taking a bad credit loan?
Before committing to a high-interest personal loan, consider these alternatives:
- Negotiating with existing creditors for hardship programs
- Seeking assistance from nonprofit credit counseling agencies
- Exploring 0% APR balance transfer credit cards (if your credit qualifies)
- Borrowing from friends or family with a formal repayment agreement
- Investigating employer assistance programs or payroll advances
- Considering a home equity loan if you own property (though this puts your home at risk)
Can I get a personal loan with a bankruptcy on my record?
Yes, it’s possible to get a personal loan after bankruptcy, though options will be limited and rates will be high. Most lenders prefer that your bankruptcy be discharged for at least 1-2 years before applying. Lenders like Upgrade, OneMain Financial, and Avant have been known to work with borrowers who have a past bankruptcy, especially if you’ve demonstrated positive financial behavior since then.
Choosing the Best Personal Loan for Your Bad Credit Situation
Finding the right personal loan with bad credit requires careful consideration of your specific financial situation and needs. Here’s how to make the best choice:
- Assess your true needs: Determine exactly how much you need to borrow and for what purpose. Avoid borrowing more than necessary.
- Check your credit report and score: Know where you stand before applying so you can target appropriate lenders.
- Pre-qualify with multiple lenders: Compare offers without impacting your credit score to find the best rates and terms.
- Calculate the total cost: Look beyond the monthly payment to understand the total interest and fees over the life of the loan.
- Read the fine print: Pay attention to prepayment penalties, late fees, and other potential charges.
Remember that while getting a loan with bad credit is possible, it’s also an opportunity to build better financial habits. Make all payments on time, avoid taking on additional debt, and work on improving your credit score to access better loan options in the future.