Best Personal Loans for Bad Credit in 2026

Finding personal loans for bad credit is possible, even if your credit history isn't perfect. While borrowers with lower credit scores often face higher interest rates and stricter eligibility requirements, many banks, credit unions, and online lenders now offer bad credit personal loans with flexible repayment terms and fast funding.

The key is choosing the right lender rather than applying everywhere. Some lenders consider your income, employment stability, debt-to-income (DTI) ratio, and overall financial profile instead of relying solely on your credit score. Comparing personal loans with bad credit can help you find competitive APRs, lower fees, and loan amounts that match your needs.

In this guide, we've researched and compared the best personal loans for bad credit in 2026. You'll learn how these loans work, who qualifies, how to compare lenders, and what steps can improve your approval chances. Whether you need funds for debt consolidation, medical bills, home repairs, or unexpected expenses, this guide will help you make a more informed borrowing decision.

Quick Tip: Compare prequalified offers from at least three lenders before submitting a formal application. This allows you to compare estimated APRs, monthly payments, loan amounts, and repayment terms without affecting your credit score.

Best Personal Loans for Bad Credit at a Glance

Choosing the right lender involves more than finding the lowest interest rate. Compare loan amounts, APRs, repayment terms, funding speed, eligibility requirements, fees, and customer satisfaction before making a decision. The table below highlights some of the best lenders for borrowers with poor or fair credit.

When comparing lenders, pay attention to:

• Annual Percentage Rate (APR)

• Origination fees

• Late payment fees

• Loan amounts

• Repayment flexibility

• Minimum income requirements

• Funding speed

• Customer reviews

• Availability of soft credit prequalification

A lender with a slightly higher APR but no origination fee may cost less overall than a lender advertising a lower rate with additional fees. Always review the total borrowing cost before accepting an offer.

Our Top Picks for the Best Personal Loans for Bad Credit

Every borrower has different financial needs. Some prioritize the lowest possible APR, while others need same-day funding or more flexible qualification requirements. Rather than recommending one lender for everyone, we've selected options based on affordability, transparency, repayment flexibility, customer experience, and overall value.

We selected these lenders based on approval flexibility, APRs, fees, funding speed, customer satisfaction, and overall value for borrowers with bad credit.

Our evaluation considered several important factors, including:

• Competitive APRs and transparent pricing
• Loan amounts suitable for different borrowing needs
• Flexible repayment terms
• Fast approval and funding times
• Availability of soft-credit prequalification
• Customer satisfaction and lender reputation
• Fees, including origination and late payment charges
• Accessibility for borrowers with poor or fair credit histories

In the sections below, you'll find detailed reviews of each recommended lender, including who it's best for, key features, eligibility requirements, advantages, disadvantages, and important fees to consider before applying.

1. Upstart: Best Overall Personal Loan for Bad Credit

Why we chose Upstart

Upstart stands out because it looks beyond your credit score. Unlike many traditional lenders that rely heavily on a FICO Score cutoff, Upstart uses an AI-driven underwriting model that also evaluates your education, employment history, income, banking behavior, and other financial factors. This makes it one of the strongest options for borrowers with limited or imperfect credit histories.

Loan amounts range from $1,000 to $75,000, making Upstart suitable for everything from small emergency expenses to larger debt consolidation projects. Most approved borrowers receive a decision within minutes, and funds are often deposited as soon as the next business day.

Pros

• Accepts borrowers with limited or poor credit history

• Fast online application and approval process

• Loan amounts up to $75,000

• No prepayment penalties

• Next-business-day funding for many borrowers

• Soft credit check available during prequalification

Cons

• Origination fee may be as high as 12%

• Maximum APR can reach 35.99%

• Repayment terms limited to three or five years

Best for: Borrowers with bad credit looking for a lender that considers more than just a credit score.

2. Universal Credit: Best for Borrowers with Poor Credit

Universal Credit specializes in borrowers who may struggle to qualify with traditional banks. While its interest rates aren't the lowest in the market, the lender provides flexible qualification standards and tools that help borrowers improve their financial health over time.

Loan amounts range from $1,000 to $50,000, with repayment terms extending up to seven years. Many applicants receive funding within one business day after approval.

One feature that separates Universal Credit from several competitors is its financial education resources and optional credit-building support. Borrowers can also modify their payment date in many cases, which adds flexibility if their income schedule changes.

