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Best Bad Credit Loans of December 2023

Upgrade, Patelco, and Achieve are some of our top picks for loans with bad credit

We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more.

Although many traditional lenders offer loans only to those with good to excellent credit, there are lenders that specialize in bad credit loans. To find the best loans for bad credit, we researched more than 70 lenders and evaluated them in four key areas: Costs and Fees (29.25%), Loan Terms (22.25%), Borrowing Requirements (28.50%), and Additional Features (20%). Some of the primary factors considered included what providers offered the lowest interest rates, fewest fees, highest loan amounts, and most flexible repayment terms. Currently, the best loans for bad credit are provided by Upgrade.

If youre not seeing anything in the results that are a good fit for your needs, consider warranties from these companies:
Company APR Credit Score est. Loan Amount More Details
Best Overall
APR With Autopay Discount
8.49% - 35.99%
Recommended Minimum Credit Score
This lender does not disclose its minimum credit score requirements.
Loan Amount
$1,000 - $50,000
See Details Check Rates
Best for Low Minimum Credit Requirement
APR Range
6.40% - 35.99%
Recommended Minimum Credit Score
This lender does not disclose its minimum credit score requirements.
Loan Amount
$1,000 - $50,000
See Details Check Rates
Best for Debt Consolidation
APR Range
8.99% - 35.99%
Recommended Minimum Credit Score
This lender does not disclose its minimum credit score requirements.
Loan Amount
$5,000 - $50,000
See Details Check Rates
Best for Repayment Terms
APR Range
7.99% - 35.99%
Recommended Minimum Credit Score
This lender does not disclose its minimum credit score requirements.
Loan Amount
$2,000 - $36,500
See Details Check Rates
Best With a Co-Signer
Patelco Credit Union
APR Range
8.95% - 17.90%
Recommended Minimum Credit Score
This lender does not disclose its minimum credit score requirements.
Loan Amount
$300 - $100,000
See Details Check Rates
Best for Fast Funding
TD Bank
APR Range
8.99% - 23.99%
Recommended Minimum Credit Score
This lender does not disclose its minimum credit score requirements.
Loan Amount
$2,000 - $50,000
See Details Check Rates
Best for Refinancing
First Tech Federal Credit Union
APR Range
8.99% - 18.00%
Recommended Minimum Credit Score
This lender does not disclose its minimum credit score requirements.
Loan Amount
$500 - $50,000
See Details Check Rates
Why Trust Us
Lenders reviewed
Loan features considered
Data points analyzed
Primary data sources used
Investopedia collected key data points from several lenders to identify the most important factors to borrowers. We used this data to review each lender for fees, accessibility, repayment terms, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right borrowing decision for their needs.

Is your credit not too bad, or are you planning to apply with a co-signer? See our picks for the best overall personal loans or the best personal loans with a co-signer.

In the News

The average personal loan interest rate fell to 21.68% this week, losing 8 basis points from the week prior. Personal loan rates started to rise back in 2022 as the Federal Reserve began instituting a series of interest rate hikes to combat decades-high inflation. Following its Sept. 20 meeting, the Fed announced it would be holding rates steady.

Compare Personal Loan Rates with Our Partners at

Best Overall : Upgrade

Investopedia's Rating

  • APR Range: 8.49% - 35.99%
  • Loan Amount: $1,000 - $50,000
  • Loan Terms: 24 months - 84 months
Why We Chose It

Overall, Upgrade has a strong reputation for being a fair lender with a lower minimum credit score, a high borrowing limit, and longer loan terms than some other lenders. While the top end of the interest rate range gets high, starting rates are competitive. This makes Upgrade loans both accessible to those with bad credit and attractive to more creditworthy borrowers. Upgrade loans do come with a high origination fee, however.

Upgrade’s appeal starts with the ability to get a rate quote without a hard credit check and funding within one day of approval. Additionally, Upgrade may lower your loan rate if you set up autopay, use all or part of the loan to pay off existing debt, or use your car as collateral for a secured loan.

Upgrade’s Credit Health tool lets you monitor your credit, get tips on improving your credit score, and receive fraud alerts. This feature is especially helpful if you have poor credit scores as you work to better your credit and regain control of your finances.

