Best Personal Loan Providers for Bad Credit

See out top picks of financing solutions for loan seekers with credit scores below 580. 

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Getting a Personal Loan with Bad Credit: Understand Your Needs

Do you have bad credit and still need to take out a personal loan? Good news: It's possible. If you are considering applying for a loan despite your bad credit, there is some much needed due diligence to be done. First, you need to ask yourself: Why do I need this loan? Is it for a purchase you've had your eye on but you can still put off for a while? Or is it something you need to purchase right now? If you can put off your purchase for some time, you may want to consider it as adding a loan to your existing bad credit may put you into an even greater hole of debt with bad credit. If the loan you need is immediate, you should check out your options of best personal loans.

Discover the Options: Taking a Loan Despite Your Bad Credit

If you need to take out a personal loan as soon as possible, overriding your current bad credit, there are different lending options available to you:

  • Credit unions. These are member-owned nonprofit organizations that generally offer lower fees than banks do

  • Home equity loans. These take out a line of credit on your home and can put you in a tough situation if down the line you are unable to pay it back

  • Peer to peer lending. There are peer lender websites that will let you post your need for a loan. Independent investors will then decide whether or not to lend you money after weighing the impact of your bad credit. 

  • Co-signers. This is someone who will sign on a loan with you as a show of trust, promising to take responsibility in the event you can’t repay the amount. 

  • Bad credit loans. These loans exist for people with a bad credit score,. Keep in mind that they come with high percentage rates and big penalties for late payments. 

If none of these options are viable for you, remember that you can always go to your bank for a loan. Just be aware that most major credit lenders and institutions are hesitant to lend out money when you have bad credit. Choosing an alternative route may prove to be more successful in the end. 

Check Lender Reputation

Not all companies that offer personal loans, especially loans for people with bad credit, are trustworthy. When seeking a personal loan, make sure you're not borrowing from a lender that is going to deliberately set high rates, squeezing more than necessary out of you - financially.  Chances are, if a deal seems too good for someone with bad credit, it probably is and should be avoided. If you're looking for a reputable lenders, check out these reviews of the top personal loan companies.

Doing due diligence to compare lenders for bad credit before taking out a personal loan is critically important in order to find the lender that fits you best. Important information to keep in mind is the APR %, the maximum loan amount available, the loan term length, as well as the minimum credit score required. 

Be Prepared and Persistent 

Once you've decided where you are getting your personal loan, find out what documentation they require in order to come prepared to your application process. You may need to present tax forms, employment information, and bank statements, along with the loan application or application letter. Regardless of your preparation, there's a good chance you will need to appeal to multiple institutions before receiving the money you need. Especially if you have bad credit. If your application is rejected, find out why so you can make the necessary changes - ones that are in your control- in order to increase your chances of approval elsewhere. 

APR Rates

Representative example: assuming a loan of $10,000 over 60 months at a fixed rate of 3.1% per annum and fees of $60.00. This would result in a representative rate of 3.3% APR, with monthly repayments of $180.80, for a total amount paid of $10,848.00.

APR Disclosure:

*Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. 

Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66.

Same-Day Funding Disclosure:

You can fund your loan today if today is a banking business day, your application is approved, and you complete the following steps by 2:30 p.m. Eastern time: (1) review and electronically sign your loan agreement; (2) provide us with your funding preferences and relevant banking information; and (3) complete the final verification process.

Know the Terms of Your Personal Loan

Don’t sign any loan agreement before understanding the terms of payback - especially if you already have bad credit. Some of the loans for those with bad credit that you find online may require you to put up something of value as collateral. Keep in mind that your valuable may be lost if you fail to repay the loan. You also need to understand just how much interest you'll be required to pay along the way and what the penalties are for missing payments.  Make sure you can afford it. 

After securing a personal loan, make your loan payments on time and in full in order to help rebuild your bad credit and create a positive reputation that lenders will remember and trust.