Pros

• Designed for borrowers with poor credit

• Loan amounts up to $50,000

• Repayment terms up to seven years

• Fast funding after approval

• Allows prequalification with a soft credit inquiry

Cons

• Charges an origination fee

• Higher APRs than prime-credit lenders

• Minimum credit score isn't publicly disclosed

Best for: Applicants with poor credit who want flexible repayment terms and a lender experienced with lower-credit borrowers.

3. Avant: Best for Fast Approval

Avant has built a strong reputation among borrowers with fair to bad credit because of its straightforward application process and quick funding timeline. Many applicants receive an instant lending decision, and approved loans are typically funded by the next business day.

Loan amounts range from $2,000 to $35,000, making Avant a practical option for medium-sized expenses such as medical bills, home repairs, or unexpected emergencies.

Compared with many online lenders, Avant's eligibility requirements are relatively accessible. While borrowers with stronger credit may qualify for lower interest rates elsewhere, those rebuilding their credit often find Avant easier to qualify for than many banks.

Pros

• Fast approval decisions

• Next-business-day funding

• Simple online application

• Accepts many borrowers with fair or bad credit

• Mobile app for managing loan payments

Cons

• Maximum loan amount is lower than some competitors

• Origination fees may apply

• Highest APR reaches 35.99%

Best for: Borrowers who need quick approval and funding without an overly complicated application process.

4. OneMain Financial: Best Secured Loan Option

Unlike most online lenders that only offer unsecured personal loans, OneMain Financial gives borrowers the option to secure a loan with a vehicle or other eligible collateral. This can improve approval odds for applicants with a limited credit history or previous financial setbacks.

Loan amounts range from $1,500 to $30,000, and borrowers can complete part of the application online or work with a local branch if they prefer in-person assistance. That combination of digital convenience and branch support makes OneMain different from lenders that operate exclusively online.

While OneMain doesn't publish a minimum credit score requirement, approval depends on several factors, including income, monthly expenses, employment stability, and existing debt. Because secured loans reduce the lender's risk, some borrowers may qualify for better terms than they would receive with an unsecured loan.

One drawback is the cost. Interest rates tend to be higher than those offered by credit unions or lenders serving prime-credit borrowers. Applicants should also review any state-specific fees before accepting an offer.

Pros

• Offers both secured and unsecured personal loans

• No published minimum credit score requirement

• Physical branch locations across much of the U.S.

• Same-day funding may be available in some cases

• Flexible underwriting beyond credit score alone

Cons

• Higher APRs than many competitors

• Loan amounts capped at $30,000

• Fees vary depending on state regulations

Bottom line: OneMain Financial is one of the strongest choices if you've been declined elsewhere or want to improve your approval chances by offering collateral.

5. LendingPoint: Best for Fast Funding

LendingPoint focuses on borrowers with fair to below-average credit who need funding quickly. Most approved applicants receive their money by the next business day, making it a practical option for emergency expenses, medical bills, vehicle repairs, or unexpected home maintenance.

Loan amounts range from $1,000 to $36,500, with repayment terms between two and six years. Instead of relying entirely on a credit score, LendingPoint reviews your overall financial picture, including employment, income, and recent credit behavior.

Compared with some competitors, LendingPoint's qualification process may be more accessible for borrowers who have experienced temporary financial difficulties but have since improved their income or payment history.

However, borrowers with excellent credit may qualify for lower interest rates elsewhere. LendingPoint is generally more competitive for accessibility than for offering the lowest APR.

Pros

• Next-business-day funding for many borrowers

• Considers factors beyond credit score

• Flexible loan amounts

• Simple online application process

• No prepayment penalty

Cons

• Origination fee may apply

• Not available in every state

• Maximum APR reaches 35.99%

Bottom line: LendingPoint is a good choice for borrowers who value fast funding and flexible qualification standards over securing the absolute lowest interest rate.

6. Upgrade: Best for Debt Consolidation

Upgrade is one of the most popular lenders for borrowers who want to consolidate high-interest credit card balances into a single fixed monthly payment. In many cases, Upgrade can send funds directly to your creditors, simplifying the debt consolidation process and reducing the risk of missing payments.

Borrowers can apply for loans ranging from $1,000 to $50,000, with repayment terms extending up to seven years. Upgrade also offers both unsecured and secured personal loans, giving applicants additional flexibility depending on their financial situation.