Originally founded in Aug. 2016, Upgrade is headquartered in San Francisco, California, and has offices in Phoenix, Arizona; Atlanta, Georgia; Orange County, California; and Montreal, Quebec.

While securing a loan with your car or other property can improve your approval odds and help you get a lower rate, you’re at risk of losing that property if you fall behind on your payments.

Pros & Cons
  • Opportunities for APR discounts

  • Secured loans and joint applicants make loans more accessible

  • Quick loan disbursement

  • Loans have an origination fee

  • Not a direct lender

  • You must be at least 18 years old (19 years old in Alabama and certain other states).
  • You must have a verifiable bank account and valid email address.
  • You must be a U.S. citizen or permanent resident, or living in the U.S. on a valid visa.
  • You must have a credit score of 620 or higher (or have a creditworthy person to serve as a joint applicant).

Best for Low Minimum Credit Requirement : Upstart

Investopedia's Rating

  • APR Range: 6.40% - 35.99%
  • Loan Amount: $1,000 - $50,000
  • Loan Terms: 36 months - 60 months
Why We Chose It

If you have a credit score that’s in the “poor” range—between 300 and 579—finding a loan can be hard. Finding a loan with an APR that’s not in the high double or triple digits can be even harder.?

That’s where Upstart comes in. It has one of the lowest minimum credit scores of any lender on our list; its minimum required score is 300, which is the lowest possible score you can have. You can borrow up to $50,000, and, if approved, your loan funds can be disbursed in as little as one day.

Even if you have no credit history at all, you can still be eligible for a loan if you are enrolled in or graduated from a degree program.

Originally founded in 2012, Upstart is headquartered in San Mateo, California, and has offices in Columbus, Ohio, and Austin, Texas.

Pros & Cons
  • Low minimum credit score

  • Fast funding

  • Good loan amount flexibility

  • High origination fee

  • High APRs

  • Fewer loan term options than others

  • You must have a credit score of 300 or higher.
  • You must be 18 years old.
  • You must have a verifiable source of income, Social Security number, a U.S. address, and a valid email address.
  • You must have a personal banking account with a U.S. financial institution that has a routing transit number.
  • You must meet the minimum debt-to-income requirement of 45% (in Connecticut, Maryland, New York, or Vermont) or 50% (in all other states).
  • There should be no bankruptcies within the last 12 months, no current delinquencies, and fewer than six inquiries on your credit report within the last six months.

Best for Debt Consolidation : Achieve

Investopedia's Rating

  • APR Range: 8.99% - 35.99%
  • Loan Amount: $5,000 - $50,000
  • Loan Terms: 24 Months - 60 Months
Why We Chose It

If you’re looking to consolidate debt with a personal loan, it’s always wise to go with a lender that pays your creditors directly—and that is the case with Achieve. In fact, if you take advantage of that option, you’ll get a discount on your loan interest for doing so.

Achieve is available to borrowers in 40 states and the District of Columbia, and it requires a 620 minimum credit score, which is lower than some lenders. In addition to the loan discount when you pay creditors directly, you can also get a discounted rate by adding a co-borrower or showing proof of retirement savings.

Originally founded in 2002, Achieve is headquartered in Scottsdale, Arizona.

Pros & Cons
  • Pre-qualification is available

  • Loan discounts are available

  • Can apply with co-borrower

  • Funds can take up to 72 hours to arrive after approval

  • Origination fee

  • Minimum borrowing amount may be high for some

  • You’ll need a minimum credit score of 620.
  • Minimum income is not disclosed.
  • You must have a Social Security number.
  • You will need to share your proof of income, proof of identity, and employment status.

Best for Repayment Terms : LendingPoint

Investopedia's Rating

  • APR Range: 7.99% - 35.99%
  • Loan Amount: $2,000 - $36,500
  • Loan Terms: 24 months - 72 months
Why We Chose It

Loans for borrowers with bad credit tend to have limited repayment term options; with many, the maximum is 60 months or less. With LendingPoint, you can choose up to 72 months to repay the loan. And while some lenders with longer terms are credit unions with limited memberships, LendingPoint is available to the general public.?

