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Best Personal Loans for Bad Credit

Home » Guides & Tips » Best Personal Loans for Bad Credit

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If your credit score needs work, getting a personal loan can be more challenging. However, some lenders are willing to work with borrowers with credit difficulties. We compared five lenders who have personal loan options for bad credit.  

What is a Personal Loan?

Personal Loans give you quick access to funds when you need financing for unsecured purchases or when you want to pay off and consolidate other debts.

Unsecured personal loans are not backed by collateral and usually have higher interest rates than secured loans like a mortgage or car loan.

How To Choose a Personal Loan

When looking for any type of personal loan, it’s important to consider all your options. It’s common to shop around and compare rates from multiple lenders. You’ll want to find a loan that:

  • Covers the amount you need
  • Has the lowest possible interest rate
  • Has a monthly payment you can afford

For bad credit personal loans, you’ll need to make sure the lender has options for people in your credit score bracket.

  • Best for Loans up to $50,000 – Above Lending
  • Best for Co-Borrowers – LendingClub
  • Best for Fast Funding – Upstart
  • Best for No Prepayment Fees – Above Lending
  • Best for Home Equity Options – Prosper
  • Best for Low Fixed-rates – Above Lending

Best for Loans up to $50,000 Above Lending

Above Lending is an excellent option for borrowers who need loans up to $50,000 and want to consolidate debt for a low fixed-rate.

Above Lending logo

Editor’s Pick

✓ Loans up to $50,000

✓ Low fixed-rates

✓ Fast funding

✓ No prepayment fees

✓ No fee to apply

Best for Co-Borrowers – LendingClub

LendingClub loans have limited term lengths between 36 months and 50 months. However, they do allow for a co-borrower to help you qualify for a lower rate.

Lending Club logo

✓ Loans up to $50,000

✓ Funded In one week

✓ Lower rates with a co-borrower

Best for Fast Funding – Upstart

Upstart is a lending platform that partners with banks and credit unions and provides consumer loans using non-traditional variables, like education and employment, to predict creditworthiness. They offer fast funding and can deposit funds within one business day after the borrower accepts a loan offer.

upstart logo

✓ Loans up to $50,000

✓ Soft Credit Check To Pre-Qualify

✓ Fast funding

Best for No Prepayment Fees- Above Lending

Above Lending allows borrowers to pay off loans faster with no prepayment fee or penalty. They offer loans up to $50,000 with a low fixed-rate and fast funding.

Above Lending logo

Editor’s Pick

✓ Loans up to $50,000

✓ Low fixed-rates

✓ Fast funding

✓ No prepayment fees

✓ No fee to apply

Best for Home Equity Options – Prosper

Prosper is a peer-to-peer lending platform. Most loans are funded within two weeks of application. In addition to unsecured personal and debt consolidation loans, Prosper has a home equity credit option for qualifying borrowers.

Prosper logo

✓ Loans up to $40,000

✓ Funding in 14 days

✓ Home equity credit options available

Best for Low Fixed-rates – Above Lending

Above Lending has options for borrowers with poor credit health. Above has program options that allow borrowers to access low-fixed rate loans up to $50,000, which is especially beneficial for borrowers who want to consolidate existing debt. 

Above Lending logo

Editor’s Pick

✓ Loans up to $50,000

✓ Low fixed-rates

✓ Fast funding

✓ No prepayment fees

✓ No fee to apply

What to Expect When You Apply For a Personal Loan

When you apply, the lender will ask you for personal information, including your current income. They’ll also do a hard pull on your credit score. This information helps the lender determine the maximum amount they will lend you as well as the interest rate they will charge. 

You may be asked to get a co-signer to help approve your loan or increase the amount you are allowed to borrow. 

Some lenders may also want to know what you plan to do with the money. If you plan to use the loan to consolidate existing debt, your lender may be able to help you pay off the debts directly before depositing any balance into your account. 

Be sure to ask about all your options if you plan to use your personal loan for debt consolidation

Fast Funding with Personal Loans

Once approved, your lender is required to walk you through your interest rates, origination fees, and details about the loan term to make sure you understand before you sign the loan agreement. 

When the loan agreement is signed, you will receive your funds using the method you choose. Direct deposit tends to be the fastest, with funds arriving in a few hours or days. 

Reasons to Get a Personal Loan for Bad Credit

Personal loans can help you cover unexpected expenses like:

  • Car repairs
  • Home repairs
  • Medical bills
  • Travel expenses
  • Debt Consolidation
  • And more…

Understanding Loan Rates

Personal loan offers provided by the lenders on this page will have a rate no higher than 35.99%, with repayment terms ranging from 36 to 72 months. The actual rate depends on credit score, loan term, and other factors. Please visit the lender’s website for a representative example of the total cost of the loan, including all applicable fees.

  1. Above Lending – Rates for personal loans provided by Above Lending range from 4.90% to 35.99% APR with repayment terms from 4 to 84 months.
  2. Upstart – Rates for personal loans provided by Upstart range from 5.40% to 35.99% APR with repayment terms from 36 to 60 months. 
  3. LendingClub – Rates for personal loans provided by LendingClub range from 6.34% to 35.89% APR with repayment terms from 36 to 60 months. 
  4. Prosper – Rates for personal loans provided by Prosper range from 7.95% to 35.99% APR with repayment terms from 36 to 60 months. 
  5. LightStream – Rates for personal loans provided by LightStream range from 4.49% to 20.49% APR with repayment terms from 36 to 72 months.

A representative loan example: For a $10,000 personal loan with a 36-month repayment term, 18.49% APR (including a 5% origination fee), you would receive $9,500, and your required monthly payments would be $346.65. Over the life of the loan, you would pay back a total of $12,479.52. The APR for your loan may be higher or lower than this amount. The actual rate depends on credit score, loan term, and other factors. Please visit the lender’s website for a representative example of the total cost of the loan, including all applicable fees.

i The Trusted Company Reviews Editorial Rating isn’t a simple average of all reviews. Our editorial team analyzes company reviews and considers consumer needs and program features like overall savings, customer service, monthly payments, program length, industry reputation, accreditations and more.

About Author

Dr. Ali
Dr. Ali

Anna Caldwell

Last Updated: November 5, 2023

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