Compared with several lenders in this category, Upgrade provides a well-rounded combination of competitive loan amounts, flexible repayment options, and educational tools that help borrowers understand the total cost of borrowing before accepting an offer.

Keep in mind that Upgrade charges an origination fee, which should be factored into the overall borrowing cost. While its starting APR is competitive, the highest rates are similar to those of other bad credit lenders.

Pros

• Excellent option for debt consolidation.
• Direct payment to creditors available.
• Loan amounts up to $50,000.
• Secured and unsecured loan options.
• Repayment terms up to seven years.
• Soft-credit prequalification.

Cons

• Origination fee applies.
• Maximum APR can reach 35.99%.
• Not every applicant qualifies for the lowest advertised rates.

Bottom line: Upgrade is a strong fit for borrowers who want to simplify multiple debts into one predictable monthly payment while benefiting from flexible repayment terms and a streamlined online application process.

7. PenFed Credit Union: Best Low-Fee Credit Union Loan

If keeping borrowing costs low is your priority, PenFed Credit Union deserves serious consideration. Unlike many online lenders that charge origination fees of up to 10% or more, PenFed doesn't charge an origination fee, helping borrowers save money over the life of the loan.

PenFed offers personal loans ranging from $600 to $50,000, making it suitable for both small and large borrowing needs. Repayment terms extend from one to five years, and qualified members can often receive funding within one or two business days.

One advantage PenFed has over many bad credit lenders is its relatively low maximum APR. Borrowers with stronger financial profiles may qualify for significantly lower interest rates than those available through lenders like OneMain Financial or Universal Credit.

However, PenFed isn't specifically designed for applicants with poor credit. Borrowers with recent delinquencies, bankruptcies, or high debt-to-income ratios may find approval more challenging than with lenders that specialize in non-prime credit.

Pros

• No origination fee.
• Lower maximum APR than many competitors.
• Loan amounts up to $50,000.
• Small loans starting at $600.
• Flexible repayment terms.

Cons

• Membership required before funding.
• Better suited to borrowers with fair or improving credit.
• Approval standards may be stricter than some online lenders.

Bottom line: PenFed is an excellent option for borrowers who want to reduce fees and interest costs rather than simply maximize approval odds.

8. LendingClub: Best for Co-Borrowers

LendingClub is one of the few major online lenders that allows applicants to apply with a co-borrower. Adding another qualified borrower can strengthen your application, improve approval odds, and potentially reduce your interest rate if the co-borrower has a stronger credit profile.

Loan amounts range from $1,000 to $60,000, with repayment terms of two to six years. LendingClub is also widely used for debt consolidation because it can send loan proceeds directly to creditors if requested.

Compared with lenders that evaluate only one applicant, LendingClub provides more flexibility for households with multiple income sources. This makes it particularly useful for married couples or family members applying together.

The lender does charge an origination fee, and borrowers with weaker financial profiles may still receive higher APRs. Even so, the co-borrower feature can make LendingClub a more affordable option than applying individually with another lender.

Pros

• Accepts co-borrower applications.
• Loan amounts up to $60,000.
• Direct payment to creditors available.
• Soft-credit prequalification.
• No prepayment penalties.

Cons

• Origination fee applies.
• Maximum APR reaches 35.99%.
• Funding may take slightly longer than some competitors.

Bottom line: LendingClub stands out for borrowers who can strengthen their application by adding a co-borrower and want an efficient way to consolidate existing debt.

9. Best Egg: Best for Home Improvement and Large Purchases

Best Egg combines competitive starting APRs with a simple online application, making it a popular choice for borrowers financing planned expenses such as home improvements, major purchases, or large one-time bills.

Borrowers can request between $2,000 and $50,000, with repayment terms of three or five years. Approved applicants often receive funding within one to three business days.

Compared with several lenders targeting bad credit, Best Egg generally works best for applicants with fair or improving credit profiles rather than those with recent credit problems. Its starting interest rates are lower than many competitors, but borrowers with weaker credit may receive offers closer to the maximum APR.

Best Egg also provides secured loan options in some states, allowing eligible borrowers to use fixtures attached to their home as collateral. This feature isn't widely available among competing online lenders.

Pros

• Competitive starting APR.
• Loan amounts up to $50,000.
• Fast online approval process.
• Secured loan option in eligible states.
• No prepayment penalty.

Cons

• Higher origination fee for some borrowers.
• Best rates typically reserved for stronger applicants.
• Not available in every state.