With a longer term, you’ll pay more in interest over time, but you’ll get a more affordable monthly payment. When money is tight and you have an emergency expense, being able to spread out the cost over a longer period to get smaller payments can be worth the tradeoff.

Unlike some of the other lenders on our list, LendingPoint doesn’t allow co-signers or joint applications, but it has relatively low requirements for income and credit, and it disburses funds as soon as the next day after approval.

Originally founded in 2014, LendingPoint is headquartered in Kennesaw, Georgia.

Before applying for a loan, check your credit report to make sure all of the information on it is correct; otherwise, it could affect your eligibility for a loan. Learn how to check your annual credit reports for free.

Pros & Cons
  • Funds disbursed as soon as next day

  • Long loan terms available

  • Allows pre-qualification

  • Not available in all states

  • Origination fees as high as 10%

  • Does not allow co-signers or joint applications

  • You must be 18 years or older.
  • You must live in an eligible state; LendingPoint doesn’t offer loans in Nevada or West Virginia.
  • You must have a valid Social Security number as well as a U.S federal, state, or local government-issued photo ID.
  • You must have a verifiable personal banking account in your name.
  • You must earn at least $35,000 per year.
  • You must have a credit score of 660 or higher.

Best With a Co-Signer : Patelco Credit Union

Investopedia's Rating

  • APR Range: 8.95% - 17.90%
  • Loan Amount: $300 - $100,000
  • Loan Terms: 6 months - 84 months
Why We Chose It

Patelco Credit Union offers a number of personal loan products to anyone who becomes a member. Membership eligibility is open to all, even though branches are concentrated in California. Between the option of using a co-signer and the availability of secured loans, Patelco provides access to funding for those who might not have the best credit.

We like that the APR range is competitive and you have a wider loan amount range than most lenders offer.

Another factor that sets Patelco apart is its LevelUp program, which rewards consistent, on-time payments. Each year that you pay on time (if you qualify for the program), your rate will go down by 0.50%, up to a 1.5% maximum.

Originally founded in 1936, Patelco has 37 offices across Northern California.

Pros & Cons
  • High maximum loan amount

  • Pre-qualification is available

  • Rates decrease with good payment behavior

  • No origination fees

  • Must become a member of Patelco

  • Branches only in California

  • No loan discounts available

  • No direct creditor pay

  • You must become a member of Patelco, which requires a $1 minimum opening deposit in a savings account, plus a credit card or external bank account to fund your new account (if opened online). If you don’t meet geographical or employer eligibility, you can become a member of the Financial Fitness Association.
  • You must have a Social Security number (or other government-issued document showing your Tax Identification Number), in addition to a driver’s license or government ID.
  • You must have a current home address.
  • You must have a 640 minimum credit score (or have a creditworthy person to serve as a joint applicant).

Best for Fast Funding : TD Bank

Investopedia's Rating

  • APR Range: 8.99% - 23.99%
  • Loan Amount: $2,000 - $50,000
  • Loan Terms: 36 months - 60 months
Why We Chose It

If you want more of a traditional banking experience and live in a state where TD Bank operates, their personal loan (called the Fit Loan) has some appeal. First and foremost, loan approval is quick and in most cases, you can receive your loan within one business day.

The APR range is fairly competitive compared with similar lenders, and you can borrow up to $50,000. Plus, there are no origination fees. The main downside is that TD Bank loans are only available in certain geographic areas.

Originally founded in 1852 as Portland Savings Bank, TD Bank is headquartered in Cherry Hill, New Jersey, and has over 1,100 branches across 15 states and the District of Columbia.

Pros & Cons
  • No origination fees

  • Funds arrive within one business day after approval

  • Rate quote with no hard credit check

  • Only available in select states

  • No APR discount programs

  • No joint applications

  • You must be a resident of Conn., D.C., Del., Fla., Mass., Maine, Md., N.C., N.H., N.J., N.Y., Pa., R.I., S.C., Va., or Vt.
  • Minimum income is not disclosed.
  • The minimum credit score is not disclosed online, but our research found it to be 300.

