Getting a Bad Credit Loan
Even with bad credit, getting a personal loan is still possible, without using payday loans.
Personal loans can be a lifesaver when you have an unexpected bill or emergency come up and you don’t have the savings to cover it. But if you have no credit history or a low credit score, getting approved for a credit card or personal loan can be a challenge.
Fortunately, there are loans for poor credit available. In most cases, you can apply online and get approved in a matter of minutes.
5 best bad credit loans of May 2020
- OneMain Financial: Best for emergencies
- Upgrade: Best for building credit
- Avant: Best for high loan limits
- OppLoans: Best alternative to payday loans
- Rise Credit: Best for low amounts
OneMain Financial – Best for emergencies
OneMain Financial’s personal loans can put the funds in your bank account on the same day. You can complete the process from start to finish at any time online. Once you submit your application, you’ll receive an answer in 10 minutes or less.
Once you’re approved, you can request same-day funding (during weekdays) to receive a check, which you can pick up at a OneMain Financial branch. Or you can provide your bank details to request an electronic payment, which takes one to two business days to receive. To request an electronic payment, you’ll need to provide your bank account and routing numbers.
Besides the speed of the application, approval and funding process, OneMain Financial has no minimum credit score requirement — your chances of getting approved for funding are high, regardless of past mistakes you may have made that have negatively affected your credit score.
Upgrade – Best for building credit
Having no credit history can be just as bad as having poor credit. The credit bureaus review your payment history and the length of your open credit cards and other accounts to determine your creditworthiness.
But how can you build credit if traditional lenders and credit card providers don’t give you a chance? Upgrade is the best provider of loans for poor credit or for applicants who have little credit history because the loan provider is willing to approve applicants with a credit score as low as 600 with a loan — and will help you in your credit building process. Furthermore, Upgrade has a credit health mobile application to help borrowers monitor their credit scores and track their credit-building progress.
Avant – Best for high loan limits
There are times when you need to borrow more than a couple of thousand dollars. Perhaps you’re trying to consolidate several debts such as credit cards or personal loans into one payment to simplify your life. Or you want to purchase a car and prefer to finance the purchase. Or you may need money to pay for an expensive medical procedure or need to make some pricey but essential home repairs. Avant is the best choice because the lender provides up to $35,000 in loans at reasonable rates of 35.99% — on par with many bad credit loan providers.
OppLoans – Best alternative to payday loans
Keep OppLoans on your shortlist of providers of loans for bad credit. When you’ve exhausted all your options and you have nowhere else to turn besides a payday loan, OppLoans is bound to approve you, regardless of your credit score. The loan isn’t the cheapest, but if you’re in a real emergency, OppLoans is likely to provide you with better terms than payday loan providers.
OppLoans will only provide you with a shorter-term loan, but the interest rate is high, so you’ll want to pay down your loan as quickly as possible. There’s no need to be embarrassed or worried about your credit history when you’re applying for a loan — OppLoans doesn’t run your credit score.
You’ll need to prove you have steady employment instead by providing your last few paystubs. If you can’t borrow from friends or family and other lenders have denied you, check with OppLoans, as long as you’re able to pay the loan back quickly to save you on high interest charges.
RISE Credit – Best for low amounts
RISE Credit is a good option when you need some emergency cash fast — as long as you only need to borrow a small amount of money. It’s the most expensive borrowing option before heading to a payday lender, as the interest rates can go up to 295%.
Your chances of qualifying for a small loan are high due to how Rise qualifies its customer’s creditworthiness. The loan provider has its own system that examines income, bank account information and credit history to assign customers with a RISE credit score and decide how much the provider is willing to lend.
Once you’re approved, you can choose an amount and the length you’ll need to pay back the loan. Once you’re all set, you’ll receive your funds as soon as the next business day.
Compare the 5 best bad credit loans of May 2020
|Lender||Loan Amount||APR||Terms||Key Benefit|
|OneMain Financial||$1,500 – $20,000||18% – 35.99%||24 – 60 months||Decision in 10 minutes|
|Upgrade||$1,000 – $35,000||7.99% – 35.79%||36 – 60 months||Improve credit as you repay|
|Avant||$2,000 – $35,000||9.95% – 35.99%||24 – 60 months||Consolidate large debt|
|OppLoans||$500 – $4,000||99% – 199%||Up to 36 months||High chance of approval|
|Rise Credit||$500 – $5,000||60% – 295%||7 – 26 months||Best for low amounts|
Can I get a loan with bad credit?
You can get a loan with bad credit from lenders willing to work with you. If you have bad credit, some lenders look at other factors to make a decision on whether they’re willing to lend to you. You’ll probably need to show your income and banking history in place of your poor credit history to qualify. Keep in mind that the cost of a loan is usually related to how much risk you may be to the lender. Bad credit loans are often more expensive than a regular loan, so make sure you’re able to pay off the loan as quickly as possible to avoid getting into further financial trouble.
How do you know if you fall in the bad credit range?
Experian is one of the major credit reporting agencies. Like the other credit agencies, they use a credit scale to classify consumers. Refer to Experian’s credit score range to know where you stand:
|Excellent||800 – 850|
|Very Good||740 – 799|
|Good||670 – 739|
|Fair||580 – 669|
|Poor||300 – 579|
How to improve your credit to get a better loan?
The higher your credit score, the better terms you may receive for your loan. Don’t be discouraged if you fall into the poor or fair credit score category — there are some steps you could take to improve and build your credit:
Step 1: Dispute inaccuracies
Order your free credit report and check it for errors. Mistakes happen — if you find a company has reported you for late payments or for a loan you never applied for, you can dispute the hit on your credit file. The credit bureau will investigate the error and remove it if it doesn’t belong to you.
Step 2: Keep paying your bills on time
Make sure you’re paying your bills on time to ensure you don’t get reported to the credit bureaus. If you’re having trouble making your payments on time, contact your creditors to ask for an extension or a reduction on the payment due so you can continue making your payments on time.
Step 3: Lower your credit utilization ratio
If you have any credit cards, make sure that you keep the month-to-month balance lower than 30% of your total credit line. Credit reporting bureaus tend to reward accounts that keep a credit utilization ratio below this 30% threshold. For example, if you have a credit card with a $10,000 limit, don’t spend over $3,000 on that card or allow the month-to-month balance to exceed that.
Reasons to take out a loan while having bad credit
Even people with bad credit need to take out a loan sometimes. Here are some reasons you may need loans for poor credit:
- Debt consolidation
- Home Improvement
- Moving Expenses
- Buying a car