Bottom line: Best Egg is a good fit for borrowers with fair credit who want competitive rates for planned expenses instead of emergency borrowing.

10. Achieve Personal Loans: Best for Large Debt Consolidation Loans

Achieve (formerly FreedomPlus) focuses primarily on borrowers looking to consolidate high-interest debt. If your goal is to replace multiple credit card balances with a single fixed monthly payment, Achieve offers one of the higher maximum loan amounts in this comparison.

Eligible borrowers can apply for $5,000 to $50,000, with repayment terms ranging from two to five years. Unlike lenders that mainly target emergency borrowing, Achieve is designed for larger financial goals, particularly debt consolidation.

One feature that distinguishes Achieve from several competitors is its emphasis on overall financial health rather than credit score alone. Income, existing debt, cash flow, and repayment ability all play an important role during underwriting. Borrowers who demonstrate stable income and responsible financial habits may qualify even if their credit profile isn't perfect.

Achieve isn't the best choice if you only need a small loan. Its minimum borrowing amount is higher than lenders such as PenFed, Upgrade, or Upstart.

Pros

• Excellent for consolidating multiple debts.
• Loan amounts up to $50,000.
• Competitive starting APR.
• Fast online application.
• Fixed monthly payments.

Cons

• Minimum loan starts at $5,000.
• Origination fee may apply.
• Better suited for larger borrowing needs than emergency loans.

Bottom line: If you're carrying high-interest credit card balances or multiple personal loans, Achieve offers one of the better consolidation-focused products available for borrowers with fair or below-average credit.

Which Personal Loan Is Right for You?

Not every lender is the best fit for every borrower. Use the table below to quickly identify which lender best matches your financial needs and borrowing goals.

Before applying, prequalify with multiple lenders whenever possible. Comparing APRs, fees, repayment terms, and monthly payments can help you choose the best personal loan for bad credit based on your financial situation rather than the first loan offer you receive.

What Is a Personal Loan for Bad Credit?

A personal loan for bad credit is an installment loan designed for borrowers who may not qualify for traditional bank financing because of their credit history. These loans provide a lump sum that is repaid through fixed monthly payments over an agreed repayment period.

Unlike payday loans or title loans, bad credit personal loans usually offer longer repayment terms, predictable monthly payments, and significantly larger borrowing limits. Depending on the lender, loan amounts can range from a few hundred dollars to as much as $75,000.

Although these loans are marketed toward borrowers with poor credit, approval isn't based solely on a credit score. Most reputable lenders also review several financial factors, including:

• Monthly income
• Employment stability
• Debt-to-income (DTI) ratio
• Existing loan obligations
• Payment history
• Recent bankruptcies or collections
• Overall ability to repay

This explains why two applicants with similar credit scores can receive very different loan offers. One borrower may qualify for a lower APR because of higher income and lower debt, while another may receive a smaller loan amount or a higher interest rate.

What Is Considered Bad Credit?

Although lenders use different underwriting models, the following FICO Score ranges are widely used as a general guideline:

Borrowers in the poor and lower fair credit ranges often pay higher APRs because lenders consider them higher-risk applicants. However, many online lenders now evaluate additional financial information instead of relying entirely on credit scores, making approval possible even after previous credit challenges.

Can You Get a Personal Loan with Bad Credit?

Yes. Having bad credit doesn't automatically prevent you from qualifying for a personal loan. Many lenders approve applicants every day with below-average credit, provided they demonstrate the ability to repay the loan.

The biggest difference is the quality of the loan offer, not necessarily whether you're approved.

For example:

• Borrowers with stronger income and lower debt may qualify for lower APRs even with less-than-perfect credit.
• Applicants with recent late payments or high credit utilization may still receive approval but at a higher interest rate.
• Borrowers with stable employment and several years of banking history often receive better offers than applicants with irregular income.

Online lenders such as Upstart, Upgrade, and LendingPoint typically use broader underwriting models than many traditional banks. They evaluate income, employment history, banking activity, and debt obligations alongside your credit profile.

Credit unions, including PenFed, may also offer competitive rates for qualified members, although approval standards can sometimes be stricter.

Before submitting a formal application, it's usually worth completing a soft-credit prequalification with several lenders. This allows you to compare estimated APRs, monthly payments, and loan amounts without affecting your credit score. Comparing multiple offers can save hundreds or even thousands of dollars over the life of a loan, particularly for borrowers with bad credit who may receive significantly different terms from different lenders.

