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A personal loan is a great way to finance emergency expenses or pay down debt. If you have a bad credit score, it’s important to shop around for the best rates and terms.
Many lenders consider factors beyond your credit score, such as income and employment. Some even offer secured loans and buy now, pay later options.
1. Upstart
Upstart is one of the most cutting-edge personal loan lenders for bad credit, relying on AI to underwrite borrowers and look beyond their credit scores. Its lack of a minimum credit score requirement, plus its emphasis on factors like education and career background, makes it an option for borrowers who may not qualify for loans from traditional lenders.
Borrowers can prequalify for a Upstart personal loan by filling out an online application and providing basic information such as their name, birth date, address and income. Upstart will then perform a soft credit inquiry that won’t affect their score to see if they’re eligible for an offer. If they are, they’ll receive offers showing their loan amounts, rates and repayment terms.
Upstart customers give the lender high marks for its simple application process, the speed at which they received funds and the transparency of its loan terms. However, negative reviews focus on problems with the loan, such as high interest rates, billing errors and difficulty with verifying income and employment.
2. OneMain Financial
OneMain Financial stands out for offering unsecured personal loans to borrowers with bad credit, though it also has higher interest rates than some competitors. The lender doesn’t disclose its exact credit score requirements, but third-party sources tend to indicate that you can qualify with a score around 600. If your score is too low to qualify for a personal loan from OneMain, you might consider alternatives such as family loans, payment plans with medical and utility providers, local financial assistance programs or cash advance apps.
OneMain says it can r1000 payday loans conditionally approve a loan application in as little as an hour, and it typically takes a day or two to fund loans online. Unlike some lenders, it doesn’t charge late fees or a penalty if you pay off your loan early. You can also choose a repayment date when you sign your loan agreement, which might help you avoid overspending if your income decreases or your payday shifts.
In addition to unsecured personal loans, OneMain offers secured personal loans and allows you to add a co-applicant to improve your chances of qualifying. Secured loans require you to offer up an asset such as a car to guarantee your repayment, but they typically come with lower rates than unsecured personal loans. You can check your rate on the OneMain website by completing a pre-qualification form that has no impact on your credit score.
3. Oportun
Oportun offers unsecured personal loans to borrowers with bad credit. It doesn’t require a credit score to approve a loan application and doesn’t report payment history to nationwide credit bureaus. However, it does verify a borrower’s income before disbursing funds. Its customer service received 4.8 stars out of 5 on Trustpilot, an online consumer review site.
To check if you qualify for an Oportun personal loan, you can fill out an online prequalification form that takes about 10 minutes to complete. This process involves a soft credit pull, which won’t affect your credit score. If you decide to proceed with a full application, you’ll need to provide Oportun with documentation like W-2s, paystubs and bank account details. You may also need to provide a cosigner to increase your chances of approval.
Oportun borrowers can choose from secured and unsecured personal loans, with the latter typically available to returning customers who’ve established a solid repayment record. Borrowers who select a secured loan can use their vehicle’s title to improve their chances of qualifying or obtaining a lower rate. If you opt for a secured Oportun personal loan, your funds will be held in an Oportun savings account that is FDIC insured at Wells Fargo Bank and other FDIC insured financial depository institutions. Oportun borrowers also get free access to a money saving app called Set and Save.
4. Happy Money
Happy Money aims to make personal loans accessible, easy and transparent for borrowers with bad credit. You can prequalify for a Payoff loan on the company’s website in two minutes, without impacting your credit score. This will give you a good idea of what your potential rates, loan amounts and terms may look like. You can also fill out a full application on the website to see more detailed information, though this will result in a hard credit pull and could potentially lower your score.
A pro to Happy Money is that it doesn’t charge any origination fees, application fees or late payment fees. It also doesn’t charge prepayment penalties or credit check fees, a nice perk for people who want to get out of their debt faster than anticipated. But a con is that Happy Money personal loans are only intended for debt consolidation. This means that it isn’t the best lender for things like home improvement projects, wedding expenses or other unrelated purchases.
Another important note is that it’s critical to never run up balances on your credit cards after you take out a debt consolidation loan from Happy Money. If you do, your credit score will likely suffer, which defeats the purpose of a debt consolidation loan. So, be sure to zero out your credit card balances before you get a new loan.