Best for Refinancing : First Tech Federal Credit Union

Investopedia's Rating

  • APR Range: 8.99% - 18.00%
  • Loan Amount: $500 - $50,000
  • Loan Terms: 24 months - 84 months
Why We Chose It

First Tech Federal Credit Union lets you refinance existing personal loans as long as you can qualify. This is helpful if you think you can qualify for a more favorable interest rate or if you wish to extend your repayment term to lower your monthly bill.

We also like that First Tech FCU seems flexible when it comes to working with borrowers in all credit ranges, though they do not disclose specific minimum qualifications. There’s also the option to defer your first payment for 45 days, which can buy you a little extra time to get your finances in order.

Originally founded in 1952, First Tech FCU has 37 branches across Calif., Colo., Ga., Idaho, Mass., Ore., Texas, and Wash.

Pros & Cons
  • Strong customer reviews

  • No origination fee

  • Loan payment protection is available

  • Loan eligibility details are not disclosed

  • No loan discounts are available

  • Must join the credit union to apply for loan

  • You must be a First Tech FCU member, but anyone can join. To be eligible, you must have a family member who's a member; be employed by a partner company or the State of Oregon; live or work in Lane County, Oregon; or belong to the Computer History Museum or the Financial Fitness Association (for as little as $8).
  • You must share your Social Security number, U.S. driver’s license or state-issued identification, and contact information.
  • The minimum credit score is not disclosed online, but our research found it to be 660.
  • The minimum income is not disclosed.

Compare the Best Bad Credit Loans: Compare Rates for December 2023

Best For
APR Range
Average Origination Fee
Late Fee
Time To Receive Loan
Loan Amount
Latest Repayment
Reset All
Upgrade Best Overall 8.49% - 35.99% 1.85%–9.99% $10.00 1 day $1,000 - $50,000 84 months Check Rates
Hide, not for me
Upstart Best for Low Minimum Credit Requirement 6.40% - 35.99% 0.00%–12.00% 5% of the late payment amount or $15, whichever is greater 1 days $1,000 - $50,000 60 months Check Rates
Hide, not for me
Achieve Best for Debt Consolidation 8.99% - 35.99% 1.99% - 6.99% None 1 days $5,000 - $50,000 60 Months Check Rates
Hide, not for me
LendingPoint Best for Repayment Terms 7.99% - 35.99% 0.00% - 10.00% $0.00 - $30.00 0 day $2,000 - $36,500 72 months Check Rates
Hide, not for me
Patelco Credit Union Best With a Co-Signer 8.95% - 17.90% 0.00% 3% of loan payment or $5 whichever is higher 0 days $300 - $100,000 84 months Check Rates
Hide, not for me
TD Bank Best for Fast Funding 8.99% - 23.99% 0.00% 5.00% - $10.00 1 day $2,000 - $50,000 60 months Check Rates
Hide, not for me
First Tech Federal Credit Union Best for Refinancing 8.99% - 18.00% 0.00% $15.00 to $25.00 0 days $500 - $50,000 84 months Check Rates
Hide, not for me
*APR ranges for some companies include a discount for automatic payments or existing bank customers.

The Bottom Line

When researching the best loans for bad credit, we found Upgrade’s personal loans to be the best overall thanks to their accessibility, manageable interest rates, and opportunities for rate discounts. Other standouts on the list are Achieve if you’re looking to consolidate debt by paying creditors directly, or Upstart if your credit has hit rock bottom. If you want to avoid an origination fee, then consider joining First Tech Federal Credit Union or Patelco Credit Union to apply for one of their loans.

What Are Loans for Bad Credit?

Bad credit loans are loans for individuals with low credit scores, usually 579 or less. Although there are many types, the most common are unsecured personal loans. There’s no collateral, you’ll have a fixed interest rate and fixed monthly payments, and, like other loans, these will show up on your credit reports and affect your credit score.

Unsecured personal loans for bad credit are just like any other unsecured personal loan, and they can be an invaluable lifeline when facing unexpected expenses. However, they typically come with more fees and higher APRs than traditional loans extended to people with better credit.