How to Qualify for a Personal Loan with Bad Credit

Getting approved for personal loans for bad credit is about more than your credit score. Most lenders use a combination of financial factors to decide whether you qualify and what interest rate you'll receive. Improving just one or two areas of your financial profile can increase your approval chances and help you secure a better loan offer.

Improve Your Debt-to-Income (DTI) Ratio

Your debt-to-income (DTI) ratio compares your monthly debt payments with your gross monthly income. Even if you have bad credit, a lower DTI tells lenders you have enough income to handle another monthly payment.

For example, if you earn $5,000 per month and pay $1,500 toward existing debts, your DTI is 30%. Many online lenders prefer borrowers with a DTI below 40% to 45%, although requirements vary.

Before applying:

• Pay down high-interest credit card balances.
• Avoid taking on new debt.
• Increase your monthly income if possible.
• Delay large purchases financed through credit.

Compared with applicants carrying high revolving debt, borrowers with a healthier DTI often receive lower APRs and larger loan amounts.

Apply with Lenders That Offer Soft Credit Prequalification

One mistake many borrowers make is submitting full applications to several lenders at once. Every hard credit inquiry can temporarily affect your credit score.

Instead, look for lenders that offer soft-credit prequalification. This lets you compare estimated loan offers without impacting your credit report.

Most lenders featured in this guide, including Upstart, Upgrade, LendingClub, Universal Credit, and Avant, allow applicants to prequalify online within minutes.

Compare these factors before choosing a lender:

• Estimated APR
• Monthly payment
• Loan amount
• Repayment term
• Origination fee
• Total borrowing cost

Prequalifying with multiple lenders often reveals significant differences in pricing. Two lenders may approve the same borrower but offer interest rates that differ by several percentage points, resulting in hundreds or even thousands of dollars in savings over the life of the loan.

Consider a Secured Personal Loan

If you're struggling to qualify for an unsecured loan, a secured personal loan may improve your approval odds.

Secured loans require collateral, such as an eligible vehicle or savings account, which reduces the lender's risk. Because of this additional security, some lenders are willing to approve borrowers with weaker credit histories or offer more favorable interest rates.

For example:

• OneMain Financial offers both secured and unsecured personal loans.
• Upgrade provides secured loan options in eligible states.
• Some local banks and credit unions also offer secured installment loans backed by savings accounts or certificates of deposit.

The trade-off is important to understand. If you fail to repay a secured loan, the lender may have the legal right to repossess the pledged collateral.

A secured loan should generally be viewed as a way to reduce borrowing costs or improve approval odds, not as a solution for unaffordable debt.

How to Compare Personal Loans for Bad Credit

Not all personal loans for bad credit are created equal. While many borrowers focus on the advertised interest rate, the best loan is the one with the lowest overall borrowing cost and repayment terms that fit your budget. Before applying, compare these key factors.

APR (Annual Percentage Rate)

The APR reflects the total yearly cost of borrowing, including interest and certain fees. A loan with a lower interest rate isn't always the cheapest if it charges a high origination fee. Always compare the APR rather than the interest rate alone.

Loan Amount and Repayment Term

Borrow only what you need. Although some lenders offer loans up to $75,000, requesting a smaller loan may improve your approval chances and reduce total interest costs. Also compare repayment terms, as longer terms lower monthly payments but increase the total interest paid.

Fees

Review all fees before accepting an offer. Some lenders charge origination fees, late payment fees, or returned payment fees. For example, PenFed Credit Union doesn't charge an origination fee, while lenders such as Upgrade, LendingClub, Best Egg, and Universal Credit may deduct one from your loan proceeds.

Funding Speed and Lender Reputation

If you need money quickly, compare funding times. OneMain Financial may offer same-day funding in some cases, while Upstart, Avant, Upgrade, and LendingPoint typically fund approved loans by the next business day. Also consider customer reviews, repayment flexibility, and available hardship assistance before making your final decision.

Before You Apply for a Personal Loan with Bad Credit

Applying for personal loans for bad credit isn't just about getting approved. It's about finding a loan you can comfortably repay. Spending a few extra minutes comparing lenders and reviewing your finances can improve your approval chances while reducing your overall borrowing costs. Since every lender uses different underwriting criteria, two borrowers with similar credit profiles may receive very different loan offers, including APRs, loan amounts, and repayment terms.

