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When shopping for personal loans, borrowers with bad credit should consider the minimum credit score required and the lender’s fees. Borrowers also need to be sure they have enough consistent income to make the loan payments.
It’s important to prequalify for a personal loan before applying, as this can help determine the best lenders. These lenders have low credit requirements, manageable interest rates and offer competitive terms.
1. Credit Karma
If you have bad credit, obtaining a personal loan can feel like a daunting task. However, viable options do exist, and it’s important to shop around and compare offers. Look for lenders who offer loans to people with bad credit, and read online reviews of these providers to get a sense of their customer service and business practices. Also, pay attention to the loan fees, including origination fees and prepayment penalties, as these can significantly increase the actual cost of a personal loan.
To a lender, borrowers with bad credit represent a higher credit risk than those with fair or good credit scores. To offset this risk, they may charge higher interest rates and fees than those offered to borrowers with good credit. It’s also important to consider the minimum and maximum credit score requirements of a potential lender. Lenders that only lend to borrowers with bad credit usually have lower minimum and maximum credit scores, while those who work with all types of credit scores tend to have stricter minimum and maximum credit requirements.
2. GoBankingRates
Searching the internet is a great way to find personal loan offers, but some online lenders may require you to share your information to receive personalized loan offers. You should shop around for loans with a variety of lenders before you apply, and make sure to compare interest rates and fees.
Qualification requirements vary by lender. Some lenders have a minimum credit score and others may also limit the amount you can borrow based on your debt-to-income ratio. In addition, some lenders may consider only stable income from salaried positions, and not variable income from self-employment or tips. Look for lenders who offer a variety of terms, and try out personal loan calculators to see how much the monthly payments will add up to.
Be aware that some lenders will charge origination fees, late payment fees and prepayment penalties. Look for finchoice personal loan application lenders who waive these charges to make it easier to pay back your debt on time and in full. Also, beware of predatory lenders who target people with bad credit scores. They often charge exorbitant fees and can ruin your credit even further.
3. Upstart
Upstart is one of the best personal loan lenders for bad credit. It’s an online lender that has helped millions of people access credit over the years. It offers competitive rates and terms, plus it has a lower minimum credit score than many other lenders.
You can prequalify for a personal loan from Upstart by answering a few questions. The prequalification will run a soft inquiry on your credit, meaning it won’t impact your score. You can then choose which potential loans you’d like to consider. Then, you’ll have to fill out a formal application with Upstart.
Like Avant, Upstart also charges an origination fee and requires a checking or savings account to process your payments. But it has more flexible repayment terms than some other lenders and can sometimes offer rate discounts for those who sign up for autopay. It also allows cosigners for its personal loans.
4. OneMain Financial
Unlike some other lenders that offer personal loans for bad credit, OneMain Financial doesn’t set specific minimum credit scores or maximum debt-to-income ratios when deciding whether to approve applicants. However, it pays extra attention to a borrower’s ability to repay the loan by reviewing past debt history and current income. It also lets borrowers secure their personal loans by providing their own collateral, which reduces the risk of default.
Interested borrowers can pre-qualify for a OneMain Financial personal loan in minutes using an online application that requires just a few basic questions and a soft credit check. If approved, the loan usually funds next day. Alternatively, borrowers can submit an official application with required documentation and a hard credit check.
OneMain Financial is a strong choice for those who need a personal loan for bad credit because of its fast funding timeline, low minimum loan amounts and lack of prepayment penalties. However, its higher rates and fees might make it more expensive than some other lenders on this list. It is also not available in all states.
5. SoFi
SoFi is a lender for personal loans for bad credit that offers some of the lowest rates available. The company also provides a range of member benefits, including financial planning services. SoFi’s loan applications are based largely on a person’s employment and income history, rather than their credit. However, SoFi requires a credit score of 680 or higher to qualify for its best rates.
Borrowers can check their potential rates by submitting a soft credit inquiry, which doesn’t affect their credit. They can also apply for a loan and receive funds on the same day they’re approved in some cases. SoFi’s loans cap at $100,000, which is higher than the industry average, making it a good option for larger debt-consolidation or purchase expenses.
The best personal loans for bad credit offer competitive interest rates and flexible terms to help borrowers pay off their debt quickly. They also typically have less strict requirements compared to traditional lenders. If you have fair or poor credit, consider applying with the top personal loan lenders for bad credit to boost your chances of approval.