What Makes Up a Bad Credit Score?

While there are a number of different credit-scoring models, one of the most commonly used being the FICO credit scoring system. Having "bad credit" typically means being in the "fair" or "poor" categories.

FICO Credit Score Ranges
Rating Score Range
Excellent 800–850
Very Good 740–799?
Good 670–739?
Fair 580–669?
Poor 300–579?
No Credit Not enough data to score

Your FICO score considers both positive and negative information listed in your credit report, which is grouped into the following five weighted categories:

Payment History (35%)

The Payment History category shows whether or not you've paid your past credit accounts on time. Payment History has more weight than any individual factor on your FICO score due to its importance to creditors, as this information allows lenders to better assess how much of a credit risk a prospective borrower represents.

Amounts Owed (30%)

As the name suggests, the Amounts Owed category shows how much debt you carry in total. Fortunately, having extant debt doesn't inherently indicate that you're a high-risk borrower to potential lenders. That said, if the information included in your Amounts Owed category shows that you're using a lot of your available credit, that could negatively impact your FICO score.

Length of Credit History (15%)

If you have a long credit history, that will always be good for your FICO score. According to myFICO, the Length of Credit History category considers the following pieces of information:

  • How long your credit accounts have been established, including the age of your oldest account, the age of your newest account, and the average age of all your accounts
  • How long specific credit accounts have been established
  • How long it has been since you used certain accounts

Credit Mix (10%)

The Credit Mix category represents the different kinds of accounts that make up your credit report, such as credit cards, mortgages, student loans, etc. As such, having a healthy credit mix in conjunction with a good payment history shows how well you're able to handle several different loans and lines of credit.

New Credit (10%)

The New Credit category is perhaps the most straightforward. Having multiple new credit accounts noted on your credit report within a short time period represents a greater risk for lenders, especially if you also lack a lengthy credit history.

Do You Qualify for a Bad Credit Loan?

To qualify for a personal loan with bad credit, you’ll likely need to meet certain criteria. Some of the most important factors are:

  • Your current credit history shows your problems are resolved: Lenders are more willing to overlook a bad credit score if your current credit history shows you’ve fixed the problems. This usually means that you don’t have any currently delinquent debt, any judgments are paid (e.g., tax liens), and bankruptcies are resolved. The goal is to ensure your old issues won’t prohibit you from repaying the new loan.
  • You have enough income to comfortably repay the debt: Before you can get a new loan, most lenders will want to make sure you have enough income to repay it. They’ll determine this by looking at your debt-to-income ratio. It’s also a good idea to review your budget to see if you can comfortably make the monthly payment before you proceed.
  • Loan funds will help improve your overall financial situation: The other thing that lenders consider is whether the loan may help improve your credit. For example, getting an affordable loan to consolidate existing debt into a single fixed-rate loan with a lower interest rate could improve your credit and help you pay off your balance faster. Plus, you’ll save money on interest charges.

"If you’re a borrower with a poor or bad credit score, you probably already know that you aren’t going to get a loan with the best rate or lowest origination fee. But you should still take the time to pre-qualify and compare rates, fees, and other terms. Most of the lenders we evaluated make it easy to pre-qualify and compare, and borrowers should always get a few offers in hand before deciding." - Lars Peterson, Senior Editor, Investopedia Financial Products and Services

Types of Bad Credit Loans

The most common types of bad credit loans aren't all that different from the loan options available for borrowers with good credit, which are listed below:

How to Choose the Best Loan for Bad Credit

How to Compare Loans for Bad Credit

When shopping for a personal loan for bad credit, these are the most important things to consider when comparing lenders:

  • APR range: Loans come at a cost, which includes the interest rate and any fees, like origination fees. The yearly cost of a loan is reflected in its annual percentage rate (APR). This means it’s typically more important to evaluate the APR than the interest rate or origination fee when comparing personal loan lenders. A personal loan calculator can help you determine what you can and can't afford.
  • Loan amounts: Make sure the lender you choose offers a loan amount that’s big or small enough for your needs. Some lenders only offer loans of $5,000 or more, which could be a problem if you only need $500. In contrast, if you have a lot of debt to consolidate, you may need a lender that offers bigger loans.
  • Repayment term length: In addition to the APR, the next biggest factor affecting the size of your loan payment is the repayment term. You’ll have the lowest overall borrowing costs if you choose the shortest possible repayment term since you’ll pay less interest over the life of the loan. However, this results in a larger monthly payment. Be sure to select a lender offering a repayment term that works with your budget and needs.
  • Ease of application: Many lenders have an online application process that takes mere minutes to complete and lets you know if you pre-qualify without hurting your credit.
  • Funding speed: If you want to get your money fast, look for a lender with next-day funding (some even offer same-day funding). But take note that funding times aren’t guaranteed, and will depend in part on your own bank.
  • Lender’s reputation: Make sure the lender you choose has a good reputation. Check consumer review sites for customer feedback, and look at government sources like the Consumer Financial Protection Bureau’s Consumer Complaint Database. Doing your due diligence will help you choose a reputable lender. 

Loan Cost the Most Important Factor for Most Borrowers

In Investopedia's 2023 Personal Loan Borrower Survey, we asked respondents to rank loan features on a scale from most important to least important. Almost half of borrowers (48%) ranked the cost of the loan as the most important factor. In a similar survey we conducted in 2022, 39% of borrowers also ranked loan cost as the most important factor.

How to Apply for a Bad Credit Loan

Applying for a personal loan with bad credit is similar to what’s required for any other type of loan, and it's a fairly simple process.

  1. The first step is to review your credit score and credit reports to identify any mistakes or past debt that you can request corrections for.
  2. Identify which lender you want to work with by comparing several bad credit loans. Most lenders will offer to perform a soft credit check, which doesn't affect your credit score, to see if you pre-qualify for a loan.
  3. You'll need to fill out an application. You might be required to provide documentation like a driver's license or other government-issued ID, proof of address, or financial details, potentially including your income or monthly housing payment. You might also need to set up an online account, depending on which lender you choose. Consider adding a co-signer or joint applicant (if your lender allows you to do so) to improve your chances of qualifying and potentially secure a better interest rate.
  4. After your application is approved, you'll receive the terms and conditions of the loan. Make sure you review those carefully so you know exactly what's required, including monthly payments, what the loan can and can't be used for, and your interest rate.
  5. Once all of that is complete, accept the terms and receive your loan funding.
Average Personal Loan Rates by Credit Score
Credit Tier Average APR This Week
Excellent 20.29%
Good 22.60%
Fair 25.08%
Poor 29.33%
All Tiers 21.13%

Alternatives to Bad Credit Loans

Some alternatives to personal loans for bad credit worth considering are:

  • Payday Alternative Loans (PALs): You may be able to find a PAL from a credit union; PALs come in amounts of $200 to $1,000 and have a maximum APR of 28%.
  • Secured loans: Secured loans require collateral, like a vehicle, deposit, or the equity in your home (in the case of a home equity line of credit (HELOC) or a home equity loan).
  • Buy now, pay later: If you're making an eligible purchase, you may be able to use a buy now, pay later service to stretch out the payments over several months.
  • Credit cards: Credit cards can help you pay for things over time, especially if you have a promotional 0% interest rate. Credit card cash advances are not recommended outside of emergencies because they tend to come with higher interest rates.
  • Cash advance apps: Cash advance apps may be worth exploring, but carefully check the fees and be sure to have a firm repayment plan in place.
  • Nonprofit aid: Look for local groups that offer aid to people who need to borrow money; there are also federal programs like Temporary Assistance for Needy Families.

Pros and Cons of Bad Credit Loans


  • Easier to qualify for: The primary benefit of bad credit loans is that applicants with fair or poor credit have a better chance of being approved than they would with a regular personal loan. Bad credit lenders typically have less strict credit score requirements compared to many traditional lenders, though they may consider alternative factors to gauge a borrower's creditworthiness.
  • Can help rebuild your credit score: Taking out a new loan, whether for bad credit or not, will require a credit check. This results in a hard inquiry being recorded on your credit report, which will temporarily decrease your credit score. However, acquiring a new loan can improve your credit mix (assuming you don't have several extant loans), and making on-time payments will establish a positive payment history, which are both things that can improve your credit score in the long run.
  • Potentially a better option than other lending products: While bad credit loans have higher interest rates when compared to traditional loans, they aren't inherently the worst lending option in that regard. Bad credit loans may have lower interest rates than some credit cards, and they almost certainly will have better interest rate terms than a payday loan.