Personal Loan Application Checklist

• Check your credit report for errors, outdated accounts, or incorrect payment history before applying. Review your credit reports from Experian, Equifax, and TransUnion to correct any inaccuracies that could affect your approval chances.
• Compare at least three lenders to evaluate APRs, loan amounts, repayment terms, funding speed, and eligibility requirements.
• Prequalify with multiple lenders using a soft credit check whenever available. This allows you to compare loan offers without affecting your credit score.
• Borrow only what you need to keep your monthly payments manageable and reduce the total interest paid over the life of the loan.
• Estimate your monthly payment using the lender's calculator to ensure it fits comfortably within your budget.
• Review all loan costs, including origination fees, late payment charges, prepayment policies, and any optional fees before accepting an offer.

Choosing the right bad credit personal loan is about more than finding the lowest advertised interest rate. Compare the total borrowing cost, lender reputation, repayment flexibility, and customer support before making a decision. Taking the time to compare offers can help you secure a loan that meets your financial needs without creating unnecessary debt.

Pros and Cons of Personal Loans for Bad Credit

Like any financial product, personal loans with bad credit offer advantages and disadvantages. Understanding both can help you decide whether borrowing is the right solution.

Pros

• Access financing even with poor credit.
• Fixed monthly payments simplify budgeting.
• Higher borrowing limits than payday loans.
• Can be used for debt consolidation, medical bills, home repairs, or emergencies.
• On-time payments may help strengthen your credit history over time.
• Most lenders don't restrict how you use the loan proceeds.

Cons

• Higher APRs than borrowers with excellent credit receive.
• Origination fees may reduce the amount you receive.
• Missing payments can further damage your credit score.
• Some lenders require collateral for better rates.
• Late payment fees and collection actions increase borrowing costs.
• Applying without prequalification may result in multiple hard credit inquiries.

For many borrowers, personal loans for bad credit are a practical financing option when used responsibly. The key is comparing multiple lenders, understanding the total cost of borrowing, and choosing a loan with affordable monthly payments rather than simply accepting the first approval offer.

Common Reasons Personal Loan Applications Get Rejected

If you're wondering why your personal loan application was denied, you're not alone. Lenders decline applications for several reasons, and a low credit score is only one of them. Many borrowers qualify for personal loans for bad credit, but approval depends on your overall financial profile rather than a single number.

Here are the most common reasons lenders reject loan applications.

High Debt-to-Income (DTI) Ratio

A high DTI ratio signals that a large portion of your income already goes toward debt payments. Even if you meet the lender's minimum credit requirements, excessive monthly obligations can reduce your approval chances.

Insufficient or Unstable Income

Most lenders want to see consistent income that supports the monthly loan payment. Frequent job changes, self-employment without documented income, or recent unemployment may affect your eligibility.

Recent Late Payments or Defaults

Lenders pay close attention to your recent repayment history. Multiple missed payments, charge-offs, collections, or loan defaults suggest a higher lending risk, even if your credit score has started improving.

Too Many Recent Credit Applications

Submitting several loan applications within a short period can result in multiple hard credit inquiries. This may indicate financial distress and reduce your chances of approval.

Errors on Your Credit Report

Incorrect account balances, outdated collection accounts, or reporting mistakes can lower your credit score. Reviewing your credit reports before applying helps identify errors that could affect your application.

Borrowing More Than You Can Afford

Requesting a loan amount that doesn't match your income or repayment capacity may lead to rejection. Applying for a realistic loan amount often improves approval odds.

Tip: If you're denied, don't immediately submit another application. Review the lender's adverse action notice, address the issue, and compare other lenders that specialize in bad credit personal loans before applying again.

Alternatives to Personal Loans for Bad Credit

A personal loan isn't always the best financing option. Depending on your financial situation, one of the following alternatives may offer lower costs or better approval odds.

Credit Union Loans

Credit unions are nonprofit financial institutions that often provide lower interest rates and fewer fees than many online lenders.

Although approval standards vary, credit unions typically consider your relationship with the institution, income, and overall financial history rather than relying only on your credit score.

Best for:

• Existing credit union members
• Borrowers looking for lower APRs
• Long-term borrowing

Secured Personal Loans

If you're having difficulty qualifying for an unsecured loan, a secured personal loan may increase your approval chances.

These loans require collateral, such as a vehicle, savings account, or certificate of deposit. Because the lender assumes less risk, secured loans may offer lower interest rates than unsecured bad credit personal loans.

Keep in mind that failing to repay a secured loan could result in losing the pledged asset.

Best for:

• Borrowers with poor credit
• Lower interest rates
• Larger loan amounts

Cash Advance Apps

Cash advance apps provide small advances against your upcoming paycheck without requiring a traditional credit check.

Most apps are designed for short-term cash flow gaps rather than large expenses. Loan amounts are generally much smaller than personal loans, making them more suitable for emergency purchases or unexpected bills.

Best for:

• Small emergency expenses
• Short-term borrowing
• Avoiding payday loans

Payday Alternative Loans (PALs)

Some federal credit unions offer Payday Alternative Loans (PALs) as a safer replacement for traditional payday loans.

PALs usually feature:

• Lower fees
• Regulated interest rates
• Longer repayment periods
• Smaller loan amounts

Compared with payday loans, PALs are generally a more affordable borrowing option for eligible credit union members.

Best for:

• Emergency borrowing
• Small-dollar loans
• Lower borrowing costs

Buy Now, Pay Later (BNPL)

Buy Now, Pay Later services allow consumers to split purchases into several smaller payments, often without interest if payments are made on time.

While BNPL can help with planned retail purchases, it's generally not a substitute for larger personal loans with bad credit because it doesn't provide cash for expenses such as debt consolidation or medical bills.

Missing BNPL payments may result in late fees and could affect your credit, depending on the provider.

Best for:

• Retail purchases

• Interest-free installment payments

• Short repayment periods

Quick Comparison

Choosing the right financing option depends on why you need the money. If you need a larger loan with predictable monthly payments, personal loans for bad credit remain one of the most flexible choices. For smaller expenses, alternatives like PALs or cash advance apps may reduce borrowing costs.

How We Chose the Best Personal Loans for Bad Credit

Our recommendations are based on a detailed comparison of lenders that actively serve borrowers with fair and poor credit. Instead of ranking lenders solely by interest rates, we evaluated the factors that matter most when comparing bad credit personal loans.

Our review considered:

• Loan amounts available
• APR ranges
• Repayment flexibility
• Funding speed
• Origination and late payment fees
• Minimum credit requirements
• Availability of soft-credit prequalification
• Customer reviews and complaint history
• Financial hardship assistance
• Overall transparency

We reviewed official lender disclosures, fee schedules, eligibility requirements, repayment options, and publicly available customer feedback before finalizing our recommendations.

We also compared how each lender approaches underwriting. Some lenders, such as Upstart and LendingPoint, evaluate additional factors like income and employment history rather than relying only on a credit score. Others, including PenFed Credit Union, focus on offering lower fees and competitive interest rates for qualified applicants.

The information in this guide is reviewed periodically to reflect changes in loan terms, eligibility requirements, and lender offerings. Because rates and approval criteria vary by applicant, we recommend prequalifying with multiple lenders before accepting any loan offer. Comparing several personal loans for bad credit can help you find the most affordable option based on your individual financial situation.

Final Verdict

The best personal loans for bad credit depend on your financial situation, borrowing needs, and ability to qualify. There isn't a single lender that's right for everyone, which is why comparing multiple offers is one of the smartest ways to reduce your borrowing costs.

If you're looking for the best overall personal loan for bad credit, Upstart stands out because it considers factors beyond your credit score and offers loan amounts up to $75,000. Borrowers with a poor credit history may find Universal Credit easier to qualify for, while Avant is a solid choice if fast approval and next-business-day funding are your priorities.

For debt consolidation, Upgrade and Achieve Personal Loans offer flexible repayment terms and higher loan amounts. If you prefer lower fees, PenFed Credit Union is worth considering because it doesn't charge an origination fee. Borrowers who need a secured loan may benefit from OneMain Financial, while LendingClub is one of the few lenders that allows co-borrower applications to improve approval odds.

Before accepting any loan offer, compare the APR, origination fees, repayment terms, monthly payment, and total borrowing cost, not just the advertised interest rate. Most reputable lenders allow you to prequalify with a soft credit check, making it easy to compare bad credit personal loans without affecting your credit score.

Choosing the right lender today can save you hundreds or even thousands of dollars over the life of your loan. Take time to compare offers, borrow only what you need, and select a repayment plan that comfortably fits your monthly budget.