  • High interest rates, fees, and penalties: To lenders, borrowers with fair or poor credit scores represent a not-insignificant credit risk. In order to compensate, bad credit lenders charge higher interest rates than you'll find on most traditional loans. Additionally, bad credit loans tend to come with a litany of fees as well as penalties that usually require a clear understanding of the loan terms to avoid, both of which can further increase the actual cost of the loan.
  • Greater risk of predatory lending: Not all bad credit lenders are legitimate, and borrowers who are in desperate need of funding are particularly vulnerable to predatory lending practices. Levying excessive and hidden fees, charging a substantial balloon payment at the end of a loan's term, and steering borrowers toward more expensive loans are just a few forms of predatory lending that individuals with fair or poor credit need to watch out for.

How Bad Credit Personal Loan Fees Work

When it comes to bad credit personal loans, there are four main types of fees that prospective borrowers ought to be prepared for.

  • Origination fee: An origination fee is one that's charged upfront by a lender as compensation for processing a personal loan application. Origination fees are typically levied as a percentage of the loan balance and can vary from 1% to 10%, depending on the lender. This fee is most often deducted from the loan amount before funds are disbursed.
  • Application fee: Similar to origination fees, an application fee is charged upfront when a borrower applies for a new personal loan to cover processing and documenting costs, even if the application is ultimately denied, and is deducted from the loan balance. The amount of a loan application fee (and whether one is even levied at all) will vary by lender.
  • Late payment fee: Perhaps unsurprisingly, lenders will impose a late payment fee when you fail to make an on-time loan payment. The exact amount will depend on the terms of the loan and whether the borrower has made a late payment before; $25–$50 or 3%–5% of the monthly payment amount are commonly cited estimates.
  • Prepayment penalty: Unfortunately, depending on the terms of a borrower's loan, there's also a risk of being punished when paying down or paying off installment loans too quickly. Lenders may charge prepayment penalties to compensate for the loss of interest income they would've otherwise collected.

How to Spot Personal Loan Scams

There are a myriad of personal loan scams out there, and it can become even harder to spot them when looking at loan products for bad credit. Below are a list of questions a potential borrower should be asking themselves when considering this type of funding:

  • Is a lender using vague advertising tactics? Are they promising guaranteed funding without approval?
  • Is the lender registered in your state, and do they have a physical address?
  • Is the lender's website unsecured?
  • Is the lender is requiring the fees be paid upfront, typically requesting payment either via services like Venmo, Zelle, CashApp, or PayPal or in cryptocurrency?
  • Is the lender listed on the Better Business Bureau, and if so, are other borrowers reporting being scammed?

If you suspect you've been the victim of a personal loan scam, contact your local police department and your state Attorney General immediately. Additionally, if the fake lender is located in another country, you should reach out to the Federal Trade Commission and the Federal Bureau of Investigation.

Learn More About Loans for Bad Credit

Frequently Asked Questions

  • Where Can I Get a Personal Loan With Bad Credit?

    Direct lenders, local lenders, and online lenders are three potential sources that offer personal loans for bad credit. Just be aware that you'll likely pay a higher interest rate than if you had good credit. Digital lending networks allow you to compare online personal loans for bad credit from multiple lenders with one loan application, while direct lenders are the traditional banks and credit unions managing the loans. A local credit union or bank where you already do business might be willing to work with you based on that relationship, even if you have bad credit.

  • Is It Easier to Get a Loan With Bad Credit or No Credit?

    Broadly speaking, it's better to have no credit than a bad credit score. Having a bad credit score indicates to lenders that a borrower has a history of not paying their bills on time and/or has a low debt-to-income (DTI) ratio, which makes them a credit risk. This will make it harder to qualify for a personal loan; even those they can secure will likely come with exorbitantly high interest rates.

    Meanwhile, having no credit score simply means a borrower has no credit history. While this still makes them a credit risk to most lenders, which can result in failing to secure a traditional personal loan, there are plenty of products available that first-time borrowers should have an easier time qualifying for (i.e., student loans, credit cards, etc.). Additionally, while a borrower with bad credit would have to work hard to improve their credit score, someone without a credit history simply needs to show they can use credit responsibly to quickly acquire a good score.

  • What Causes a Bad Credit Score?

    The two biggest factors that can cause you to have a bad credit score are your payment history and the amount you owe. Missing even one payment can hurt your score, with the damage increasing exponentially the longer the payment is delinquent. Meanwhile, having a high credit utilization ratio can make you seem like a lending risk, which is also reflected in a reduced credit score. Other factors that can negatively impact your credit score include having a shorter credit history, not having a varied credit mix, and applying for a lot of new credit within a short time frame.

  • How to Get a Loan With Bad Credit and no Co-Signer?

    Having bad credit can limit the number of companies willing to lend to you, and not having anyone able to act as a co-signer can further limit your options. Fortunately, there are lenders that will still work with borrowers who find themselves in this situation. Upstart and LendingPoint, for instance, are two of the best bad credit lenders currently available, and neither company allows prospective borrowers to apply with a co-signer. While other bad credit lenders will permit borrowers to apply with a co-signer, they aren't a requirement in order to qualify for a loan, as these lenders still have fairly low credit score requirements.

  • What Is the Lowest Credit Score Required to Borrow?

    Each personal lender has different requirements when it comes to the minimum credit score they will accept. The lowest possible credit score is 300, and two of the best bad credit personal loan companies, Upgrade and TD Bank, will lend to prospective borrowers who have this score. However, even if you can get a personal loan with a score this low, it's still a good idea to try and improve your credit score before applying for a personal loan, as having a higher score will typically result in you securing a better interest rate.

  • Companies We Reviewed

    We researched and reviewed 42 companies to find the best bad credit loan companies listed above. While we write individual reviews for most companies, we do not always write reviews for companies we would not recommend. Below are the companies we researched along with links to individual company reviews to help you learn more before making a decision:

    American Express, Avant, Axos, Bankers Healthcare Group, Best Egg, Boeing Employees' Credit Union (BECU), Citibank, Discover, Fig Loans, Happy Money, Laurel Road, LendingClub, LendingUSA, LightStream, Marcus, Mariner, Money Key, Navy Federal Credit Union, Netcredit, OneMain Financial, OppLoans, PenFed Credit Union, PNC (BBVA), Prosper, Reach Financial, Regions, Rocket Loans, Santander Bank, SeedFi, SoFi, Truist, U.S. Bank, United Services Automobile Association (USAA), Universal Credit, Wells Fargo


To evaluate and rank personal loan providers we collected hundreds of data points across 70 lenders, including traditional banks, credit unions, fintechs, and special interest finance companies. We researched and evaluated APRs, loan amounts and terms, fees, customer experience, and much more. To rank the lenders in our database and to generate star ratings, we weighted the data we collected, based in part on what consumers told us were the most important features of a personal loan and lender in a survey we conducted. We grouped those factors into four broad areas:

  • Loan costs (advertised APR, fees, and six other factors): 29.25%
  • Loan terms (loan amount, repayment term, and three other factors): 22.25%
  • Borrowing requirements (credit score, membership requirement, and six other factors): 28.5%
  • Additional features (online application, pre-qualification, and eight other factors): 20%

Investopedia launched in 1999 and has been helping readers find the best bad credit loan companies since 2019. Learn more about how we evaluated personal loans in our complete methodology.

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Updated by
Dawn Papandrea
A photo shows personal finance writer Dawn Papandrea.
Dawn Papandrea is a credit card expert with 10+ years of experience covering credit cards, banking, personal finance and careers. Her reviews of credit cards and other financial products appear on The Balance, Investopedia, and on personal finance sites elsewhere. Dawn earned her master's in journalism and mass communication from New York University and has a bachelor's in English from St. John's University.
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Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
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